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EXHIBIT 4.16
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TEAM COMMUNICATIONS GROUP, INC.
AND
NATIONAL SECURITIES CORPORATION
REPRESENTATIVE'S
WARRANT AGREEMENT
DATED AS OF _____ __, 1998
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REPRESENTATIVE'S WARRANT AGREEMENT dated as of _________, 1998,
between TEAM COMMUNICATIONS GROUP, a California corporation (the "Company"), and
NATIONAL SECURITIES CORPORATION and its assignees or designees (hereinafter
referred to variously as the "Holder" or "National").
W I T N E S S E T H :
WHEREAS, National has agreed pursuant to the underwriting
agreement (the "Underwriting Agreement") between the Company and National (the
"Representative"), to act as the representative of the several underwriters
listed therein (the "Underwriters") in connection with the Company's proposed
public offering of 1,500,000 shares of common stock of the Company, no par
value, (the "Common Stock"), at a public offering price of $_____ per share (the
"Public Offering").
WHEREAS, pursuant to the Underwriting Agreement, the Company
proposes to issue warrants to the Representative to purchase up to an aggregate
of 150,000 shares of Common Stock (the "Representative's Warrants").
WHEREAS, the Representative's Warrants to be issued pursuant to
this Agreement will be issued on the Closing Date (as such term is defined in
the Underwriting Agreement) by the Company to the Representative in
consideration for, and as part of the Underwriters' compensation in connection
with, the Representative acting as the representative pursuant to the
Underwriting Agreement.
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NOW, THEREFORE, in consideration of the premises, the payment by
the Representatives to the Company of an aggregate of Fifteen Dollars ($15.00),
the agreements herein set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Grant. National is hereby granted the right to purchase, at
any time from _____ __, 1999 (one year from the effective date of the
registration statement and any supplement thereto), on Form SB-2, No. 333-26307
(the "Effective Date") until 5:30 p.m., New York time, on _____ __, 2003 (five
years from the Effective Date), at which time the Representative's Warrants
expire, up to an aggregate of 150,000 shares of Common Stock (subject to
adjustment as provided in Section 8 hereof), at an initial exercise price
(subject to adjustment as provided in Section 11 hereof) of $___ per share (that
being 120% of the public offering price per share) (the "Exercise Price").
2. Representative's Warrant Certificates. The Representative's
Warrant certificates (the "Warrant Certificates") delivered and to be delivered
pursuant to this Agreement shall be in the form set forth in Exhibit A, attached
hereto and made a part hereof, with such appropriate insertions, omissions,
substitutions, and other variations as required or permitted by this Agreement.
3. Registration of Warrant. The Representative's Warrants shall
be numbered and shall be registered on the books of the Company when issued.
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4. Exercise of Representative's Warrants.
4.1 Method of Exercise. The Representative's Warrants
initially are exercisable at the Exercise Price (subject to adjustment as
provided in Section 11 hereof) per Representative's Warrant set forth in Section
8 hereof payable by certified or official bank check in New York Clearing House
funds. Upon surrender of a Warrant Certificate with the annexed Form of Election
to Purchase duly executed, together with payment of the Exercise Price for the
shares of Common Stock purchased at the Company's principal offices (presently
located at 12300 Wilshire Blvd., Los Angeles, California 90025) the registered
holder of a Warrant Certificate shall be entitled to receive a certificate or
certificates for the shares of Common Stock so purchased. The purchase rights
represented by each Warrant Certificate are exercisable at the option of the
Holder thereof, in whole or in part (but not as to fractional shares of Common
Stock underlying the Representative's Warrants). In the case of the purchase of
less than all of the shares of Common Stock purchasable under any Warrant
Certificate, the Company shall cancel said Warrant Certificate upon the
surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the balance of the shares of Common Stock purchasable thereunder.
4.2 Exercise by Surrender of Representative's Warrant. In
addition to the method of payment set forth in Section 4.1 and in lieu of any
cash payment required thereunder, the Holder(s) of the Representative's Warrants
shall have the right at any time and from time to time while the
Representative's Warrants are exercisable to exercise the Representative's
Warrants in full or in part by surrendering the Warrant Certificate in the
manner specified in Section 4.1 in exchange for the number of shares of Common
Stock equal to the product of (x)
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the number of shares of Common Stock as to which the Representative's Warrants
are being exercised, multiplied by (y) a fraction, the numerator of which is the
Market Price (as defined in Section 9.3 (d) hereof) of the shares of Common
Stock minus the Exercise Price of the shares of Common Stock and the denominator
of which is the Exercise Price of the shares of Common Stock. Solely for the
purposes of this Section 4.2, Market Price shall be calculated either (i) on the
date on which the Form of Election to Purchase attached hereto is deemed to have
been sent to the Company pursuant to Section 15 hereof ("Notice Date") or (ii)
as the average of the Market Price for each of the five trading days immediately
preceding the Notice Date, whichever of (i) or (ii) results in a greater Market
Price.
5. Issuance of Certificates. Upon the exercise of any of the
Representative's Warrants, the issuance of certificates for shares of Common
Stock, properties or rights underlying such Representative's Warrant shall be
made forthwith (and in any event within five (5) business days thereafter)
without charge to the Holder thereof including, without limitation, any tax,
other than income taxes, which may be payable in respect of the issuance
thereof, and such certificates shall (subject to the provisions of Sections 7
and 9 hereof) be issued in the name of, or in such names as may be directed by,
the Holder thereof; provided, however, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any such certificates in a name other than that of the
Holder and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount
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of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
The Warrant Certificates and the certificates representing the
shares of Common Stock or other securities, property or rights issued upon
exercise of the Representative's Warrants shall be executed on behalf of the
Company by the manual or facsimile signature of the then present President or
any Vice President of the Company under its corporate seal reproduced thereon,
attested to by the manual or facsimile signature of the then present Secretary
or any Assistant Secretary of the Company. Warrant Certificates shall be dated
the date of execution by the Company upon initial issuance, division, exchange,
substitution or transfer.
6. Transfer of Representative's Warrants. The Representative's
Warrants shall be transferable only on the books of the Company maintained at
its principal office, where its principal office may then be located, upon
delivery thereof duly endorsed by any Holder or by its duly authorized attorney
or representative accompanied by proper evidence of succession, assignment or
authority to transfer. Upon any registration of transfer, the Company shall
execute and deliver the new Warrant Certificate to the person entitled thereto.
7. Restriction On Transfer of Representative's Warrants. The
Holder of a Warrant Certificate, by its acceptance thereof, covenants and agrees
that the Representative's Warrants represented thereby are being acquired as an
investment and not with a view to the distribution thereof, and that such
Representative's Warrants may not be sold, transferred, assigned, hypothecated
or otherwise disposed of, in whole or in part, for a period of one year
following the Effective Date, except that during such one year period the
Representative's
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Warrants may be transferred to officers or partners of members of the National
Association of Securities Dealers, Inc. who participate in the Public Offering,
including the Underwriters and any selected dealers, or by operation of law.
8. Exercise Price and Number of Securities. Except as otherwise
provided in Section 10 hereof, each Representative's Warrant is exercisable to
purchase one share of Common Stock at an initial exercise price equal to the
Exercise Price. The Exercise Price and the number of shares of Common Stock for
which each Representative's Warrant may be exercised shall be the price and the
number of shares of Common Stock which shall result from time to time from any
and all adjustments in accordance with the provisions of Section 11 hereof.
9. Registration Rights.
9.1 Registration Under the Securities Act of 1933. Each
Warrant Certificate and each certificate representing shares of Common Stock and
any of the other securities issuable upon exercise of the Representative's
Warrants (collectively, the "Warrant Shares") shall bear the following legend
unless (i) such Representative's Warrants or Warrant Shares are distributed to
the public or sold to underwriters for distribution to the public pursuant to
this Section 9 hereof or otherwise pursuant to a registration statement filed
under the Securities Act of 1933, as amended (the "Act"), or (ii) the Company
has received an opinion of counsel, in form and substance reasonably
satisfactory to counsel for the Company, that such legend is unnecessary for any
such certificate:
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THE REPRESENTATIVE'S WARRANTS REPRESENTED BY THIS
CERTIFICATE AND THE OTHER SECURITIES ISSUABLE UPON
EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO (I) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, (II)
TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT
(OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO
THE DISPOSITION OF SECURITIES), OR (III) AN
OPINION OF COUNSEL, IF SUCH OPINION SHALL BE
REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER,
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT
IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE REPRESENTATIVE'S
WARRANTS REPRESENTED BY THE CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE REPRESENTATIVE'S
WARRANT AGREEMENT REFERRED TO HEREIN.
9.2 Piggyback Registration. If, at any time commencing after
the Effective Date of the Registration Statement and expiring seven (7) years
after the Effective Date, the Company proposes to register any of its securities
under the Act (other than on Form S-8, S-4 or a successor form thereto) it will
give written notice by registered mail, at least thirty (30) days prior to the
filing of each such registration statement, to the Holders of the
Representative's Warrants and/or Warrant Shares of its intention to do so. If
any of the Holders of the Representative's Warrants and/or Warrant Shares notify
the Company within twenty (20) days after mailing of any such notice of its or
their desire to include any such securities in such proposed registration
statement, the Company shall afford such Holders the opportunity to have any
Warrant Shares registered under such registration statement. In the event that
the managing underwriter for said offering advises the Company in writing that
in its opinion the number of securities requested to be included in such
registration exceeds the number which can be sold
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in such offering without causing a diminution in the offering price or otherwise
adversely affecting the offering, the Company will include in such registration
(a) first, the securities the Company proposes to sell, (b) second, the
securities held by the entities that made the demand for registration, (c)
third, the Warrant Shares requested to be included in such registration which in
the opinion of such underwriter can be sold, pro rata among the Holders of
Warrant Shares on the basis of the number of Warrant Shares requested to be
registered by such Holders, and (d) fourth, other securities requested to be
included in such registration.
Notwithstanding the provisions of this Section 9.2, the Company
shall have the right at any time after it shall have given written notice
pursuant to this Section 9.2 (irrespective of whether a written request for
inclusion of any such securities shall have been made) to elect not to file any
such proposed registration statement or to withdraw the same after the filing
but prior to the effective date thereof.
9.3 Demand Registration.
(a) At any time commencing one (1) year after the
Effective Date of the Registration Statement and expiring five (5) years from
the Effective Date, the Holders of the Representative's Warrants and/or Warrant
Shares representing a "Majority" (as hereinafter defined) of the
Representative's Warrants and/or Warrant Shares shall have the right (which
right is in addition to the registration rights under Section 9.2 hereof),
exercisable by written notice to the Company, to have the Company prepare and
file with the Securities and Exchange Commission (the "Commission"), on one
occasion, a registration statement and such other documents, including a
prospectus, as may be necessary in the opinion of both counsel for the
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Company and counsel for the Holders, in order to comply with the provisions of
the Act, so as to permit a public offering and sale by such Holders and any
other Holders of the Representative's Warrants and/or Warrant Shares who notify
the Company within fifteen (15) days after the Company mails notice of such
request pursuant to Section 9.3(b) hereof (collectively, the "Requesting
Holders") of their respective Warrant Shares for the earlier of (i) nine (9)
consecutive months or (ii) until the sale of all of the Warrant Shares requested
to be registered by the Requesting Holders.
(b) The Company covenants and agrees to give written
notice of any registration request under this Section 9.3 by any Holder or
Holders representing a Majority of the Representative's Warrants and/or Warrant
Shares to all other registered Holders of the Representative's Warrants and the
Warrant Shares within ten (10) days from the date of the receipt of any such
registration request.
(c) In addition to the registration rights under
Section 9.2 and subsection (a) of this Section 9.3, at any time commencing one
(1) year after the Effective Date of the Registration Statement and expiring
five (5) years from the Effective Date, the Holders of a Majority of the
Representative's Warrants and/or Warrant Shares shall have the right on one
occasion, exercisable by written request to the Company, to have the Company
prepare and file with the Commission a registration statement so as to permit a
public offering and sale by such Holders of their respective Warrant Shares for
the earlier of (i) nine (9) consecutive months or (ii) until the sale of all of
the Warrant Shares requested to be registered by such Holders; provided,
however, that the provisions of Section 9.4(b) hereof shall not apply to any
such
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registration request and registration and all costs incident thereto shall be at
the expense of the Holder or Holders making such request. If the Holders have
exercised their rights under Section 9.3(a) then the Holders may not exercise
their rights under Section 9.3(c) for a period of nine (9) months following the
effective date of any registration statement filed pursuant to Section 9.3(a).
(d) Definition of Market Price. As used herein, the
phrase "Market Price" at any date shall be deemed to be the last reported sale
price, or, in case no such reported sale takes place on such day, the average of
the last reported sale prices for the last three (3) trading days, in either
case as officially reported by the principal securities exchange on which the
Common Stock is listed or admitted to trading, or, if the Common Stock is not
listed or admitted to trading on any national securities exchange, the average
closing sale price as furnished by the Nasdaq Stock Market ("Nasdaq") (or
similar organization if Nasdaq is no longer reporting such information), or if
the Common Stock is not quoted on Nasdaq or an exchange, the average of the high
and low bid prices on the NASD Over the Counter Electronic Bulletin Board System
("OTC"), or if not traded on the OTC, as determined in good faith by resolution
of the Board of Directors of the Company, based on the best information
available to it.
9.4 Covenants of the Company With Respect to Registration.
In connection with any registration under Sections 9.2 or 9.3 hereof, the
Company covenants and agrees as follows:
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(a) The Company shall use its best efforts to file a
registration statement within forty-five (45) days of receipt of any demand
therefor, and to have any registration statements declared effective at the
earliest possible time, and shall furnish each Holder desiring to sell Warrant
Shares such number of prospectuses as shall reasonably be requested.
(b) The Company shall pay all costs, fees and expenses
in connection with all registration statements filed pursuant to Sections 9.2
and 9.3(a) hereof including, without limitation, the Company's legal and
accounting fees, printing expenses, blue sky fees and expenses (excluding fees
and expenses of Holder(s)' counsel and any underwriting or selling commissions,
and excluding roadshow expenses if the only shares to be registered in such
Registration Statement are Warrant Shares). The Holder(s) will pay all costs,
fees and expenses (including those of the Company) in connection with the
registration statement filed pursuant to Section 9.3(c).
(c) The Company will take all necessary action which
may be required in qualifying or registering the Warrant Shares included in a
registration statement for offering and sale under the securities or blue sky
laws of such states as are reasonably requested by the Holder(s), provided that
the Company shall not be obligated to execute or file any general consent to
service of process or to qualify as a foreign corporation to do business under
the laws of any such jurisdiction.
(d) The Company shall indemnify the Holder(s) of the
Warrant Shares to be sold pursuant to any registration statement and each
person, if any, who controls such
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Holders within the meaning of Section 15 of the Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), against all loss,
claim, damage, expense or liability (including all expenses reasonably incurred
in investigating, preparing or defending against any claim whatsoever) to which
any of them may become subject under the Act, the Exchange Act or otherwise,
arising from such registration statement to the same extent and with the same
effect as the provisions pursuant to which the Company has agreed to indemnify
each of the Underwriters contained in Section 7 of the Underwriting Agreement.
(e) The Holder(s) of the Representative's Warrants to
be sold pursuant to a registration statement, and their successors and assigns,
shall, severally and not jointly, indemnify the Company, its officers and
directors and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, against all loss,
claim, damage or expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any claim whatsoever)
to which they may become subject under the Act, the Exchange Act or otherwise,
arising from information furnished by or on behalf of such Holders, or their
successors or assigns, for specific inclusion in such registration statement to
the same extent and with the same effect as the provisions contained in Section
7 of the Underwriting Agreement pursuant to which the Underwriters have agreed
to indemnify the Company.
(f) Nothing contained in this Agreement shall be
construed as requiring the Holder(s) to exercise their Representative's Warrants
prior to the initial filing of any registration statement or the effectiveness
thereof.
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(g) The Company shall not permit the inclusion of any
securities other than the Warrant Shares to be included in any registration
statement filed pursuant to Section 9.3 hereof, or permit any other registration
statement to be or remain effective during the effectiveness of a registration
statement filed pursuant to Section 9.3 hereof (other than registration
statements filed prior to an exercise of registration rights by a Holder of
Representatives Warrants and/or Warrant Shares pursuant to Section 9.3 hereof),
without the prior written consent of National or as otherwise required by the
terms of any existing registration rights granted prior to the date of this
Agreement by the Company to the holders of any of the Company's securities.
(h) The Company shall furnish to each Holder
participating in the offering and to each underwriter, if any, a signed
counterpart, addressed to such Holder or underwriter, of (i) an opinion of
counsel to the Company, dated the effective date of such registration statement
(and, if such registration includes an underwritten public offering, an opinion
dated the date of the closing under the underwriting agreement), and (ii) a
"cold comfort" letter dated the effective date of such registration statement
(and, if such registration includes an underwritten public offering, a letter
dated the date of the closing under the underwriting agreement) signed by the
independent public accountants who have issued a report on the Company's
financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of
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issuer's counsel and in accountants' letters delivered to underwriters in
underwritten public offerings of securities.
(i) The Company shall as soon as practicable after the
effective date of the registration statement, and in any event within 15 months
thereafter, make "generally available to its security holders" (within the
meaning of Rule 158 under the Act) an earnings statement (which need not be
audited) complying with Section 11(a) of the Act and covering a period of at
least 12 consecutive months beginning after the effective date of the
registration statement.
(j) The Company shall enter into an underwriting
agreement with the managing underwriters (in the case of registration rights
exercised pursuant to Section 9.3 hereof, selected for such underwriting by
Holders holding a Majority of the Warrant Shares requested to be included in
such underwriting, which may be the Representative). Such agreement shall be
satisfactory in form and substance to the Company, each Holder and such managing
underwriters, and shall contain such representations, warranties and covenants
by the Company and such other terms as are customarily contained in agreements
of that type used by the managing underwriter. The Holders shall be parties to
any underwriting agreement relating to an underwritten sale of their Warrant
Shares and may, at their option, require that any or all the representations,
warranties and covenants of the Company to or for the benefit of such
underwriters shall also be made to and for the benefit of such Holders. Such
Holders shall not be required to make any representations or warranties to or
agreements with the Company or
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the underwriters except as they may relate to such Holders and their intended
methods of distribution.
(k) For purposes of this Agreement, the term
"Majority" in reference to the Representative's Warrants or Warrant Shares shall
mean in excess of fifty percent (50%) of the then outstanding Representative's
Warrants or Warrant Shares, as the case may be, that (i) are not held by the
Company, an affiliate, officer, creditor, employee or agent thereof or any of
their respective affiliates, members of their family, persons acting as nominees
or in conjunction therewith or (ii) have not been resold to the public pursuant
to a registration statement filed with the Commission under the Act.
10. Obligations of Holders. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to Section 9 hereof
that each of the selling Holders shall:
(a) Furnish to the Company such information regarding
themselves, the Warrant Shares held by them, the intended method of sale or
other disposition of such securities, the identity of and compensation to be
paid to any underwriters proposed to be employed in connection with such sale or
other disposition, and such other information as may reasonably be required to
effect the registration of their Warrant Shares.
(b) Notify the Company, at any time when a prospectus
relating to the Warrant Shares covered by a registration statement is required
to be delivered under the Act, of the happening of any event with respect to
such selling Holder as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement
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of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing.
11. Adjustments to Exercise Price and Number of Securities. The
Exercise Price in effect at any time and the number and kind of securities
purchased upon the exercise of the Representative's Warrants shall be subject to
adjustment from time to time only upon the happening of the following events:
11.1 Stock Dividend, Subdivision and Combination. In case
the Company shall (i) declare a dividend or make a distribution on its
outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or
reclassify its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify its outstanding shares of Common Stock
into a smaller number of shares, the Exercise Price in effect at the time of the
record date for such dividend or distribution or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that it shall
equal the price determined by multiplying the Exercise Price by a fraction, the
denominator of which shall be the number of shares of Common Stock outstanding
after giving effect to such action, and the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such action.
Such adjustment shall be made successively whenever any event listed above shall
occur.
11.2 Adjustment in Number of Securities. Upon each
adjustment of the Exercise Price pursuant to the provisions of this Section 11,
the number of Warrant Shares issuable upon the exercise at the adjusted Exercise
Price of each Representative's Warrant shall be adjusted to the nearest number
of whole shares of Common Stock by multiplying a number
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equal to the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares issuable upon exercise of the Representative's
Warrant immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.
11.3 Definition of Common Stock. For the purpose of this
Agreement, the term "Common Stock" shall mean (i) the class of stock designated
as Common Stock in the Certificate of Incorporation of the Company as amended as
of the date hereof, or (ii) any other class of stock resulting from successive
changes or reclassifications of such Common Stock consisting solely of changes
in par value, or from par value to no par value, or from no par value to par
value.
11.4 Merger or Consolidation. In case of any consolidation
of the Company with, or merger of the Company into, another corporation (other
than a consolidation or merger which does not result in any reclassification or
change of the outstanding Common Stock), the corporation formed by such
consolidation or merger shall execute and deliver to the Holders of all
Representative's Warrants then outstanding a supplemental warrant agreement
providing that each of such Holders shall have the right thereafter (until the
expiration of such Representative's Warrants) to receive, upon exercise of such
Representative's Warrants, the kind and amount of shares of stock and other
securities and property receivable upon such consolidation or merger by a holder
of the number of shares of Common Stock for which such Representative's Warrants
might have been exercised immediately prior to such consolidation, merger, sale
or transfer. Such supplemental warrant agreement shall provide for adjustments
which shall be identical to
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the adjustments provided in Section 11. The above provision of this subsection
shall similarly apply to successive consolidations or mergers.
11.5 No Adjustment of Exercise Price in Certain Cases. No
adjustment of the Exercise Price shall be made if the amount of said adjustment
shall be less than two cents ($.02) per share, provided, however, that in such
case any adjustment that would otherwise be required then to be made shall be
carried forward and shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustment so carried forward,
shall amount to at least two cents ($.02) per Representative's Warrant.
12. Exchange and Replacement of Warrant Certificates. Each
Warrant Certificate is exchangeable, without expense, upon the surrender thereof
by the registered Holder at the principal executive office of the Company for a
new Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Warrant Shares in such denominations as
shall be designated by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of any Warrant Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrant
Certificate, if mutilated, the Company will make and deliver a new Warrant
Certificate of like tenor, in lieu thereof.
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13. Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
upon the exercise of the Representative's Warrants, nor shall it be required to
issue scrip or pay cash in lieu of fractional interests, it being the intent of
the parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of shares of Common Stock or other
securities, properties or rights.
14. Reservation and Listing of Securities. The Company shall at
all times reserve and keep available out of its authorized shares of Common
Stock, solely for the purpose of issuance upon the exercise of the
Representative's Warrants, such number of shares of Common Stock or other
securities, properties or rights as shall be issuable upon the exercise thereof.
Every transfer agent ("Transfer Agent") for the Common Stock and other
securities of the Company issuable upon the exercise of the Representative's
Warrants will be irrevocably authorized and directed at all times to reserve
such number of authorized shares of Common Stock and other securities as shall
be requisite for such purpose. The Company will keep a copy of this Agreement on
file with every Transfer Agent for the Common Stock and other securities of the
Company issuable upon the exercise of the Representative's Warrants. The Company
will supply every such Transfer Agent with duly executed stock and other
certificates, as appropriate, for such purpose. The Company covenants and agrees
that, upon exercise of the Representative's Warrants and payment of the Exercise
Price therefor, all shares of Common Stock and other securities issuable upon
such exercise shall be duly and validly issued, fully paid, non-assessable and
not subject to the preemptive rights of any stockholder. As long as the
Representative's Warrants shall be outstanding, the Company shall use its best
efforts to cause
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all shares of Common Stock issuable upon the exercise of the Representative's
Warrants to be listed (subject to official notice of issuance) on all securities
exchanges on which the Common Stock issued to the public in connection herewith
may then be listed and/or quoted.
15. Notices to Holders of Representative's Warrants. Nothing
contained in this Agreement shall be construed as conferring upon the Holders
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 Company. If,
however, at any time prior to the expiration of the Representative's Warrants
and their exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of
its shares of Common Stock for the purpose of entitling them to receive a
dividend or distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings, as
indicated by the accounting treatment of such dividend or distribution on the
books of the Company; or
(b) the Company shall offer to all the holders of its
Common Stock any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the Company, or
any option, right or warrant to subscribe therefor; or
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(c) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation or merger) or a sale of
all or substantially all of its property, assets and business as an entirety
shall be proposed;
then in any one or more of said events, the Company shall give written notice of
such event at least fifteen (15) days prior to the date fixed as a record date
or the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall specify
such record date or the date of closing the transfer books, as the case may be.
Failure to give such notice or any defect therein shall not affect the validity
of any action taken in connection with the declaration or payment of any such
dividend, or the issuance of any convertible or exchangeable securities, or
subscription rights, options or warrants, or any proposed dissolution,
liquidation, winding up or sale.
16. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly made and sent when delivered, or mailed by registered or certified mail,
return receipt requested:
(a) if to the registered Holders of the
Representative's Warrants, to the address of each such Holder as shown on the
books of the Company; or
(b) if to the Company, to the address set forth in
Section 4 hereof or to such other address as the Company may designate by notice
to the Holders.
23
17. Supplements; Amendments; Entire Agreement. This Agreement
(including the Underwriting Agreement to the extent portions thereof are
referred to herein) contains the entire understanding between the parties hereto
with respect to the subject matter hereof and may not be modified or amended
except by a writing duly signed by the party against whom enforcement of the
modification or amendment is sought. The Company and National may from time to
time supplement or amend this Agreement without the approval of any other
Holders of Warrant Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any provisions herein, or to make any other provisions in regard to matters
or questions arising hereunder which the Company and the Representative may deem
necessary or desirable and which the Company and the Representative deem shall
not adversely affect the interests of the Holders of Representative's Warrant
Certificates.
18. Successors. All of the covenants and provisions of this
Agreement shall be binding upon and inure to the benefit of the Company, the
Holders and their respective successors and assigns hereunder.
19. Survival of Representations and Warranties. All statements in
any schedule, exhibit or certificate or other instrument delivered by or on
behalf of the parties hereto, or in connection with the transactions
contemplated by this Agreement, shall be deemed to be representations and
warranties hereunder. Notwithstanding any investigations made by or on behalf of
the parties to this Agreement, all representations, warranties and agreements
made by the parties to this Agreement or pursuant hereto shall survive.
24
20. Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of New York and for all purposes shall be construed in accordance with the
laws of said State without giving effect to the rules of said State governing
the conflicts of laws.
21. Severability. If any provision of this Agreement shall be
held to be invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provision of this Agreement.
22. Captions. The caption headings of the Sections of this
Agreement are for convenience of reference only and are not intended, nor should
they be construed as, a part of this Agreement and shall be given no substantive
effect.
23. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company and the
Representative and any other registered Holder(s) of the Representative's
Warrants or Warrant Shares any legal or equitable right, remedy or claim under
this Agreement; and this Agreement shall be for the sole and exclusive benefit
of the Company and the Underwriters and any other Holder(s) of the
Representative's Warrants or Warrant Shares.
25
24. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
IN WITNESS OF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
ATTEST: TEAM COMMUNICATIONS GROUP, INC.
___________________________ By:_____________________________________
Name:
Title:
NATIONAL SECURITIES CORPORATION
By:_____________________________________
Name:
Title:
26
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THE REPRESENTATIVE'S WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER
SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR
RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN
OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL
FOR THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE REPRESENTATIVE'S WARRANTS
REPRESENTED BY THIS CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE
WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:30 P.M., NEW YORK TIME, ____ ___, 2003
Representative's Warrant No. 1
150,000 Shares of Common Stock
WARRANT CERTIFICATE
This Warrant Certificate certifies that National Securities
Corporation, or registered assigns, is the registered holder of Warrants to
purchase initially, at any time from ____ ___, 1998 until 5:30 p.m., New York
time on ____ ___, 2003 ("Expiration Date"), up to 150,000 shares of fully-paid
and non-assessable common stock, no par value ("Common Stock") of Team
Communications Group, Inc., a California corporation (the "Company") at the
initial exercise price, subject to adjustment in certain events, of $_____ per
share (the "Exercise Price") upon surrender of this Warrant Certificate and
payment of the Exercise Price at an office or agency of the Company, but subject
to the conditions set forth herein and in the Representative's Warrant Agreement
dated as of _____ ___, 1998 among the Company and National (the "Warrant
Agreement"). Payment of the Exercise Price shall be made by certified or
official bank check in New York Clearing House funds payable to the order of the
Company.
EXH. A-1
27
No Warrant may be exercised after 5:30 p.m., New York time, on
the Expiration Date, at which time all Representative's Warrants evidenced
hereby, unless exercised prior thereto, shall thereafter be void.
The Representative's Warrants evidenced by this Warrant
Certificate are part of a duly authorized issue of Representative's Warrants
issued pursuant to the Warrant Agreement, which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder) of
the Representative's Warrants.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price and the type and/or number of the Company's
securities issuable thereupon may, subject to certain conditions, be adjusted.
In such event, the Company will, at the request of the holder, issue a new
Warrant Certificate evidencing the adjustment in the Exercise Price and the
number and/or type of securities issuable upon the exercise of the
Representative's Warrants; provided, however, that the failure of the Company to
issue such new Warrant Certificates shall not in any way change, alter, or
otherwise impair, the rights of the holder as set forth in the Warrant
Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Representative's Warrants shall be issued to the transferee(s) in exchange
for this Warrant Certificate, subject to the limitations provided herein and in
the Warrant Agreement, without any charge except for any tax or other
governmental charge imposed in connection with such transfer.
Upon the exercise of less than all of the Representative's
Warrants evidenced by this Warrant Certificate, the Company shall forthwith
issue to the holder hereof a new Warrant Certificate representing such numbered
unexercised Representative's Warrants.
The Company may deem and treat the registered holder(s) hereof as
the absolute owner(s) of this Warrant Certificate (notwithstanding any notation
of ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in
the Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
EXH. A-2
28
This Warrant Certificate does not entitle any holder thereof to
any of the rights of a shareholder of the Company.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed under its corporate seal.
Dated as of ____ ___, 1998.
ATTEST: TEAM COMMUNICATIONS GROUP, INC.
___________________________ By:_____________________________________
Name:
Title:
EXH. A-3
29
FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 4
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _________ Shares of Common
Stock and herewith tenders in payment for such securities a certified or
official bank check payable in New York Clearing House Funds to the order of
Team Communications Group, Inc. (the "Company") in the amount of $_____, all in
accordance with the terms of Section 4 of the Representative's Warrant Agreement
dated as of ____ __, 1998 among the Company and National Securities Corporation.
The undersigned requests that a certificate for such securities be registered in
the name of _________________________________________ , whose address is
_______________________ and that such certificate be delivered to
________________ , whose address is ______________________, and if said number
of shares shall not be all the shares purchasable hereunder, that a new Warrant
Certificate for the balance of the shares purchasable under the within Warrant
Certificate be registered in the name of the undesigned warrant holder or his
assignee as below indicated and delivered to the address stated below.
Dated:
Signature:____________________
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate.)
Address: ______________________________
______________________________
__________________________________________
(Insert Social Security or Other
Identifying Number of Holder)
Signature Guaranteed:___________________________________________________________
(Signature must be guaranteed by a bank savings and loan association,
stockbroker, or credit union with membership in an approved signature guaranty
Medallion Program pursuant to Securities Exchange Act Rule 17Ad-15.)
EXH. A-4
30
FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 4.2
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase __________ Shares all in
accordance with the terms of Section 4.2 of the Representative's Warrant
Agreement dated as of _________ __, 1998 between Team Communications Group, Inc.
and National Securities Corporation. The undersigned requests that certificates
for such securities be registered in the name of ________________ whose address
is ____________________________________ and that such certificates be delivered
to _______________________ whose address is __________________________________.
Dated:
Signature________________________________________
(Signature must conform in all respects to name of holder as
specified on the face of the Warrant Certificate)
Address:_________________________________________
_________________________________________________
_________________________________________________
(Insert Social Security or Other
Identifying Number of Holder)
EXH. A-5
31
FORM OF ASSIGNMENT
(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH HOLDER
DESIRES TO TRANSFER THE WARRANT CERTIFICATE.)
FOR VALUE RECEIVED ______________________ here sells, assigns and transfers unto
_________________ this Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
_______________ Attorney, to transfer the within Warrant Certificate on the
books of the within-named Company, with full power of substitution.
Dated: ______________________
Signature:________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
Address: _________________________________
_________________________________
__________________________________________
(Insert Social Security or Other
Identifying Number of Holder)
Signature Guaranteed:___________________________________________________________
(Signature must be guaranteed by a bank savings and loan association,
stockbroker, or credit union with membership in an approved signature guaranty
Medallion Program pursuant to Securities Exchange Act Rule 17Ad-15.)
EXH. A-6