1
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED
FOR SALE OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT
AND APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION
OF COUNSEL (WHO MAY BE AN EMPLOYEE OF SUCH HOLDER) REASONABLY SATISFACTORY TO
THE COMPANY THAT REGISTRATION, QUALIFICATION OR OTHER SUCH ACTIONS ARE NOT
REQUIRED UNDER SAID ACT. THE OFFERING OF THIS SECURITY HAS NOT BEEN REVIEWED
OR APPROVED BY ANY STATE'S SECURITIES ADMINISTRATOR. THIS WARRANT AND THE
SHARES OF COMMON STOCK PURCHASABLE HEREUNDER ARE ALSO BENEFITED BY AND SUBJECT
TO A REGISTRATION RIGHTS AGREEMENT, DATED AS OF DECEMBER 31, 1997, BY AND AMONG
THE COMPANY AND THE OTHER PARTIES LISTED THEREIN, A COPY OF WHICH IS ON FILE
WITH THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST AND WITHOUT CHARGE.
Dated: December 31, 1997
WARRANT
To Purchase 509,358 Shares of Common Stock
EXPIRING December 31, 2007.
THIS IS TO CERTIFY THAT, for value received, INDOSUEZ CM II, INC., or
registered assigns (the "Holder") is entitled to purchase from Wheels Sports
Group, Inc., a North Carolina corporation (the "Company"), at any time or from
time to time prior to 5:00 p.m., New York City time, on December 31, 2007 at
the place where a Warrant Agency (as hereinafter defined) is located, at the
Exercise Price (as hereinafter defined), the number of shares of Common Stock,
par value $0.01 per share (the "Common Stock"), of the Company shown above, all
subject to adjustment and upon the terms and conditions as hereinafter
provided, and is entitled also to exercise the other appurtenant rights, powers
and privileges hereinafter described. This Warrant is one of one or more
warrants (the "Warrants") of the same form and having the same terms as this
Warrant. The Holder shall designate at the time of exercise whether the shares
of Common Stock to be received shall be voting Common Stock or nonvoting Common
Stock.
The Warrants granted to the Holder hereunder shall become exercisable
on March 31, 1998; provided that the Warrants shall not become exercisable on
such date and shall be void and of no further force or effect if on or prior to
such
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date the Company's merger with Racing Champions Corporation shall have been
consummated; provided further that such date shall be extended to April 30,
1998 if, on or prior to March 31, 1998, the Company pays an aggregate of
$100,000 to the Holders.
Certain terms used in this Warrant are defined in Article V.
ARTICLE I
EXERCISE OF WARRANTS
1.1 Method of Exercise. To exercise this Warrant in whole or in
part, the Holder shall deliver to the Company, at the Warrant Agency, (a) this
Warrant, (b) a written notice, in substantially the form of the Subscription
Notice attached hereto, of such Holder's election to exercise this Warrant,
which notice shall specify the number of shares of Common Stock to be
purchased, whether such shares are to be voting or non-voting shares, the
denominations of the share certificate or certificates desired and the name or
names in which such certificates are to be registered, and (c) payment of the
Exercise Price with respect to such shares. Notwithstanding the foregoing,
this Warrant shall be exercisable only, to the extent and at the time or times,
that the Holder could legally take possession and title of such shares.
Payment made pursuant to clause (c) above may be made, at the option of the
Holder: (x) by cash, money order, certified or bank cashier's check or wire
transfer, (y) the surrender to the Company of securities of the Company having
a value equal to the aggregate Exercise Price, as determined in good faith by
the Company's board of directors, or (z) the delivery of a notice to the
Company that the Holder is exercising this Warrant by authorizing the Company
to reduce the number of shares of Common Stock subject to this Warrant by the
number of shares having an aggregate value equal to the aggregate Exercise
Price, as determined in good faith by the Company's board of directors.
The Company shall, as promptly as practicable and in any event within
three Business Days thereafter, execute and deliver or cause to be executed and
delivered, in accordance with such notice, a certificate or certificates
representing the aggregate number and type of shares of Common Stock specified
in said notice. The share certificate or certificates so
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delivered shall be in such denominations as may be specified in such notice or,
if such notice shall not specify denominations, shall be in the amount of the
number of shares of Common Stock for which the Warrant is being exercised, and
shall be issued in the name of the Holder or such other name or names as shall
be designated in such notice, subject to Section 1.4. Such certificate or
certificates shall be deemed to have been issued, and such Holder or any other
Person so designated to be named therein shall be deemed for all purposes to
have become a holder of record of such shares, as of the date the
aforementioned notice is received by the Company. If this Warrant shall have
been exercised only in part, the Company shall, at the time of delivery of the
certificate or certificates, deliver to the Holder a new Warrant evidencing the
rights to purchase the remaining shares of Common Stock called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant, or, at the request of the Holder, appropriate notation may be made on
this Warrant which shall then be returned to the Holder. The Company shall pay
all expenses, taxes and other charges payable in connection with the
preparation, issuance and delivery of share certificates and new Warrants,
except that, if share certificates or new Warrants shall be registered in a
name or names other than the name of the Holder, funds sufficient to pay all
transfer taxes payable as a result of such transfer shall be paid by the Holder
at the time of delivering the aforementioned notice of exercise or promptly
upon receipt of a written request of the Company for payment. Notwithstanding
the foregoing, only shares of nonvoting Common Stock shall be issued to a
Regulated Stockholder if such issuance would result in a violation of
Regulation Y.
1.2 Shares To Be Fully Paid and Nonassessable. All shares of Common
Stock issued upon the exercise of this Warrant shall be validly issued, fully
paid and nonassessable and free from all preemptive rights of any stockholder,
and from all taxes, liens and charges with respect to the issue thereof (other
than transfer taxes) and, if the Common Stock is then listed on any national
securities exchanges (as defined in the Exchange Act) or quoted on NASDAQ
within 120 days after completion of a public offering of the Company's Stock
pursuant to a Registration Statement under the Securities Act, be duly listed
or quoted thereon, as the case may be; provided the Company shall not be
required to cause any shares of nonvoting Common Stock to be listed or quoted.
1.3 No Fractional Shares To Be Issued. The Company shall not be
required to issue fractions of shares of Common Stock upon exercise of this
Warrant. If any fraction of a
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share would, but for this Section, be issuable upon any exercise of this
Warrant, and if the Company shall have elected not to issue such fraction of a
share, in lieu of such fractional share the Company shall pay to the Holder, in
cash, an amount equal to such fraction of the Fair Market Value per share of
outstanding Common Stock of the Company on the Business Day immediately prior
to the date of such exercise.
1.4 Share Legend. Each certificate for shares of Common Stock issued
upon exercise of this Warrant, unless at the time of exercise such shares are
registered under the Securities Act, shall bear the following legend:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION
AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS
REGISTERED OR QUALIFIED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS
OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT REGISTRATION, QUALIFICATION OR OTHER SUCH
ACTIONS ARE NOT REQUIRED UNDER SAID ACT. THE OFFERING OF THIS SECURITY HAS
NOT BEEN REVIEWED OR APPROVED BY ANY STATE SECURITIES ADMINISTRATOR. THIS
SECURITY IS ALSO BENEFITED BY AND SUBJECT TO A REGISTRATION RIGHTS
AGREEMENT, DATED AS OF DECEMBER 31, 1997, BETWEEN THE COMPANY AND THE OTHER
PARTIES LISTED THEREIN, A COPY OF WHICH IS ON FILE WITH THE COMPANY AND
WILL BE FURNISHED UPON WRITTEN REQUEST AND WITHOUT CHARGE."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon
completion of a public distribution pursuant to a registration statement under
the Securities Act) shall also bear such legend unless, in the opinion of
counsel selected by the holder of such certificate (who may be an employee of
such holder) reasonably satisfactory to the Company, the securities represented
thereby are no longer subject to restrictions on resale under the Securities
Act.
1.5 Reservation; Authorization. The Company has reserved and will
keep available for issuance upon exercise of the Warrants the total number of
shares of Common Stock deliverable upon exercise of all Warrants from time to
time outstanding. The issuance of such shares has been duly and validly
authorized and, when issued and sold in accordance with the Warrants, such
shares will be duly and validly issued, fully paid and nonassessable.
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ARTICLE II
WARRANT AGENCY; TRANSFER, EXCHANGE
AND REPLACEMENT OF WARRANTS
2.1 Warrant Agency. If the Requisite Holders shall request
appointment of an independent warrant agency with respect to the Warrants, the
Company shall promptly appoint and thereafter maintain, at its own expense, an
agency, which agency may be the Company's then existing transfer agent (the
"Warrant Agency"), for certain purposes specified herein, and shall give prompt
notice of such appointment (and appointment of any successor Warrant Agency) to
all holders of Warrants. Until an independent Warrant Agency is so appointed,
the Company shall perform the obligations of the Warrant Agency provided herein
at its address set forth in Section 6.1 hereof or such other address as the
Company shall specify by notice to all Warrantholders.
2.2 Ownership of Warrant. The Company may deem and treat the Person
in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by any
Person other than the Warrant Agency) for all purposes and shall not be
affected by any notice to the contrary, until presentation of this Warrant for
registration of transfer as provided in this Article II.
2.3 Transfer of Warrant. The Company agrees to maintain at the
Warrant Agency books for the registration of transfers of the Warrants, and
transfer of this Warrant and all rights hereunder shall be registered, in whole
or in part, on such books, upon surrender of this Warrant at the Warrant
Agency, together with a written assignment of this Warrant duly executed by the
Holder or his duly authorized agent or attorney, with (unless the Holder is the
original Warrantholder) signatures guaranteed by a bank or trust company or a
broker or dealer registered with the NASD, and funds sufficient to pay any
transfer taxes payable upon such transfer. Upon surrender the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees and in the denominations specified in the instrument of assignment,
and this Warrant shall promptly be cancelled. Notwithstanding the foregoing, a
Warrant may be exercised by a new holder in accordance with the procedures set
forth herein without having a new Warrant issued. The Warrant Agency shall not
be required to register any transfers if the Holder fails to furnish to the
Company, after a request therefor, an opinion of counsel reasonably
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satisfactory to the Company that such transfer is exempt from the registration
requirements of the Securities Act; provided that the Company agrees not to
request an opinion of counsel with respect to transfers by an affiliate of
Credit Agricole Indosuez to its employees so long as such persons furnish
documentation reasonably satisfactory to the Company.
2.4 Division or Combination of Warrants. This Warrant may be divided
or combined with other Warrants upon surrender hereof and of any Warrant or
Warrants with which this Warrant is to be combined at the Warrant Agency,
together with a written notice specifying the names and denominations in which
the new Warrant or Warrants are to be issued, signed by the holders hereof and
thereof or their respective duly authorized agents or attorneys. Subject to
compliance with Section 2.3 as to any transfer which may be involved in the
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
2.5 Loss, Theft, Destruction or Mutilation of Warrants. Upon receipt
of evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security reasonably satisfactory to
the Company (the original Warrantholder's or any institutional Holder's
indemnity being satisfactory indemnity in the event of loss, theft or
destruction of any Warrant owned by such holder), or, in the case of any such
mutilation, upon surrender and cancellation of such Warrant, the Company will
make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant,
a new Warrant of like tenor and representing the right to purchase the same
aggregate number of shares of Common Stock as provided for in such lost,
stolen, destroyed or mutilated Warrant.
2.6 Expenses of Delivery of Warrants. The Company shall pay all
expenses, taxes (other than transfer taxes or income taxes of a Holder) and
other charges payable in connection with the preparation, issuance and delivery
of Warrants and shares issuable upon exercise of the Warrants hereunder.
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ARTICLE III
CERTAIN RIGHTS
3.1 Registration Rights. The Common Stock issuable upon exercise of
this Warrant is entitled to the benefits of the Registration Rights Agreement
dated as of December 31, 1997, by and among the Company and the other parties
listed therein (the "Registration Rights Agreement"). The Company shall keep a
copy of the Registration Rights Agreement, and any amendments thereto, at the
Warrant Agency and shall furnish copies thereof to the Holder upon request.
3.2 Contest and Appraisal Rights. Upon each determination of Fair
Market Value hereunder (other than a determination relating solely to setting
the value of fractional shares), the Company shall promptly give notice thereof
to all Warrantholders, setting forth in reasonable detail the calculation of
such Fair Market Value and the method and basis of determination thereof, as
the case may be. If the Requisite Holders shall disagree with such
determination and shall, by notice to the Company given within 30 days after
the Company's notice of such determination, elect to dispute such
determination, such dispute shall be resolved in accordance with this Section
3.2. In the event that a determination of Market Price, or a determination of
Fair Market Value solely involving Market Price, is disputed, such dispute
shall be submitted, at the Company's expense, to a New York Stock Exchange
member firm selected by the Company and acceptable to the Warrantholders, whose
determination of Fair Market Value and/or Market Price, as the case may be,
shall be binding on the Company and the Warrantholders. In the event that a
determination of Fair Market Value, other than a determination solely involving
Market Price, is disputed, such dispute shall be resolved through the
Appraisal Procedure.
3.3 Certain Covenants. The Company covenants and agrees that:
(a) Promptly after the effective date of the Credit Agreement dated
as of December 31, 1997 among the Company, Credit Agricole Indosuez, as Agent
and Collateral Agent, and the lending institutions party from time to time
thereto and, in any case, prior to the time when this Warrant becomes
exercisable, the Company will use its best efforts to amend its certificate of
incorporation to authorize shares of nonvoting securities in form and substance
satisfactory to each Holder.
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(b) Until exercise or cancellation of this Warrant, as soon as
available but not later than ninety (90) days after the close of the fiscal
year of the Company, the Company will deliver to each Holder a consolidated
balance sheet of the Company as at the end of such year and the related
consolidated and consolidating statements of income, of stockholders' equity
and of cash flows for such year, such consolidated statements to be audited by
Arthur Andersen & Co. LLP or other "Big Six" accounting firm;
(c) Until exercise or cancellation of this Warrant, as soon as
available but not later than forty-five (45) days after the end of each
quarter, the Company will deliver to each Holder a consolidated balance sheet
of the Company as at the end of, and the related consolidated statements of
income, of stockholders' equity and of cash flows for the portion of the
Company's fiscal year then elapsed, all prepared in accordance with generally
accepted accounting principles;
(d) Until exercise or cancellation of this Warrant, as soon as
available, the Company will deliver to each Holder any and all management
letters provided to the Company's board of directors or audit committee by the
Company's auditors; and
(e) Until exercise or cancellation of this Warrant, as soon as
available, the Company will deliver to each Holder any and all reports filed by
the Company under the Securities Act and the Exchange Act.
3.4 Observation Rights. The initial holders of the Warrants (or
shares issued upon exercise thereof bearing the legend set forth in Section 1.4
hereof) shall, so long as they and their Affiliates own at least 50,000
Warrants (or 50,000 shares issued upon exercise thereof), be entitled to
designate one observer (an "Observer") to attend all meetings of the Board and
all committees thereof. The Company will give the Observer reasonable prior
notice (it being agreed that the same prior notice given to the Board shall be
deemed reasonable prior notice) in any matter permitted in the Company's
by-laws for notice to directors of the time and place of any proposed meeting
of the Board, such notice in all cases to include true and complete copies of
all documents furnished to any director in connection with such meeting. The
Observer will be entitled to be present in person as an observer to any such
meeting or, if a meeting is held by telephone conference, to participate
therein for the purpose of listening thereto. The Company will deliver to the
Observer copies of all papers which may be distributed from time to time to the
directors of the Company at
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such time as such papers are so distributed to them, including copies of any
written consent. The right to an Observer shall terminate upon the earlier of
the closing of the merger with Racing Champions Corporation or December 31,
1999.
ARTICLE IV
ANTIDILUTION PROVISIONS
4.1 Adjustments Generally. The Exercise Price and the number of
shares of Common Stock (or other securities or property) issuable upon exercise
of this Warrant shall be subject to adjustment from time to time upon the
occurrence of certain events, as provided in this Article IV.
4.2 Common Stock Reorganization. If the Company shall after the date
of issuance of this Warrant subdivide its outstanding shares of Common Stock
into a greater number of shares or consolidate its outstanding shares of Common
Stock into a smaller number of shares (any such event being called a "Common
Stock Reorganization"), then (a) the Exercise Price shall be adjusted,
effective immediately after the record date at which the holders of shares of
Common Stock are determined for purposes of such Common Stock Reorganization,
to a price determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on such record date before giving
effect to such Common Stock Reorganization and the denominator of which shall
be the number of shares of Common Stock outstanding after giving effect to such
Common Stock Reorganization, and (b) the number of shares of Common Stock
subject to purchase upon exercise of this Warrant shall be adjusted, effective
at such time, to a number determined by multiplying the number of shares of
Common Stock subject to purchase immediately before such Common Stock
Reorganization by a fraction, the numerator of which shall be the number of
shares outstanding after giving effect to such Common Stock Reorganization and
the denominator of which shall be the number of shares of Common Stock
outstanding immediately before such Common Stock Reorganization.
4.3 Common Stock Distribution. (a) If the Company shall after the
date of issuance of this Warrant issue or otherwise sell or distribute any
shares of Common Stock, otherwise than pursuant to a Common Stock
Reorganization (any such event, including any event described in paragraphs (b)
and (c) below,
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being herein called a "Common Stock Distribution"), if such Common Stock
Distribution shall be for a consideration per share less than the Fair Market
Value per share of outstanding Common Stock of the Company on the date of such
Common Stock Distribution, or on the first date of the announcement of such
Common Stock Distribution (whichever is less), then, effective upon such Common
Stock Distribution, the number of shares of Common Stock purchasable upon
exercise of this Warrant shall be adjusted by multiplying the number of shares
of Common Stock subject to purchase upon exercise of this Warrant by a
fraction, the numerator of which shall be the total number of shares of Common
Stock outstanding (and issuable upon exercise or conversion of outstanding
options, warrants and convertible securities) immediately prior to such Common
Stock Distribution plus the number of shares of Common Stock issued (or deemed
to be issued pursuant to paragraphs (b) and (c) below) in such Common Stock
Distribution and the denominator of which shall be an amount equal to the sum
of (A) the number of shares of Common Stock outstanding (and issuable upon
exercise or conversion of outstanding options, warrants and convertible
securities) immediately prior to such Common Stock Distribution, plus (B) the
number of shares of Common Stock which the aggregate consideration, if any,
received by the Company (determined as provided below) for such Common Stock
Distribution would buy at the Fair Market Value thereof, as of the date
immediately prior to such Common Stock Distribution or as of the date
immediately prior to the date of announcement of such Common Stock Distribution
(whichever is less). In the event of any such adjustment, the Exercise Price
for each Warrant shall be adjusted to a number determined by dividing the
Exercise Price immediately prior to such Common Stock Distribution by the
fraction used for purposes of the aforementioned adjustment.
The provisions of this paragraph (a), including by operation of
paragraph (b) or (c) below, shall not operate to increase the Exercise Price or
to reduce the number of shares of Common Stock subject to purchase upon
exercise of this Warrant.
(b) If the Company shall after the date of issuance of this Warrant
issue, sell, distribute or otherwise grant in any manner (whether directly or
by assumption in a merger or otherwise) any rights to subscribe for or to
purchase, or any warrants or options for the purchase of, Common Stock or any
stock or securities convertible into or exchangeable for Common Stock (such
rights, warrants or options being herein called "Options" and such convertible
or exchangeable stock or securities being herein called "Convertible
Securities"), whether or
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not such Options or the rights to convert or exchange any such Convertible
Securities are immediately exercisable, and the price per share for which
Common Stock is issuable upon the exercise of such Options or upon conversion
or exchange of such Convertible Securities (determined by dividing (i) the
aggregate amount, if any, received or receivable by the Company as
consideration for the granting of such Options, plus the minimum aggregate
amount of additional consideration payable to the Company upon the exercise of
all such Options, plus, in the case of Options to acquire Convertible
Securities, the minimum aggregate amount of additional consideration, if any,
payable upon the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (ii) the total maximum number of shares of
Common Stock issuable upon the exercise of such Options or upon the conversion
or exchange of all such Convertible Securities issuable upon the exercise of
such Options) shall be less than the Fair Market Value per share of outstanding
Common Stock of the Company on the date of granting such Options or on the date
of announcement thereof (whichever is less), then for purposes of paragraph (a)
above, the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon conversion or exchange of the total maximum
amount of such Convertible Securities issuable upon the exercise of such
Options shall be deemed to have been issued as of the date of granting of such
Options and thereafter shall be deemed to be outstanding and the Company shall
be deemed to have received as consideration such price per share, determined as
provided above, therefor. Except as otherwise provided in paragraph (d) below,
no additional adjustment of the number of shares of Common Stock purchasable
upon the exercise of this Warrant or of the Exercise Price shall be made upon
the actual exercise of such Options or upon conversion or exchange of such
Convertible Securities.
(c) If the Company shall after the date of issuance of this Warrant
issue, sell or otherwise distribute or grant (whether directly or by assumption
in a merger or otherwise) any Convertible Securities, whether or not the rights
to exchange or convert thereunder are immediately exercisable, and the price
per share for which Common Stock is issuable upon such conversion or exchange
(determined by dividing (i) the aggregate amount received or receivable by the
Company as consideration for the issue, sale or distribution of such
Convertible Securities, plus, the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (ii) the total maximum number of shares of Common Stock issuable
upon the conversion or exchange of all such Convertible Securities) shall be
less than the Fair
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Market Value per share of outstanding Common Stock of the Company on the date
of such issue, sale or distribution or on the date of announcement thereof
(whichever is less), then, for purposes of paragraph (a) above, the total
maximum number of shares of Common Stock issuable upon conversion or exchange
of all such Convertible Securities shall be deemed to have been issued as of
the date of the issue, sale or distribution of such Convertible Securities and
thereafter shall be deemed to be outstanding and the Company shall be deemed to
have received as consideration such price per share, determined as provided
above, therefor. Except as otherwise provided in paragraph (d) below, no
additional adjustment of the number of shares of Common Stock purchasable upon
exercise of this Warrant or of the Exercise Price shall be made upon the actual
conversion or exchange of such Convertible Securities.
(d) If the purchase price provided for in any Option referred to in
paragraph (b) above, the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in paragraph
(b) or (c) above, or the rate at which any Convertible Securities referred to
in paragraph (b) or (c) above are convertible into or exchangeable for Common
Stock shall change at any time (other than under or by reason of provisions
designed to protect against, and having the effect of protecting against,
dilution upon an event which results in a related adjustment pursuant to this
Article IV), the number of shares of Common Stock purchasable upon exercise of
this Warrant and the Exercise Price then in effect shall forthwith be
readjusted (effective only with respect to any exercise of this Warrant after
such readjustment) to the number of shares of Common Stock purchasable upon
exercise of this Warrant and the Exercise Price which would then be in effect
had the adjustment made upon the issue, sale, distribution or grant of such
Options or Convertible Securities been made based upon such changed purchase
price, additional consideration or conversion rate, as the case may be;
provided, however, that such readjustment shall give effect to such change only
with respect to such Options and Convertible Securities as then remain
outstanding. If, at any time after any adjustment of the number of shares of
Common Stock purchasable upon exercise of each Warrant or the Exercise Price
shall have been made pursuant to this Article IV on the basis of the issuance
of any Option or Convertible Securities or after any new adjustments of the
number of shares of Common Stock purchasable upon exercise of each Warrant or
the Exercise Price shall have been made pursuant to this paragraph, the right
of conversion, exercise or exchange in such Option or Convertible Securities
shall expire or terminate, and the right of conversion, exercise
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or exchange in respect of a portion of such Option or Convertible Securities
shall not have been exercised, such previous adjustment shall be rescinded and
annulled. Thereupon, a recomputation shall be made of the effect of such
Option or Convertible Securities on the basis of treating the number of shares
of Common Stock, if any, theretofore actually issued or issuable pursuant to
the previous exercise of such right of conversion, exercise or exchange as
having been issued on the date or dates of such conversion, exercise or
exchange and for the consideration actually received and receivable therefor,
and treating any such Option or Convertible Securities which then remain
outstanding as having been granted or issued immediately after the time of any
such issuance for the consideration per share for which shares of Common Stock
are issuable under such Option or Convertible Securities; and, if and to the
extent called for by the foregoing provisions of this Section on the basis
aforesaid, a new adjustment of the number of shares of Common Stock purchasable
upon exercise of each Warrant and the Exercise Price shall be made, which new
adjustment shall supersede (effective only with respect to any exercise of this
Warrant after such readjustment) the previous adjustment so rescinded and
annulled.
(e) If the Company shall after the date of issuance of this Warrant
pay a dividend or make any other distribution upon any capital stock of the
Company payable in Common Stock, Options or Convertible Securities, then, for
purposes of paragraph (a) above, such Common Stock, Options or Convertible
Securities, as the case may be, shall be deemed to have been issued or sold
without consideration.
(f) If any shares of Common Stock, Options or Convertible Securities
shall be issued, sold or distributed for cash, the consideration received
therefor shall be deemed to be the amount received by the Company therefor net
of any underwriting commissions or concessions paid or allowed by the Company
in connection therewith. If any shares of Common Stock, Options or Convertible
Securities shall be issued, sold or distributed for a consideration other than
cash, the amount of the consideration other than cash received by the Company
shall be deemed to be the Fair Market Value of such consideration, after
deduction of any expenses incurred and any underwriting commissions or
concessions paid or allowed by the Company in connection therewith. If any
shares of Common Stock, Options or Convertible Securities shall be issued in
connection with any merger in which the Company is the surviving corporation,
the amount of consideration therefor shall be deemed to be the Fair Market
Value of such portion of the assets and business of the
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nonsurviving corporation as shall be attributable to such Common Stock, Options
or Convertible Securities, as the case may be. If any Options shall be issued
in connection with the issue and sale of other securities of the Company,
together comprising one integral transaction in which no specific consideration
is allocated to such Options by the parties thereto, such Options shall be
deemed to have been issued for consideration to be determined pursuant to the
Appraisal Procedure.
(g) If the Company shall take a record of the holders of the Common
Stock for the purpose of entitling them to receive a dividend or other
distribution payable in Common Stock, Options or Convertible Securities or to
subscribe for or purchase Common Stock, Options or Convertible Securities, then
such record date shall be deemed to be the date of the issue, sale,
distribution or grant of the shares of Common Stock deemed to have been issued
or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
(h) For purposes of determining whether any adjustment is required
pursuant to this Article IV, any security of the Company having rights
substantially equivalent to the Common Stock as to dividends or upon
liquidation, dissolution or winding up of the Company shall be treated as if
such security were Common Stock.
4.4 Dividends. If the Company shall after the date of issuance of
this Warrant issue or distribute to all or substantially all holders of shares
of Common Stock evidences of indebtedness, any other securities of the Company
or any property, assets or cash, and if such issuance or distribution does not
constitute a Common Stock Reorganization or a Common Stock Distribution (any
such nonexcluded event being herein called a "Dividend"), (i) the number of
shares of Common Stock subject to purchase upon exercise of this Warrant shall
be increased (but not decreased), effective immediately after the record date
at which the holders of shares of Common Stock are determined for purposes of
such Dividend, to a number determined by multiplying the number of shares of
Common Stock subject to purchase immediately before such Dividend by a
fraction, the numerator of which shall be the Fair Market Value per share of
outstanding Common Stock on such record date and the denominator of which shall
be the Fair Market Value per share of outstanding Common Stock of the Company
on such record date less the then Fair Market Value of the evidences of
indebtedness, securities, cash, or property or other assets issued or
distributed
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in such Dividend with respect to one share of Common Stock, and (ii) the
Exercise Price shall be decreased (but not increased) to a price determined by
multiplying the Exercise Price then in effect by a fraction, the numerator of
which shall be the number of shares of Common Stock subject to purchase upon
exercise of this Warrant immediately before such Dividend and the denominator
of which shall be the number of shares of Common Stock subject to purchase upon
exercise of this Warrant immediately after such Dividend. If after the date of
issuance of this Warrant the Company repurchases shares of Common Stock for a
per share consideration which exceeds the Fair Market Value (as calculated
immediately prior to such repurchase), then the number of shares of Common
Stock purchasable upon exercise of this Warrant and the Exercise Price shall be
adjusted in accordance with the foregoing provisions, as if, in lieu of such
repurchases, the Company had (I) distributed a Dividend having a Fair Market
Value equal to the Fair Market Value of all property and cash expended in the
repurchases, and (II) effected a reverse split of the Common Stock in the
proportion required to reduce the number of shares of Common Stock outstanding
from (A) the number of such shares outstanding immediately before such first
repurchase to (B) the number of such shares outstanding immediately following
all the repurchases.
4.5 Capital Reorganization. If after the date of issuance of this
Warrant there shall be any consolidation or merger to which the Company is a
party, other than a consolidation or a merger in which the Company is a
continuing corporation and which does not result in any reclassification of, or
change (other than a Common Stock Reorganization or a change in par value), in,
outstanding shares of Common Stock, or any sale or conveyance of the property
of the Company as an entirety or substantially as an entirety (any such event
being called a "Capital Reorganization"), then, effective upon the effective
date of such Capital Reorganization, the Holder shall have the right to
purchase, upon exercise of this Warrant, the kind and amount of shares of stock
and other securities and property (including cash) which the Holder would have
owned or have been entitled to receive after such Capital Reorganization if
this Warrant had been exercised immediately prior to such Capital
Reorganization, assuming such holder (i) is not a person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or conveyance was made, as the case may be ("constituent
person"), or an Affiliate of a constituent person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash or
other property receivable upon such
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Capital Reorganization (provided that if the kind or amount of securities, cash
or other property receivable upon such Capital Reorganization is not the same
for each share of Common Stock held immediately prior to such consolidation,
merger, sale or conveyance by other than a constituent person or an Affiliate
thereof and in respect of which such rights of election shall not have been
exercised ("non-electing share"), then for the purposes of this Section the
kind and amount of shares of stock and other securities or other property
(including cash) receivable upon such Capital Reorganization shall be deemed to
be the kind and amount so receivable per share by a plurality of the
non-electing shares). As a condition to effecting any Capital Reorganization,
the Company or the successor or surviving corporation, as the case may be,
shall execute and deliver to each Warrantholder and to the Warrant Agency an
agreement as to the Warrantholder's rights in accordance with this Section 4.5,
providing for subsequent adjustments as nearly equivalent as may be practicable
to the adjustments provided for in this Article IV. The provisions of this
Section 4.5 shall similarly apply to successive Capital Reorganizations.
4.6 Certain Other Events. If any event occurs after the date of
issuance of this Warrant as to which the foregoing provisions of this Article
IV are not strictly applicable or, if strictly applicable, would not, in the
good faith judgment of the Board of Directors of the Company, fairly protect
the purchase rights of the Warrants in accordance with the essential intent and
principles of such provisions, then such Board shall make such adjustments in
the application of such provisions, in accordance with such essential intent
and principles, as shall be reasonably necessary, in the good faith opinion of
such Board, to protect such purchase rights as aforesaid, but in no event shall
any such adjustment have the effect of increasing the Exercise Price or
decreasing the number of shares of Common Stock subject to purchase upon
exercise of this Warrant, or otherwise adversely affect the Warrantholders.
4.7 Adjustment Rules. (a) Any adjustments pursuant to this Article
IV shall be made successively whenever an event referred to herein shall occur.
(b) If the Company shall set a record date to determine the holders
of shares of Common Stock for purposes of a Common Stock Reorganization, Common
Stock Distribution, Dividend or Capital Reorganization, and shall legally
abandon such action prior to effecting such Action, then no adjustment shall be
made pursuant to this Article IV in respect of such action.
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(c) No adjustment in the amount of shares purchasable upon exercise
of this Warrant or in the Exercise Price shall be made hereunder unless such
adjustment increases or decreases such amount or price by one percent or more,
but any such lesser adjustment shall be carried forward and shall be made at
the time and together with the next subsequent adjustment which together with
any adjustments so carried forward shall serve to adjust such amount or price
by one percent or more.
(d) No adjustment in the Exercise Price shall be made hereunder if
such adjustment would reduce the exercise price to an amount below par value of
the Common Stock, which par value shall initially be $0.01 per share of Common
Stock.
(e) No adjustment shall be made pursuant to this Article IV in
respect of the issuance (or deemed issuance) or repurchase of shares of Common
Stock in connection with the exercise of the Warrants.
4.8 Proceedings Prior to Any Action Requiring Adjustment. As a
condition precedent to the taking of any action which would require an
adjustment pursuant to this Article IV, the Company shall take any action which
may be necessary, including obtaining regulatory approvals or exemptions, in
order that the Company may thereafter validly and legally issue as fully paid
and nonassessable all shares of Common Stock which the holders of Warrants are
entitled to receive upon exercise thereof.
4.9 Notice of Adjustment. Not less than 30 nor more than 40 days
prior to the record date or effective date, as the case may be, of any action
which requires or might require an adjustment or readjustment pursuant to this
Article IV, the Company shall give notice to each Warrantholder of such event,
describing such event in reasonable detail and specifying the record date or
effective date, as the case may be, and, if determinable, the required
adjustment and the computation thereof. If the required adjustment is not
determinable at the time of such notice, the Company shall give notice to each
Warrantholder of such adjustment and computation promptly after such adjustment
becomes determinable.
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ARTICLE V
DEFINITIONS
The following terms, as used in this Warrant, have the following
respective meanings:
"Appraisal Procedure" means a procedure whereby two independent
appraisers, one chosen by the Company and one by the Requisite Holders, shall
mutually agree upon the determinations then the subject of appraisal. Each
party shall deliver a notice to the other appointing its appraiser within 15
days after the Appraisal Procedure is invoked. If within 30 days after
appointment of the two appraisers they are unable to agree upon the amount in
question, a third independent appraiser shall be chosen within 10 days
thereafter by the mutual consent of such first two appraisers or, if such first
two appraisers fail to agree upon the appointment of a third appraiser, such
appointment shall be made by the American Arbitration Association, or any
organization successor thereto, from a panel of arbitrators having experience
in the appraisal of the subject matter to be appraised. The decision of the
third appraiser so appointed and chosen shall be given within 30 days after the
selection of such third appraiser. If three appraisers shall be appointed and
the determination of one appraiser is disparate from the middle determination
by more than twice the amount by which the other determination is disparate
from the middle determination, then the determination of such appraiser shall
be excluded, the remaining two determinations shall be averaged and such
average shall be binding and conclusive on the Company and the Warrantholders;
otherwise the average of all three determinations shall be binding and
conclusive on the Company and the Warrantholders. The costs of conducting any
Appraisal Procedure shall be borne by the Warrantholders requesting such
Appraisal Procedure, except (a) the fees and expenses of the appraiser
appointed by the Company and any costs incurred by the Company shall be borne
by the Company, (b) the fees and expenses of the appraiser appointed by the
Requisite Holders and any costs incurred by the Requisite Holders shall be
borne by the Requisite Holders, and (c) the fees and expenses of a third
appraiser shall be borne equally by the Company and the Requisite Holders,
provided that if such Appraisal Procedure shall result in a determination that
is disparate by 5% or more to the benefit of the holder from the Company's
initial determination, all costs of conducting such Appraisal Procedure shall
be borne by the Company.
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"Business Day" shall mean (a) if any class of Common Stock is listed
or admitted to trading on a national securities exchange, a day on which the
principal national securities exchange on which such class of Common Stock is
listed or admitted to trading is open for business or (b) if no class of Common
Stock is so listed or admitted to trading, a day on which any New York Stock
Exchange member firm is open for business.
"Capital Reorganization" shall have the meaning set forth in Section
4.5.
"Closing Price" with respect to any security on any day means (a) if
such security is listed or admitted for trading on a national securities
exchange, the reported last sales price regular way or, if no such reported
sale occurs on such day, the average of the closing bid and asked prices
regular way on such day, in each case as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which such class of security is listed or
admitted to trading, or (b) if such security is not listed or admitted to
trading on any national securities exchange, the last quoted sales price, or,
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market on such day as reported by NASDAQ or any comparable
system then in use or, if not so reported, as reported by any New York Stock
Exchange member firm reasonably selected by the Company for such purpose.
"Common Stock" shall have the meaning set forth in the first paragraph
of this Warrant subject to adjustment pursuant to Article IV.
"Common Stock Distribution" shall have the meaning set forth in
Section 4.3(a).
"Common Stock Reorganization" shall have the meaning set forth in
Section 4.2.
"Company" shall have the meaning set forth in the first paragraph of
this Warrant.
"Convertible Securities" shall have the meaning set forth in Section
4.3(b).
"Dividend" shall have the meaning set forth in Section 4.4.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any similar or successor federal statute, and the rules and regulations of
the Securities and Exchange Commission (or its successor) thereunder, all as
the same shall be in effect at the time.
"Exercise Price" shall mean $3.50 per share of Common Stock purchased
pursuant to the exercise of this Warrant.
"Fair Market Value" means the fair market value of the business or
property in question, as determined in good faith by the Board of Directors of
the Company, provided, however, that the Fair Market Value of any security for
which a Closing Price is available shall be the Market Price of such security.
The Fair Market Value of the Common Stock shall be the Fair Market Value of the
entire equity interest in the Company and its subsidiaries as a going concern,
minus the Fair Market Value of the Company's equity securities (if any)
entitled to a preference over the Common Stock in the event of a liquidation of
the Company. Notwithstanding the foregoing, if, at any date of determination
of the Fair Market Value of the entire equity interest in the Company, the
Common Stock of any class shall then be publicly traded, the Fair Market Value
of the Company on such date shall be the Market Price on such date multiplied
by the number of shares of Common Stock on a fully diluted basis, giving effect
to any consideration to be paid to the Company in connection with the exercise
or conversion of any security.
"Holder" shall have the meaning set forth in the first paragraph of
this Warrant.
"Market Price" with respect to any security on any day means the
average of the daily Closing Prices of a share or unit of such security for the
10 consecutive Business Days ending on the most recent Business Day for which a
Closing Price is available; provided, however, that in the event that, in the
case of Common Stock, the Market Price is determined during a period following
the announcement by the Company of (A) a dividend or distribution of Common
Stock, or (B) any subdivision, combination or reclassification of Common Stock
and prior to the expiration of 20 Business Days after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the Market Price
shall be appropriately adjusted to reflect the current market price per share
equivalent of Common Stock.
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"NASD" means The National Association of Securities Dealers, Inc.
"NASDAQ" means The National Association of Securities Dealers, Inc.
Automated Quotation System.
"Options" shall have the meaning set forth in Section 4.3(b).
"Registration Rights Agreement" shall have the meaning set forth in
Section 3.1.
"Regulated Stockholder" shall mean (i) any stockholder that is subject
to the provisions of Regulation Y of the Board of Governors of the Federal
Reserve System (12 C.F.R. Part 225) or any successor to such regulation
("Regulation Y"), so long as such stockholder shall hold, and only with respect
to, any voting Common Stock or nonvoting Common Stock, or securities issued
upon conversion(s) of such Common Stock, (ii) any affiliate of a Regulated
Stockholder that is a transferee of any voting Common Stock or nonvoting Common
Stock, so long as such affiliate shall hold, and only with respect to, any such
Common Stock or securities issued upon conversion(s) of such Common Stock and
(iii) any Holder to which such Regulated Stockholder or any of its affiliates
has transferred any voting Common Stock or nonvoting Common Stock, so long as
such transferee shall hold, and only with respect to, any Common Stock
transferred by such stockholder or affiliates or any securities issued upon
conversion of such Common Stock but only if such Holder is (or any affiliate of
such Holder is) subject to the provisions of Regulation Y.
"Requisite Holders" means the Holders of Warrants to purchase a
majority of the shares of Common Stock issuable upon exercise of the Warrants
(excluding Warrants held by the Company or any of its subsidiaries) at the time
outstanding.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and any similar or successor federal statute, and the rules and regulations of
the Securities and Exchange Commission (or its successor) thereunder, all as
the same shall be in effect at the time.
"Warrant Agency" shall have the meaning set forth in Section 2.1.
"Warrantholder" means a holder of a Warrant.
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"Warrants" shall have the meaning set forth in the first paragraph of
this Warrant.
ARTICLE VI
MISCELLANEOUS
6.1 Notices. All notices, requests, consents and other
communications provided for herein shall be in writing and shall be effective
upon delivery in person, faxed, or mailed by certified or registered mail,
return receipt requested, postage pre-paid, addressed as follows:
(i) if to the Company, to Wheels Sports Group, Inc., 149
Gasoline Alley Drive, Mooresville, North Carolina 27028, Telecopy No.
(704) 662-3005, Attention: Howard L. Correll, President; with a copy
to Berliner Zisser Walter & Gallegos, P.C., 1700 Lincoln Street, Suite
4700, Denver, Colorado 80203-4547, Telecopy No. (303) 830-1705,
Attention: Robert W. Walter, Esq;
(ii) if to an initial Holder of Warrants, to such Holder
c/o Credit Agricole Indosuez at 1211 Avenue of the Americas, 7th
Floor, New York, New York 10036, Telecopy No. (212) 278-2203,
Attention: Michael Arougheti, with a copy to Cahill Gordon & Reindel,
80 Pine Street, New York, New York 10005, Telecopy No. (212)
269-5420, Attention: John Schuster, Esq., and if to any subsequent
Holder of Warrants, to it at such address as may have been furnished
to the Company in writing by such Holder;
or, in any case, at such other address or addresses as shall have been
furnished in writing to the Company (in the case of a holder of Warrants) or to
the Holders of Warrants (in the case of the Company) in accordance with the
provisions of this paragraph.
6.2 Waivers; Amendments. No failure or delay of the Holder in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Holder are cumulative and not
exclusive of any rights or remedies which it would otherwise have. The
provisions of this Warrant may be
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amended, modified or waived with (and only with) the written consent of the
Company and the Requisite Holders; provided, however, that no such amendment,
modification or waiver shall, without the written consent of each Warrantholder
whose interest might be adversely affected by such amendment, modification or
waiver, (a) change the number of shares of Common Stock subject to purchase
upon exercise of this Warrant, the Exercise Price or provisions for payment
thereof or (b) amend, modify or waive the provisions of this Section or
Articles III or IV. The provisions of the Registration Rights Agreement may be
amended, modified or waived only in accordance with the respective provisions
thereof.
Any such amendment, modification or waiver effected pursuant to this
Section or the applicable provisions of the Registration Rights Agreement shall
be binding upon the holders of all Warrants and Warrant Shares, upon each
future holder thereof and upon the Company. In the event of any such
amendment, modification or waiver the Company shall give prompt notice thereof
to all Warrantholders and, if appropriate, notation thereof shall be made on
all Warrants thereafter surrendered for registration of transfer or exchange.
No notice or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances.
6.3 Governing Law. This Warrant shall be construed in accordance
with and governed by the laws of the State of New York without regard to
principles of conflicts of law.
6.4 Survival of Agreements; Representations and Warranties etc. All
representations, warranties and covenants made by the Company herein or in any
certificate or other instrument delivered by or on behalf of it in connection
with the Warrants shall be considered to have been relied upon by the Holder
and shall survive the issuance and delivery of the Warrants, regardless of any
investigation made by the Holder, and shall continue in full force and effect
so long as any Warrant is outstanding. All statements in any such certificate
or other instrument shall constitute representations and warranties hereunder.
6.5 Covenants to Bind Successor and Assigns. All covenants,
stipulations, promises and agreements in this Warrant contained by or on behalf
of the Company shall bind its successors and assigns, whether so expressed or
not.
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6.6 Severability. In case any one or more of the provisions
contained in the Registration Rights Agreement or this Warrant shall be
invalid, illegal or unenforceable in any respect, the validity, legality or
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
6.7 Section Headings. The section headings used herein are for
convenience of reference only, are not part of this Warrant and are not to
affect the construction of or be taken into consideration in interpreting this
Warrant.
6.8 No Rights as Stockholder. This Warrant shall not entitle the
Holder to any rights as a stockholder of the Company.
6.9 No Impairment. The Company shall not by any action including,
without limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of the Holder against impairment. Without limiting the generality of
the foregoing, the Company will (a) not, directly or indirectly, increase the
par value of any shares of Common Stock receivable upon the exercise of this
Warrant above the amount payable therefor upon such exercise immediately prior
to such increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Stock upon the exercise of this Warrant, and
(c) use its commercially reasonable best efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Warrant.
6.10 Submission to Jurisdiction; Venue. (a) Any legal action or
proceeding with respect to this Warrant may be brought in the courts of the
State of New York or of the United States for the Southern District of New
York, and, by execution and delivery of this Warrant, the Company irrevocably
accepts
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for itself and in respect of its property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts. The Company further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to CT Corporation Systems at its
address at 1633 Broadway, New York, New York 10019, such service to become
effective 30 days after such mailing. Nothing herein shall affect the right of
the Holder to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against the Company in any other
jurisdiction.
(b) The Company hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or or in connection with this Warrant brought in the
courts referred to in clause (a) above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
26
IN WITNESS WHEREOF, Wheel Sports Group, Inc. has caused this Warrant
to be executed in its corporate name by one of its officers thereunto duly
authorized, as of the day and year first above written.
Wheel Sports Group, Inc.
By: /s/ HOWARD L. GOFFER, JR.
-------------------------------
Name: Howard L. Goffer, Jr.
Title: President
27
SUBSCRIPTION NOTICE
(To be executed upon exercise of Warrant)
TO :
The undersigned hereby irrevocably elects to exercise the right to
purchase represented by the attached Warrant for, and to purchase thereunder,
_________________ shares of voting [non-voting] Common Stock, as provided for
therein, and tenders herewith payment of the Exercise Price in full in
accordance with the terms of the attached Warrant.
Please issue a certificate or certificates for such shares of Common
Stock in the following name or names and denominations:
If said number of shares shall not be all the shares issuable upon
exercise of the attached Warrant, a new Warrant is to be issued in the name of
the undersigned for the balance remaining of such shares less any fraction of a
share paid in cash.
Dated: , 19
------------- --
------------------------------------------
Note: The above signature should
correspond exactly with the name on
the face of the attached Warrant or
with the name of the assignee
appearing in the assignment form
below.
28
ASSIGNMENT
(To be executed upon assignment of Warrant)
For value received, ______________________________ hereby sells,
assigns and transfers unto __________________ the attached Warrant, together
with all rights, title and interest therein, and does hereby irrevocably
constitute and appoint _________________ attorney to transfer said Warrant on
the books of ____________________, with full power of substitution in the
premises.
------------------------------------------
Note: The above signature should
correspond exactly with the name
on the face of the attached
Warrant.