THIS COMMON STOCK PURCHASE WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"); OR UNDER ANY APPLICABLE LAW OR
REGULATION OF ANY STATE. THIS COMMON STOCK WARRANT MAY NOT BE SOLD, OFFERED,
ASSIGNED OR TRANSFERRED UNLESS THE WARRANT IS REGISTERED UNDER THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS, OR SUCH OFFERS, SALES, ASSIGNMENTS AND
TRANSFERS ARE MADE PURSUANT TO THE AVAILABLE EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THOSE LAWS. FURTHERMORE, THESE SECURITIES ARE SUBJECT TO CERTAIN
LIMITATIONS ON EXERCISE, AND THE SHARES OF COMMON STOCK RECEIVED UPON EXERCISE
ARE SUBJECT TO CERTAIN LIMITATIONS ON SALE, IN EACH CASE AS DESCRIBED IN THAT
CERTAIN SECURITIES PURCHASE AGREEMENT DATED THE DATE HEREOF (THE "PURCHASE
AGREEMENT") BETWEEN, AMONG OTHERS, THE COMPANY AND THE INITIAL HOLDER HEREOF.
THIS COMMON STOCK PURCHASE WARRANT CERTIFICATE REFERS TO AND IS SPECIFICALLY
GOVERNED BY CERTAIN PROVISIONS CONTAINED IN THE PURCHASE AGREEMENT, A COPY OF
WHICH IS ON FILE WITH AND MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL
PLACE OF BUSINESS.
TAKE-TWO INTERACTIVE SOFTWARE, INC.
COMMON STOCK PURCHASE WARRANT
DATED: October 14, 1997
--------------------------------------------------------------------------------
No. 3 Glacier Capital Limited
Number of Common Shares: 57,500 Holder: 00 Xxxxxxxx Xxxxxx
Purchase Price: $6.46 London, England
Expiration Date: October 14, 2002 WIY 7TG
For identification only.
The governing terms of this Warrant are set forth below.
--------------------------------------------------------------------------------
TAKE-TWO INTERACTIVE SOFTWARE, INC., a Delaware corporation (the
"Company"), hereby certifies that, for value received, Glacier Capital Limited
or its assigns (each a "Holder"), is entitled, subject to the terms set forth
below, to purchase from the Company at any time or from time to time after the
date hereof and prior to October 14, 2002 (the "Exercise Period"), at the
Purchase Price hereafter defined, Fifty-Seven Thousand Five Hundred (57,500)
fully paid and nonassessable shares of Common Stock (as hereinafter defined) of
the Company. The number and character of such shares of Common Stock and the
Purchase Price are subject to adjustment as provided herein.
This Warrant (this "Warrant"; such term to include any warrants issued in
substitution therefor) is one of a series of Common Stock Purchase Warrants
issued in connection with that certain Securities Purchase Agreement (the
"Purchase Agreement") dated of even date herewith between, among others, the
initial Holder hereof and the Company.
COMMON STOCK PURCHASE WARRANT NO. 3- Page 1 Warrant 3
(Take-Two Interactive Software, Inc.)
The purchase price per share of Common Stock issuable upon exercise of this
Warrant (the "Purchase Price") shall initially be $6.46; provided, however, that
the Purchase Price shall be adjusted from time to time as provided herein.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include Take-Two Interactive Software,
Inc. and any entity that shall succeed or assume the obligations of such
corporation hereunder.
(b) The term "Common Stock" includes (a) the Company's common stock,
$.01 par value per share, (b) any other capital stock of any class or
classes (however designated) of the Company, authorized on or after such
date, the holders of which shall have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends and
liquidating dividends after the payment of dividends and distributions on
any shares entitled to preference, and the holders of which shall
ordinarily, in the absence of contingencies, be entitled to vote for the
election of a majority of directors of the Company (even though the right
so to vote has been suspended by the happening of such a contingency) and
(c) any other securities into which or for which any of the securities
described in (a) or (b) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.
(c) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate
or otherwise) that the holder of this Warrant at any time shall be entitled
to receive, or shall have received, on the exercise of this Warrant, in
lieu of or in addition to Common Stock, or that at any time shall be
issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to Section 4 or otherwise.
(d) The term "Market Value" shall mean the average closing price of
the Common Stock during the twenty (20) trading days preceding (but not
excluding) the Exercise Date as reported on any national securities
exchange or automated quotation system on which the Common Stock is then
traded (as reported by Bloomberg L.P.).
1. Exercise of Warrant.
1.1. Method of Exercise. This Warrant may be exercised in whole or in
part (but not as to a fractional share of Common Stock), at any time and
from time to time during the Exercise Period by the Holder hereof by
delivery of a notice of exercise (a "Notice of Exercise") substantially in
the form attached hereto as Exhibit A via facsimile to the Company.
Promptly thereafter the Holder shall surrender this Warrant to the
COMMON STOCK PURCHASE WARRANT NO. 3- Page 2 Warrant 3
(Take-Two Interactive Software, Inc.)
Company at its principal office, accompanied by payment of the Purchase
Price multiplied by the number of shares of Common Stock for which this
Warrant is being exercised (the "Exercise Price"). Payment of the Exercise
Price shall be made, at the option of the Holder, (i) by check or bank
draft payable to the order of the Company, (ii) by wire transfer to the
account of the Company, (iii) in shares of Common Stock having a Market
Value on the Exercise Date (as hereinafter defined) equal to the aggregate
Exercise Price or (iv) by presentation and surrender of this Warrant to the
Company for cashless exercise (a "Cashless Exercise"), with such surrender
being deemed a waiver of the Holder's obligation to pay all or any portion
of the Exercise Price. In the event the Holder elects a Cashless Exercise
(which such election shall be irrevocable) the Holder shall exchange this
Warrant for that number of shares of Common Stock determined by multiplying
the number of shares of Common Stock as to which the Warrant is being
exercised by a fraction, the numerator of which shall be the difference
between the then current Market Value of the issued and outstanding Common
Stock and the Purchase Price, and the denominator of which shall be the
then current Market Value of the issued and outstanding Common Stock. If
the amount of the payment received by the Company is less than the Exercise
Price, the Holder will be notified of the deficiency and shall make payment
in that amount within five (5) business days. In the event the payment
exceeds the Exercise Price, the Company will promptly refund the excess to
the Holder. Upon exercise, the Holder shall be entitled to receive,
promptly after payment in full, one or more certificates, issued in the
Holder's name or in such name or names as the Holder may direct, subject to
the limitations on transfer contained herein, for the number of shares of
Common Stock so purchased. The shares so purchased shall be deemed to be
issued as of the close of business on the date on which the Company shall
have received from the Holder payment in full of the Exercise Price (the
"Exercise Date").
1.2. Regulation D Restrictions. The Holder hereof represents and
warrants to the Company that it has acquired this Warrant and anticipates
acquiring the shares of Common Stock issuable upon exercise of the Warrant
solely for its own account for investment purposes and not with a view to
or for resale of such securities unless such resale has been registered
with the Securities and Exchange Commission or an applicable exemption is
available therefor. At the time this Warrant is exercised, the Company may
require the Holder to state in the Notice of Exercise such representations
concerning the Holder as are necessary or appropriate to assure compliance
by the Holder with the Securities Act.
1.3. Company Acknowledgment. The Company will, at the time of the
exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing its continuing obligation to afford to the Holder
any rights to which the Holder shall continue to be entitled after such
exercise in accordance with the provisions of this Warrant. If the Holder
shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to the Holder any such
rights.
COMMON STOCK PURCHASE WARRANT NO. 3- Page 3 Warrant 3
(Take-Two Interactive Software, Inc.)
1.4. Limitation on Exercise. Notwithstanding the rights of the Holder
to exercise all or a portion of this Warrant as described herein, such
exercise rights shall be limited solely in the manner set forth in the
Purchase Agreement as if such provisions were specifically set forth
herein.
2. Delivery of Stock Certificates, etc., on Exercise. As soon as practicable
after the exercise of this Warrant, and in any event within the time periods
specified in the Purchase Agreement, the Company at its expense (including the
payment by it of any applicable issue, stamp or transfer taxes upon issuance to
the Holder) will cause to be issued in the name of and delivered to the Holder
thereof, or, to the extent permissible hereunder, to such other person as the
Holder may direct, a certificate or certificates for the number of fully paid
and nonassessable shares of Common Stock (or Other Securities) to which the
Holder shall be entitled on such exercise, plus, in lieu of any fractional share
to which the Holder would otherwise be entitled, cash equal to such fraction
multiplied by the then applicable Purchase Price, together with any other stock
or other securities and property (including cash, where applicable) to which the
Holder is entitled upon such exercise pursuant to Section 1 or otherwise.
3. Adjustment for Extraordinary Events. The Purchase Price to be paid by the
Holder upon exercise of this Warrant shall be adjusted in case at any time or
from time to time the Company should (i) subdivide the outstanding shares of
Common Stock into a greater number of shares, (ii) consolidate the outstanding
shares of Common Stock into a smaller number of shares, (iii) issue shares of
Common Stock or securities convertible into or exchangeable for shares of Common
Stock as a dividend to all or substantially all holders of shares of Common
Stock or (iv) issue by reclassification of shares of Common Stock, any shares of
capital stock of the Company, in each event pursuant to Article X of the
Purchase Agreement as if such provisions were specifically set forth herein.
4. Exercise Price Reset.
4.1 Adjustment to Purchase Price if Additional Grant Shares are
Issued. If the Company is obligated to issue any Additional Grant Shares
(as defined in the Purchase Agreement), the Purchase Price shall be
adjusted so that this Warrant will have a "value" equal to the "value" of
this Warrant as of its original date of issue. For the purposes of this
Section 4, the term "value" shall mean a good faith valuation of the
theoretical trade price of this Warrant, prepared by HW Partners, L.P. (or
such other entity as designated by the Holder) using a Black-Scholes or
similar model and using as the "market price" for such model the market
Price (as defined in the Purchase Agreement) used to determine the number
of Additional Grant Shares.
4.2 Notice of Warrant Value. Within seven (7) business days after the
Closing Date (as such term is defined in the Purchase Agreement), HW
Partners, L.P. will deliver to the Company a certificate describing in
reasonable detail the calculation of the value of this Warrant. Within
seven (7) business days after the date on which the number of Additional
Grant Shares is calculated (if any), HW Partners, L.P. will deliver to the
COMMON STOCK PURCHASE WARRANT NO. 3- Page 4 Warrant 3
(Take-Two Interactive Software, Inc.)
Company a certificate indicating in reasonable detail, (1) its calculation
of the value of this Warrant as of such date and (2) its determination of
the new Purchase Price for this Warrant as of such date. If there is no
dispute as to the adjustment to the Purchase Price, the Company shall cause
its auditors to deliver a notice of adjustment pursuant to Section 9 of
this Warrant as promptly as practicable (but within ten (10) business
days.).
4.3 Dispute as to Warrant Value. In the event that the Company
disputes any calculation of Warrant value under this Section 4, the matter
shall be referred to an Independent Financial Expert for final
determination; provided that the Company notifies HW Partners, L.P. of such
dispute within five (5) business days of written receipt of any certificate
of Warrant value. For purposes of this Section 4.3, an Independent
Financial Expert shall mean a nationally recognized investment banking firm
(i) which does not (and whose directors, officers and employees and
affiliates do not), have a direct or indirect financial interest in either
the Company or any holder of this Warrant (other than a beneficial
ownership, directly or indirectly, of less than one percent of the
outstanding shares of capital stock of the Company), (ii) which has not
been, and, at the time it is called upon to give independent financial
services to the Company, is not (and none of whose directors, officers,
employees or affiliates is) a promoter, director or officer of the Company
or any of its affiliates or an underwriter with respect to any of the
Company's securities, (iii) which does not provide any advice or opinions
to the Company or any Warrant holder except as an Independent Financial
Expert and (iv) which is mutually agreeable to the Company and the holders
of a majority of the Warrants. If the Company and the holders of a majority
of the Warrants do not promptly agree as to the Independent Financial
Expert, each shall appoint one investment banking firm and the two firms so
appointed shall select the Independent financial Expert to be employed by
the Company. An Independent Financial Expert shall be compensated by the
Company for opinions or services it provides as an Independent Financial
Expert. In making its determination of the value of this Warrant, the
Independent Financial Expert shall use one or more valuation methods that
the Independent Financial Expert, in its professional judgment, determines
to be most appropriate. After the Independent Financial Expert has made its
determination, the Company shall cause the Independent Financial Expert to
prepare a report (a "Value Report") stating the methods of valuation
considered or used and the value of the Warrant or other security it values
and containing a statement as to the nature and scope of the examination
made. Such Value Report shall accompany any notice of adjustment sent by
the Company to the Holder pursuant to this Warrant; provided, that the
adjustment to the Exercise Price that is the subject of such notice
requires the services of any Independent Financial Expert.
5. No Impairment. The Company will not, by amendment of 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 action as may be
COMMON STOCK PURCHASE WARRANT NO. 3- Page 5 Warrant 3
(Take-Two Interactive Software, Inc.)
necessary or appropriate in order to protect the rights of the Holder of this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock
receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, (b) will 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 stock on the exercise of this Warrant and (c) will not
transfer all or substantially all of its properties and assets to any other
person (corporate or otherwise), or consolidate with or merge into any other
person or permit any such person to consolidate with or merge into the Company
(if the Company is not the surviving person), unless such other person shall
expressly assume in writing and will be bound by all the terms of this Warrant.
6. Accountants' Certificate as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock (or Other Securities)
or the Purchase Price issuable on the exercise of this Warrant, the Company at
its expense will cause independent certified public accountants of national
standing selected by the Company (which may be the Company's auditors) to
compute such adjustment or readjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment is
based, including a statement of (a) the consideration received or receivable by
the Company for any additional shares of Common Stock (or Other Securities)
issued or sold or deemed to have been issued or sold, (b) the number of shares
of Common Stock (or Other Securities) outstanding or deemed to be outstanding
and (c) the Purchase Price and the number of shares of Common Stock to be
received upon exercise of this Warrant, in effect immediately prior to such
issue or sale and as adjusted and readjusted as provided in this Warrant. The
Company will forthwith mail a copy of each such certificate to the Holder of
this Warrant, and will, on the written request at any time of the Holder of this
Warrant, furnish to the Holder a like certificate setting forth the Purchase
Price at the time in effect and showing how it was calculated.
7. Notices of Record Date, etc. In the event of
(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right,
or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all
or substantially all the assets of the Company to, or consolidation or
merger of the Company with or into, any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
COMMON STOCK PURCHASE WARRANT NO. 3- Page 6 Warrant 3
(Take-Two Interactive Software, Inc.)
then, and in each such event, the Company will mail or cause to be mailed to the
Holder of this Warrant a notice specifying (i) the date on which any such record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, and
(ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any, as of which the holders of
record of Common Stock (or Other Securities) shall be entitled to exchange their
shares of Common Stock (or Other Securities) for securities or other property
deliverable on such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up. Such
notice shall be mailed at least 20 days prior to the date specified in such
notice on which any action is to be taken.
8. Reservation of Stock, etc. Issuable on Exercise of Warrant. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of this Warrant, all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of this Warrant.
9. Exchange of Warrant. On surrender for exchange of this Warrant, properly
endorsed, to the Company, the Company at its expense will issue and deliver to
or on the order of the holder thereof a new Warrant of like tenor, in the name
of such Holder or as such Holder (on payment by such holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face of the
Warrant so surrendered.
10. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
11. Remedies. The Company stipulates that the remedies at law of the Holder
of this Warrant in the event of any default by the Company in the performance of
or compliance with any of the terms of this Warrant are not and will not be
adequate, and that such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.
12. Negotiability, etc. This Warrant is issued upon the following terms, to
all of which each Holder or owner hereof by the taking hereof consents and
agrees:
(a) title to this Warrant may be transferred by endorsement (by the
Holder hereof executing the form of assignment at the end hereof) and
delivery in the same manner as in the case of a negotiable instrument
transferable by endorsement and delivery;
COMMON STOCK PURCHASE WARRANT NO. 3- Page 7 Warrant 3
(Take-Two Interactive Software, Inc.)
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered
to transfer absolute title hereto by endorsement and delivery hereof to a
bona fide purchaser hereof for value; each prior taker or owner waives and
renounces all of his equities or rights in this Warrant in favor of each
such bona fide purchaser, and each such bona fide purchaser shall acquire
absolute title hereto and to all rights represented hereby;
(c) until this Warrant is transferred on the books of the Company, the
Company may treat the registered Holder hereof as the absolute owner hereof
for all purposes, notwithstanding any notice to the contrary; and
(d) notwithstanding the foregoing, this Warrant may not be sold,
transferred or assigned except pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the "Act"), or,
pursuant to an applicable exemption therefrom (including in accordance with
Regulation D promulgated under the Act).
13. Registration Rights. The Company is obligated to register the shares of
Common Stock issuable upon exercise of this Warrant in accordance with the terms
of a Registration Rights Agreement between the Company and the Holder dated the
date hereof.
14. Notices, etc. All notices and other communications from the Company to
the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by the Holder or, until any the Holder furnishes to the
Company an address, then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.
15. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in accordance with and
governed by the internal laws of the State of New York, except where the Texas
Business Corporation Act or other law applies. The headings in this Warrant are
for purposes of reference only, and shall not limit or otherwise affect any of
the terms hereof. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision.
COMMON STOCK PURCHASE WARRANT NO. 3- Page 8 Warrant 3
(Take-Two Interactive Software, Inc.)
DATED as of October 14, 1997.
TAKE-TWO INTERACTIVE SOFTWARE, INC.
By: /s/ Xxxx Xxxxx
------------------------------
Name: Xxxx Xxxxx
------------------------------
Title: CEO
------------------------------
COMMON STOCK PURCHASE WARRANT NO. 3- Page 9 Warrant 3
(Take-Two Interactive Software, Inc.)
EXHIBIT A
FORM OF NOTICE OF EXERCISE - WARRANT
(To be executed only upon exercise or conversion
of the Warrant in whole or in part)
To Take-Two Interactive Software, Inc.
The undersigned registered holder of the accompanying Warrant hereby
exercises such Warrant or portion thereof for, and purchases thereunder,
______________1 shares of Common Stock (as defined in such Warrant) and herewith
makes payment therefor in the amount and manner set forth below, as of the date
written below. The undersigned requests that the certificates for such shares of
Common Stock be issued in the name of, and delivered to, _______________________
_________________________________ whose address is _____________________________
______________________________________________.
The Exercise Price is paid as follows:
|_| Bank draft payable to the Company in the amount of $__________.
|_| Wire transfer to the account of the Company in the amount of
$________.
|_| Delivery of ___________ previously held shares having an aggregate
Market Value of $_________.
|_| Cashless exercise. Surrender of __________ shares purchasable under
this Warrant for such shares of Common Stock issuable in exchange
therefor pursuant to the Cashless Exercise provisions of the within
Warrant, as provided in Section 1.1(iv) thereto.
Upon exercise pursuant to this Notice of Exercise, the holder will be in
compliance with the Limitation on Exercise (as defined in the Securities
Purchase Agreement pursuant to which this Warrant was issued).
Dated: ____________________
_________________________________________________
(Name must conform to name of holder as specified
on the face of the Warrant)
By:______________________________________________
Name:_________________________________________
Title:________________________________________
Address of holder:
_________________________________________________
_________________________________________________
_________________________________________________
Date of exercise: __________________________
--------
1 Insert the number of shares of Common Stock as to which the accompanying
Warrant is being exercised. In the case of a partial exercise, a new
Warrant or Warrants will be issued and delivered, representing the
unexercised portion of the accompanying Warrant, to the holder surrendering
the same.
