EXHIBIT (4)(e)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS
OF ANY OTHER JURISDICTION AND HAS BEEN SOLD IN RELIANCE UPON
EXEMPTIONS THEREUNDER. THE SALE, PLEDGE OR OTHER TRANSFER OF
THIS SECURITY IS RESTRICTED IN ACCORDANCE WITH THE SECURITIES ACT
AND SUCH SECURITIES LAWS. THE HOLDER OF THIS SECURITY AGREES
THAT THIS SECURITY MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (1) TO XXXXXXX GAMING & ENTERTAINMENT, INC.
(2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES
LAWS, OR (3) IN COMPLIANCE WITH OR PURSUANT TO EXEMPTIONS FROM
THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF THE SECURITIES
ACT AND SECURITIES LAWS OF ANY STATE.
WARRANT
to Purchase Common Stock of
XXXXXXX GAMING & ENTERTAINMENT, INC.
No. __
THIS IS TO CERTIFY THAT, for value received, ________
____________________ is entitled to purchase from XXXXXXX GAMING
& ENTERTAINMENT, INC., a corporation organized under the laws of
the State of Delaware (the "Company"), at any time or from time
to time following the date hereof and prior to 5:00 p.m. (New
York City time) on May 3, 1998 (the "Expiration Date") at the
Warrant Office (as defined in Section 2.1), at the exercise price
stated in Section 1.6 (the "Exercise Price"), _______ duly
authorized, validly issued, fully paid and nonassessable shares
of Common Stock (as defined in Section 3.1(a)) and is entitled
also to exercise the other appurtenant rights, powers and
privileges hereinafter set forth.
ARTICLE I
Exercise of Warrants
1.1 Method of Exercise. To exercise this Warrant in
whole or in part, the holder hereof shall deliver to the Company,
at any time or from time to time following the date hereof and
prior to 5:00 p.m. (New York City time) on the Expiration Date at
the Warrant Office, (a) a written notice, in substantially the
form of the Subscription Notice attached as Schedule A hereto, of
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such holder's election to exercise this Warrant, which notice
shall specify the number of shares of Common Stock to be
purchased, (b) a bank or certified check in an amount equal to
the payment of the aggregate Exercise Price for the number of
shares of Common Stock being purchased and (c) this Warrant. The
Company shall, as promptly as practicable and in any event within
14 days thereafter, execute and deliver or cause to be executed
and delivered, in accordance with said notice, a certificate or
certificates representing the aggregate number of shares of
Common Stock specified in said notice. The stock certificate or
certificates so delivered shall be in denominations as may be
specified in said notice and shall be issued in the name of such
holder or such other name as shall be designated in said notice.
Such certificate or certificates shall be deemed to have been
issued, and such holder or holders or any other person so
designated to be named therein shall be deemed for all purposes
to have become the holder of record of such shares of Common
Stock, as of the date said notice, payment and Warrant is
received by the Company as aforesaid. If this Warrant shall have
been exercised only in part, the Company shall, upon surrender of
this Warrant, at the time of delivery of said certificate or
certificates, deliver to such holder a new Warrant evidencing the
rights of such holder to purchase the remaining shares of Common
Stock subject to this Warrant, which new Warrant shall in all
other respects be identical with this Warrant, or, at the request
of such holder, appropriate notation may be made on this Warrant
and the same returned to such holder. The Company shall pay all
expenses, taxes and other charges payable in connection with the
preparation, issuance and delivery of such stock certificates or
new Warrants, except that the holder hereof shall (i) pay and
satisfy (or deliver funds to the Company in an amount sufficient
to pay and satisfy) all stock transfer taxes which shall be
payable upon the issuance of such stock certificate or
certificates, if such stock certificates shall be registered in a
name or names other than the name of the holder hereof, and (ii)
pay and satisfy (or deliver funds to the Company in an amount
sufficient to pay and satisfy) any federal, state or local
withholding taxes payable in connection with the issuance of
shares of Common Stock hereunder.
1.2 Warrant Shares to be Fully Paid and Nonassessable.
All shares of Common Stock issued upon the exercise of this
Warrant (the "Warrant Shares") shall be validly issued, fully
paid and nonassessable.
1.3 Fractional Shares. Upon any exercise of this
Warrant, the Company shall not issue a certificate representing
any fraction of a share of Common Stock. In lieu of such
issuance, the Company shall pay to the holder of this Warrant
cash in an amount equal to the Current Market Value of a share of
Common Stock (as defined in Section 3.1(a)) multiplied by such
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fraction.
1.4 Legend on Warrant Shares. Each certificate for
Warrant Shares shall bear a legend substantially as follows:
THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED("THE SECURITIES ACT"), OR THE SECURITIES LAWS
OF ANY OTHER JURISDICTION AND HAVE BEEN SOLD IN
RELIANCE UPON EXEMPTIONS THEREUNDER. THE SALE, PLEDGE
OR OTHER TRANSFER OF SUCH SECURITIES IS RESTRICTED IN
ACCORDANCE WITH THE SECURITIES ACT AND SUCH SECURITIES
LAWS. THE HOLDER HEREOF AGREES THAT THESE SECURITIES
MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (1) TO THE COMPANY, (2) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND IN
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, OR
(3) IN COMPLIANCE WITH OR PURSUANT TO EXEMPTIONS FROM
THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
Any certificate issued at any time in exchange or
substitution for any certificate bearing such legends (except a
new certificate issued upon completion of a public distribution
pursuant to a registration statement under the Securities Act of
securities represented thereby) also shall bear such legends
unless, in the case of the legend regarding registration under
the Securities Act, in the opinion of counsel reasonably
acceptable to the Company, the securities represented thereby no
longer require such legend.
1.5 Acknowledgment of Continuing Obligation. The
Company will, at the time of any exercise of this Warrant in
whole or in part, upon reasonable request of the holder hereof,
acknowledge in writing its continuing obligation to the holder
hereof in respect of any rights to which the holder shall
continue to be entitled after such exercise in accordance with
this Warrant; provided, however, that the failure of the holder
hereof to make any such request shall not affect the continuing
obligation of the Company to the holder in respect of such
rights.
1.6 Exercise Price. The price per share at which each
share of Common Stock will be purchased upon exercise of this
Warrant shall be $6 per share, subject to adjustment pursuant to
ARTICLE III.
ARTICLE II
Warrant Office; Transfer,
Division or Combination of Warrants
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2.1 Warrant Office. The Company shall maintain an
office for certain purposes specified herein (the "Warrant
Office"), which office shall initially be the Company's office at
0000 Xxxxxxxxx, Xxxxxxxx Xxxx, Xxx Xxxxxx 00000 and may
subsequently be such other office of the Company or of any
transfer agent of the Common Stock as to which written notice has
previously been given to all the holders of Warrants.
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 anyone other than the
Company) for all purposes and shall not be affected by any notice
to contrary.
2.3 Transfer of Warrants. The Company agrees to
maintain at the Warrant Office books for the registration of
transfer of the Warrants.
ARTICLE III
Anti-Dilution Provisions
3.1 Mandatory Adjustments. (a) In addition to the
terms defined elsewhere in this Warrant, as used in this Warrant,
the following terms have the following meanings:
"Additional Shares of Common Stock" means all shares of
Common Stock issued subsequent to the Effective Date other than
(A) shares issued upon exercise of the Warrants and (B) any
shares of Common Stock issued in connection with any Convertible
Securities, warrants or options granted after the Effective Date
which have an exercise or conversion price per share equal to or
greater than the Current Market Value on the date they are
granted.
"Capitalized Lease" means, with respect to any Person,
any lease or any other agreement with respect to the use of
property that, in accordance with GAAP, should be capitalized on
the lessee's or user's balance sheet.
"Capitalized Lease Obligation" of any person means, as
of any date as of which the amount thereof is to be determined,
the amount of the liability capitalized in respect of a
Capitalized Lease of such Person.
"Common Stock" means the common stock, par value $.01
per share, of the Company as constituted on July 1, 1995 and any
capital stock into which such common stock thereafter may be
changed on one or more occasions as a result of a stock split,
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stock dividend or combination or reclassification of shares, or
through a merger, consolidation, reorganization or
recapitalization, or by any other means, and in addition to such
common stock also includes capital stock of the Company of any
other class that is not preferred as to dividends or assets over
any other class of capital stock of the Company and that is not
subject to redemption; provided, however, that the shares of
Common Stock receivable upon exercise of the Warrants shall
include only shares designated as Common Stock on July 1, 1995;
and provided, further, however, that "Common Stock" shall not
include shares of the Company's Class B Redeemable Common Stock,
par value $.01 per share.
"Convertible Securities" means Indebtedness, shares of
stock or other securities that, with or without payment of
additional consideration in cash or property, are convertible
into or exchangeable for Additional Shares of Common Stock,
either immediately or upon the arrival of a specified date or the
happening of a specified event.
"Current Market Value" of a share of Common Stock
means, for each trading day: (A) the closing price for Common
Stock as reported on the American Stock Exchange; (B) if the
Common Stock is not listed on the American Stock Exchange, the
closing price as reported on the principal national securities
exchange on which the Common Stock is listed; (C) if the Common
Stock is not listed on any national securities exchange, the
closing price in the over-the-counter market as reported on the
NASDAQ/National Market System; or (D) if no such closing price is
available, the fair market value as determined in good faith by
the Board of Directors of the Company.
"Current Warrant Price" per share of Common Stock, as
of any date, means the amount equal to the quotient resulting
from dividing the Exercise Price per Stock Unit in effect on such
date by the number of shares (including any fractional share) of
Common Stock comprising a Stock Unit on such date.
"Indebtedness" of any Person means, as of any date as
of which the amount thereof is to be determined, (i) all
obligations of such Person that, in accordance with generally
accepted accounting principles, would be classified on a balance
sheet of such Person as debt or indebtedness, including all
obligations of such Person in respect of borrowed money or
evidenced by bonds, debentures, notes or other evidences of
indebtedness, and (ii) in addition (A) all obligations that are
secured by any Lien existing on property owned by such Person
whether or not the obligations secured thereby shall have been
assumed by such Person, (B) all Capitalized Lease Obligations of
such Person, (C) all obligations of such Person to purchase any
materials, supplies or other property, or to obtain the services
of any Person, if the relevant contract or other related document
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requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of
whether or not delivery of such materials, supplies or other
property is ever made or tendered or such services are ever
performed or tendered, (D) all obligations of such Person to
advance or supply funds to, or to purchase property or services
from, any other Person in order to maintain the working capital,
net worth or any other balance sheet condition of such other
Person or to pay debts dividends or expenses of such other Person
or to assure such other Person or any third party against any
liability or loss and (E) guarantees, endorsements and other
contingent obligations, direct or indirect, on the part of such
Person (other than endorsement of negotiable instruments for
collection in the ordinary course of business) for the payment,
discharge or satisfaction of Indebtedness of others to pay the
same or to the owners of such indebtedness of others of the
character described above, including any agreement, contingent or
otherwise, to (x) purchase such indebtedness of others, (y)
purchase or sell property or services primarily to permit the
debtor in respect of such indebtedness of others to pay the same
or the owner of such Indebtedness of others to avoid loss or (z)
supply funds to or invest in any such debtor.
"Lien" means: (i) any interest in property (whether
real, personal or mixed and whether tangible or intangible) that
secures an obligation owed to, or a claim by, a Person other than
the owner of such property, whether such interest is based on the
common law, statute or contract, including without limitation any
such interest arising from a Capitalized Lease, arising from a
mortgage, charge, pledge, security agreement, conditional sale or
trust receipt, arising by way of the right of set-off, or deposit
in trust, or arising from a lease, consignment or bailment given
for security purposes; (ii) any encumbrances upon such property
that does not secure such an obligation; and (iii) any exception
to or defect in the title to or ownership interest in such
property, including without limitation reservations, rights of
entry, possibilities of reverter, encroachments, easements, right
of way, restrictive covenants, leases, licenses and profits a
prendre.
"Person" includes an individual, a corporation, an
association, a partnership, a trust or estate, a government and
any agency or political subdivision thereof or any other entity.
"Stock Unit" means one share of Common Stock until the
occurrence of any adjustment specified in this Section 3.1 and
thereafter means such other number of shares of Common Stock as
may result from any one or more of such adjustments.
"Warrants" means the warrants, of which this Warrant is
one, to purchase up to an aggregate of 4,666,850 shares of Common
Stock which were originally issued by the Company on May 3, 1994,
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and subsequently reduced by a one-for-five reverse stock split
effective June 30, 1995. The owners of the remaining Warrants
#__ and #__ are _____________________ (_______ shares) and
_______________________ (_______ shares), respectively.
(b) If at any time or from time to time the Company
shall (i) take a record of the holders of the Common Stock for
the purpose of entitling them to receive a dividend payable in,
or other distribution of, shares of Common Stock, (ii) subdivide
the outstanding shares of Common Stock into a larger number of
shares of Common Stock or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares of Common Stock then
the number of shares of Common Stock thereafter constituting a
Stock Unit shall be adjusted so as to consist of the same number
of shares that a record holder of the number of shares of Common
Stock constituting a Stock Unit immediately prior to the
happening of such event would own or be entitled to receive after
the happening of such event.
(c) If at any time or from time to time the Company
shall take a record of the holders of the Common Stock for the
purpose of entitling them to receive any dividend or other
distribution of (i) any evidence of Indebtedness (other than
Convertible Securities), (ii) any share of its capital stock
(other than Convertible Securities or Additional Shares of Common
Stock) or any other securities or property (other than cash) or
(iii) any warrant or other right to subscribe for or purchase any
Indebtedness (other than Convertible Securities), any shares of
its capital stock (other than Convertible Securities or
Additional Shares of Common Stock) or any other securities or
property, then the number of shares of Common Stock thereafter
constituting a Stock Unit shall be adjusted to that number
determined by multiplying the number of shares of Common Stock
constituting a Stock Unit immediately prior to such adjustment by
a fraction the numerator of which is the Current Market Value of
a share of Common Stock at such record date and the denominator
of which is the Current Market Value of a share of Common Stock
less the portion of any such cash so distributable and of the
value of such Indebtedness, shares of capital stock, other
securities or property or warrants or other subscription or
purchase rights so distributable that are applicable to one share
of Common Stock. A reclassification of the Common Stock into
shares of Common Stock and shares of any other class of capital
stock shall be deemed a distribution by the Company to the
holders of the Common Stock of such shares of such other class of
capital stock within the meaning of this Section 3.1(c) and, if
the outstanding shares of Common Stock shall be changed into a
larger or smaller number of shares of Common Stock as part of
such reclassification, shall be deemed a subdivision or
combination, as the case may be, of the outstanding shares of
Common Stock within the meaning of Section 3.1(b).
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(d) If at any time or from time to time, except as
provided in this Section 3.1(d), the Company shall issue or sell
any Additional Shares of Common Stock for a consideration per
share less than the Current Market Value per share of Common
Stock, then the number of shares of Common Stock thereafter
constituting a Stock Unit shall be adjusted to that number
determined by multiplying the number of shares of Common Stock
constituting a Stock Unit immediately prior to such adjustment by
a fraction (i) the numerator of which is the number of shares of
Common Stock outstanding immediately prior to the issuance of
such Additional Shares of Common Stock, plus the number of
Additional Shares of Common Stock deemed to be outstanding
pursuant to Sections 3.1(e) and 3.1(f) immediately prior to the
issuance of Additional Shares of Common Stock as contemplated by
this section 3.1(d) plus the number of such Additional Shares of
Common Stock intended to be issued or sold as contemplated by
this Section 3.1(D) (without giving effect to the adjustment then
being made) and (ii) the denominator of which is the number of
shares of Common Stock outstanding immediately prior to the
issuance of such Additional Shares of Common Stock, plus the
number of Additional Shares of Common Stock deemed to be
outstanding pursuant to Sections 3.1(e) and 3.1(f) immediately
prior to the issuance of Additional Shares of Common Stock as
contemplated by this Section 3.1(d), plus the number of shares of
Common Stock that the aggregate consideration for the total
number of such Additional Shares of Common Stock intended to be
issued or sold as contemplated by this Section 3.1(d) (without
giving effect to the adjustment then being made) would purchase
at such Current Market Value. For the purposes of this Section
3.1(d), the date as of which the Current Market Value and the
Exercise Price per share of Common Stock shall be computed shall
be the earlier of the date on which the Company enters into a
firm contract for the issuance of such Additional Shares of
Common Stock or the date of actual issuance of such Additional
Shares of Common Stock. The provisions of this Section 3.1(d)
shall not apply to any issuance of Additional Shares of Common
Stock for which an adjustment is provided under Section 3.1(b).
No adjustment of the number of shares of Common Stock
constituting a Stock Unit shall be made under this Section 3.1(d)
upon the issuance of any Additional Shares of Common Stock that
are issued pursuant to the exercise of any warrants or other
subscription or purchase rights or pursuant to the exercise of
any conversion or exchange rights in any Convertible Securities,
if any such adjustment previously shall have been made upon the
issuance of such warrants or other rights or upon the issuance of
such Convertible Securities (or upon the issuance of any warrant
or other rights therefor) pursuant to Sections 3.1(e) or 3.1(f).
(e) If at any time or from time to time the Company
shall take a record of the holders of the Common Stock for the
purpose of entitling them to receive a distribution of, or in any
manner (whether directly or by assumption in a merger in which
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the Company is the surviving corporation and in which the
shareholders of the Company immediately prior to the merger
continue to own at least 51% of the Common Stock outstanding
immediately after the merger or otherwise) shall issue or sell
any warrants or other rights to subscribe for or purchase any
Additional Shares of Common Stock or any Convertible Securities,
whether or not the rights to exercise, exchange or convert
thereunder are immediately exercisable, and the consideration per
share for which Additional Shares of Common Stock at any time
thereafter may be issuable pursuant to the terms of such
Convertible Securities shall be less than the Current Market
Value per share of Common Stock, then the number of shares of
Common Stock thereafter constituting a Stock Unit shall be
adjusted as provided in Section 3.1(d) on the basis that (i) the
maximum number of Additional Shares of Common Stock issuable
pursuant to all such warrants or other rights or necessary to
effect the conversion or exchange of all such Convertible
Securities shall be deemed to have been issued and outstanding as
of the date of the determination of the Current Market Value per
share of Common Stock as hereinafter provided, and (ii) the
aggregate consideration for such maximum number of Additional
Shares of Common Stock shall be deemed to be the minimum
consideration received or receivable by the Company for the
issuance of such Additional Shares of Common Stock pursuant to
the terms of such warrants, right or Convertible Securities. For
the purposes of this Section 3.1(e), the date as of which the
Current Market Value per share of Common Stock shall be computed
shall be the earliest of (x) the date on which the Company shall
take a record of the holders of the Common Stock for the purpose
of entitling them to receive any such warrants or other rights,
(y) the date on which the Company shall enter into a firm
contract for the issuance of such warrants or other rights and
(z) the date of actual issuance of such warrants or other rights.
(f) If at any time or from time to time the Company
shall take a record of the holders of Common Stock for the
purpose of entitling them to receive a distribution of, or shall
in any manner (whether directly or by assumption in a merger in
which the Company is the surviving corporation and in which the
shareholders of the Company immediately prior to the merger
continue to own at least 51% of the Common Stock outstanding
immediately after the merger or otherwise) issue or sell, any
Convertible Securities, whether or not the rights to exchange or
convert thereunder are immediately exercisable, and the
consideration per share for which Additional Shares of Common
Stock may at any time thereafter be issuable pursuant to the
terms of such Convertible Securities shall be less than the
Current Market Value per share of Common Stock, then the number
of shares of Common Stock thereafter constituting a Stock Unit
shall be adjusted as provided in Section 3.1(d) on the basis that
(i) the maximum number of Additional Shares of Common Stock
necessary to effect the conversion or exchange of all such
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Convertible Securities shall be deemed to have been issued and
outstanding as of the date for the determination of the Current
Market Value per share of Common Stock as hereinafter provided
and (ii) the aggregate consideration for such maximum number of
Additional Shares of Common Stock shall be deemed to be the
minimum consideration received or receivable by the Company for
the issuance of such Additional Shares of Common Stock pursuant
to the terms of such Convertible Securities. For the purposes of
this Section 3.1(f), the date as of which the Current Market
Value per share of Common Stock shall be computed shall be the
earliest of (x) the date on which the Company shall take a record
of the holders of Common Stock for the purpose of entitling them
to receive any such Convertible Securities, (y) the date on which
the Company shall enter into a firm contract for the issuance of
such Convertible Securities and (z) the date of actual issuance
of such Convertible Securities. No adjustment of the number of
shares of Common Stock constituting a Stock Unit shall be made
under this Section 3.1(f) upon the issuance of any Convertible
Securities that are issued pursuant to the exercise of any
warrants or other subscription or purchase rights therefor, if
any such adjustment shall previously have been made upon the
issuance of such warrants or other rights pursuant to Section
3.1(e).
(g) If, at any time after any adjustment of the number
of shares of Common Stock constituting a Stock Unit shall have
been made pursuant to Section 3.1(e) or 3.1(f) on the basis of
the issuance of warrants or other rights or the issuance of
Convertible Securities, or after any new adjustments of the
number of shares of Common Stock constituting a Stock Unit shall
have been made pursuant to this Section 3.1(g): (i) such
warrants or rights or the right of conversion or exchange under
such Convertible Securities shall expire in whole or in part and
a portion of such warrants or rights, or the right of conversion
or exchange in respect of a portion of such Convertible
Securities, as the case may be, shall not have been exercised,
or, (ii) the consideration per share, for which shares of Common
Stock are issuable pursuant to such warrants or rights or the
terms of such Convertible Securities, shall be increased solely
by virtue of provisions therein contained for an automatic
increase in such consideration per share upon the arrival of a
specified date or the happening of a specified event, such
previous adjustment shall be rescinded and annulled and the
Additional Shares of Common Stock that were deemed to have been
issued by virtue of the computation made in connection with the
adjustment so rescinded and annulled, shall no longer be deemed
to have been issued by virtue of such computation. Thereupon, a
recomputation shall be made of the effect of such rights or
options or Convertible Securities on the basis of (i) treating
the number of Additional Shares of Common Stock, if any,
theretofore actually issued or issuable pursuant to the previous
exercise of such warrants or rights or such right of conversion
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or exchange under such Convertible Securities, as having been
issued on the date or dates of such original adjustment and on
the exact terms on which the original adjustment was made, and
(ii) treating any such warrants or rights or any such Convertible
Securities that then remain outstanding and exercisable,
exchangeable or convertible into Additional Shares of Common
Stock as having been granted or issued immediately after the time
of such increase of the consideration per share for which shares
of Common Stock are issuable under such warrants or rights or
Convertible Securities; and, if and to the extent called for by
the foregoing provisions of this Section 3.1(g) on the basis
aforesaid, a new adjustment of the number of shares of Common
Stock constituting a Stock Unit shall be made, which new
adjustment shall supersede the previous adjustment so rescinded
and annulled.
(h) The following provision shall be applicable to the
making of adjustments of the number of shares of Common Stock
constituting a Stock Unit provided for in this Section 3.1:
(i) The sale or other disposition of any issued
shares of Common Stock owned or held by or for the account of the
Company shall be deemed an issuance thereof for the purposes of
this Section 3.1.
(ii) To the extent that any Additional Shares of
Common Stock or any Convertible Securities or any warrants or
other rights to subscribe for or purchase any Additional Shares
of Common Stock or any Convertible Securities shall be issued for
a cash consideration, the consideration received by the Company
therefor shall be deemed to be the amount of the cash received or
receivable by the Company therefor or, if such Additional Shares
of Common Stock or Convertible Securities are offered by the
Company for subscription, the subscription price or, if such
Additional Shares of Common Stock or Convertible Securities are
sold to underwriters or dealers for public offering without a
subscription offering, the initial public offering price, in any
such case excluding any amounts paid or receivable for accrued
interest or accrued dividends, or otherwise in connection with,
the issue thereof. To the extent that such issuance shall be for
a consideration other than cash, except as herein otherwise
expressly provided, the amount of such consideration shall be
deemed to be the fair market value of such consideration at the
time of such issuance. In case any Additional Shares of Common
Stock or any Convertible Securities or any warrants or other
rights to subscribe for or purchase such Additional Shares of
Common Stock or Convertible Securities shall be issued in
connection with any merger in which the Company issues any
securities, the amount of consideration therefor shall be deemed
to be the fair market value of such portion of the assets and
business of the nonsurviving corporation as is determined to be
attributable to such Additional Shares of Common Stock,
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Convertible Securities, warrants or other rights, as the case may
be, in good faith by the Board of Directors of the Company. In
the event of any consolidation or merger of the Company in which
the Company is not the surviving corporation or in the event of
any sale of all or substantially all the assets of the Company
for stock or other securities of any corporation, the Company
shall be deemed to have issued a number of Additional Shares of
Common Stock or Convertible Securities of the other corporation
computed on the basis of the actual exchange ratio on which the
transaction was predicated and the consideration received for
such issuance shall be equal to the fair market value on the date
of such transaction, of such stock or securities of the other
corporation, and if any such calculation results in adjustment in
the number of shares of Common Stock comprising a Stock Unit
immediately prior to such merger, consolidation or sale for
purposes of this Section 3.1(h), such merger, consolidation or
sale shall be deemed to have been made after giving effect to
such adjustment. The consideration for Additional Shares of
Common Stock issuable pursuant to any warrants or other rights to
subscribe for or purchase the same shall be the consideration
received by the Company for issuing such warrants or other
rights, plus the additional consideration payable to the Company
upon the exercise of such warrants or other rights. The
consideration for any Additional Shares of Common Stock issuable
pursuant to the terms of any Convertible Securities shall be the
consideration received by the Company for issuing any warrants or
other rights to subscribe for or purchase such Convertible
Securities, plus the consideration paid or payable to the Company
in respect of the subscription for or purchase of such
Convertible Securities, plus the additional consideration, if
any, payable to the Company upon the exercise of the right of
conversion or exchange in such Convertible Securities. In case
of the issuance at any time of any Additional Shares of Common
Stock or Convertible Securities in payment or satisfaction of any
dividends upon any class of capital stock other than Common
Stock, the Company shall be deemed to have received for such
Additional Shares of Common Stock or Convertible Securities a
consideration equal to the amount of such dividend so paid or
satisfied.
(iii) The adjustments required by this Section
3.1 shall be made whenever and as often as any specified event
requiring an adjustment shall occur, except that no adjustment of
the number of shares of Common Stock constituting a Stock Unit
that would otherwise be required shall be made (except in the
case of a subdivision or combination of shares of Common Stock,
as provided for in Section 3.1(b)) unless and until such
adjustment either by itself or with other adjustments not
previously made adds or subtracts at least 1/20th of a share to
or from the number of shares of Common Stock constituting a Stock
Unit immediately prior to the making of such adjustment. Any
adjustment representing a change of less than such minimum amount
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(except as aforesaid) shall be carried forward and made as soon
as such adjustment, together with other adjustments required by
this Section 3.1 and not previously made, would result in a
minimum adjustment. For the purpose of any adjustment, any
specified event shall be deemed to have occurred at the close of
business on the date of its occurrence.
(iv) In computing adjustments under this Section
3.1, fractional interest in Common Stock shall be taken into
account to the nearest one-thousandth of a share.
(v) 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 distribution or subscription or purchase
rights and shall, thereafter and before the distribution to
shareholders thereof, legally abandon its plan to pay or deliver
such dividend, distribution, subscription or purchase rights,
then thereafter no adjustment shall be required by reason of the
taking of such record and any such adjustment previously made in
respect thereof shall be rescinded and annulled.
(i) If the Company shall reorganize its capital,
reclassify its capital stock, merge or consolidate into another
corporation, or sell, transfer or otherwise dispose of all or
substantially all its property, assets or business to another
corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets,
shares of common stock of the successor or acquiring corporation
are to be received by or distributed to the holders of shares of
Common Stock, then the holder shall have the right thereafter to
receive, upon exercise of this Warrant, Stock Units comprising
the number of shares of common stock of the successor or
acquiring corporation receivable, upon or as a result of such
reorganization, reclassification, merger, consolidation or
disposition of assets, by a holder of the number of shares of
Common Stock constituting a Stock Unit immediately prior to such
event. If, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets,
any cash, shares of stock or other securities or property of any
nature whatsoever (including warrants or other subscription or
purchase rights) are to be received by or distributed to the
holders of shares of Common Stock in addition to common stock of
the successor or acquiring corporation, there shall be a
reduction of the Current Warrant Price per Stock Unit in an
amount equal to the amount of any such cash and of the value of
such shares of stock or other securities or property to be
received by or distributed to the holders of shares of Common
Stock applicable to the number of shares of Common Stock then
constituting a Stock Unit. Upon any such reorganization,
reclassification, merger, consolidation or disposition of assets,
the successor or acquiring corporation shall expressly assume the
due and punctual observance and performance of the covenants and
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conditions of this Warrant to be performed and observed by the
Company, subject to such modifications as may be deemed
appropriate (as determined by resolution of the Board of
Directors of the Company)in order to provide for adjustments of
Stock Units which shall be as nearly equivalent as practicable to
the adjustments provided for in this Section 3.1(i). For the
purposes of this Section 3.1(i), "common stock of the successor
or acquiring corporation" shall include stock of such corporation
of any class that is not preferred as to dividends or assets over
any other class of stock of such corporation and that is not
subject to redemption and also shall include any evidences of
indebtedness, shares of stock or other securities that are
convertible into or exchangeable for any such stock, either
immediately or upon the occurrence of a specified date or the
happening of a specified event and any warrant or other right to
subscribe for or purchase any such stock. The foregoing
provision of this Section 3.1(i) similarly shall apply to
successive reorganizations, reclassifications, mergers,
consolidations or dispositions of assets.
(j) If at any time or from time to time the Company
shall take any action affecting the Common Stock, other than an
action described in this Section 3.1, unless in the opinion of
the Board of Directors of the Company such action will not have a
materially adverse effect upon the rights of the holders of
Warrants, the number of shares of Common Stock or other stock
constituting a Stock Unit, or the Current Warrant Priced, shall
be adjusted in such manner and at such time as the Board of
Directors of the Company may determine to be equitable in the
circumstances.
(k) Irrespective of any adjustments of the number or
kind of securities issuable upon exercise of this Warrant or the
Exercise Price, this Warrant may continue to express the same
number of shares of Common Stock and Exercise Price as stated
prior to any such adjustments.
(l) The Company shall make any computation required
under this Section 3.1. If any such computation is challenged by
a holder of Warrants, a "Big Six" accounting firm ("Accounting
Firm") chosen by the Company shall make the computation. The
holder shall bear all costs incurred in connection with the
services of such Accounting Firm unless the calculation made by
the Accounting Firm (i) differs from the Company's calculation by
more than 15% and (ii) such difference is detrimental to the
holder, in which case the Company shall bear all such costs.
(m) Whenever there is an adjustment in the Exercise
Price or in the number or kind of securities constituting a Stock
Unit, as provided in this Section 3.1, the Company shall (i)
promptly file in the custody of its Secretary or Assistant
Secretary a certificate signed by an officer of the Company,
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showing in detail the facts requiring such adjustment and the
number and kind of securities constituting a Stock Unit after
such adjustment, and (ii) cause a copy of such calculation of the
adjustment and a notice stating that such adjustment has been
affected and stating the Exercise Price then in effect and the
number and kind of securities constituting a Stock Unit to be
sent to the holders.
(n) If the Company shall propose (i) to pay a dividend
payable in stock of any class to the holders of shares of Common
Stock or to make any other dividend or distribution to the
holders of shares of Common Stock, (ii) to offer to the holders
of shares of Common Stock rights to subscribe for or to purchase
shares of Common Stock or shares of stock of any class or any
other securities, or rights or options convertible into or
exchangeable for shares of Common Stock, (iii) to affect any
reclassification of the Common Stock (other than a
reclassification involving only the subdivision or combination of
outstanding shares of Common Stock), (iv) to effect any capital
reorganization, (v) to effect any consolidation, merger or sale,
transfer or other disposition of all or substantially all of its
property, assets or business or (vi) to effect the liquidation,
dissolution or winding up of the Company, the Company will give
notice, at lest ten days prior to the relevant record date for
determining holders entitled to vote on any such transaction or
to receive any such dividend or distribution, of such proposed
action to the holder of this warrant specifying the date on which
a record is to be taken for the purposes of such stock dividend,
distribution or rights, or the date on which such
reclassification, reorganization, consolidation, merger, sale,
transfer, disposition, liquidation, dissolution or winding up is
to take place and the date of participation therein by the
holders of shares of Common Stock, if any such date is to be
fixed, and setting forth such facts with respect thereto as shall
be reasonably necessary to indicate the effect of such action on
the Common Stock and the number and kind of any other shares of
stock that will constitute a Stock Unit, and the Exercise Price,
after giving effect to any adjustment that will be required as a
result of such action.
3.2 Voluntary Adjustment by the Company. The Company
may at its option, at any time during the term of this Warrant,
reduce the then current Exercise Price to any amount deemed
appropriate by a majority of the independent members of the Board
of Directors of the Company; provided, however, that if the
Company elects so to reduce the then current Exercise Price, such
reduction shall remain in effect for a least a 15-day period,
after which time the Company may, at its option, reinstate the
Exercise Price in effect prior to such reduction.
3.3 No Adjustment for Dividends. Except as expressly
provided in Section 3.1, no adjustment in respect of any
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dividends or other payments or distributions made to holders of
securities issuable upon exercise of this Warrant shall be made
during the term of this Warrant or upon the exercise of this
Warrant.
ARTICLE IV
Certain Covenants of the Company
4.1 Reservation of Stock. The Company shall reserve
and set apart and have at all time, free from preemptive rights
and free from liens, claims and encumbrances created by the
Company, a number of shares of authorized but unissued Common
Stock or other securities or property deliverable upon the
exercise of this Warrant sufficient to enable it at any time to
fulfill all its obligations hereunder.
4.2 Fully Paid Stock. Before taking any action which
would cause an adjustment reducing the Exercise Price below the
then par value of the shares of Common Stock or other securities
issuable hereunder upon exercise of this Warrant, the Company
will take any corporate action which may be necessary in order
that the Company may validly and legally issue fully paid and
nonassessable shares of such Common Stock or other securities
issuable hereunder at such adjusted Exercise Price.
4.3 Certain Registrations. If any shares of Common
Stock or other securities issuable hereunder required to be
reserved for the purposes of exercise of this Warrant require
registration with or approval of any governmental authority under
any federal law (other than the Securities Act) or under any
state law (other than securities or Blue Sky laws) before such
shares or other securities may be issued upon exercise of this
Warrant, the Company will, at its expense and as expeditiously as
possible, cause such shares or other securities to be duly
registered or approved, as the case may be.
ARTICLE V
Miscellaneous
5.1 Entire Agreement. This Warrant shall constitute
the entire agreement between the holder hereof and the Company
with respect to the issuance of this Warrant and the Warrant
Shares and related transactions and shall supersede all previous
negotiations, commitments, writings, understandings and
agreements (whether written or oral) with respect thereto.
5.2 Successors and Assigns. This Warrant and the
rights evidenced hereby shall inure to the benefit of and be
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binding upon the successor and assigns of the Company and the
holder hereof, subject to the limitations on assignment and
transfer set forth in the legend at the head of this Warrant.
5.3 Waiver and Amendment. Any term or provision of
this Warrant may be waived at any time by the party which is
entitled to the benefits thereof and any term or provision of
this Warrant may be amended or supplemented at any time by
agreement of the holder hereof and the Company, except that any
waiver of any term or condition, or any amendment or
supplementation, of this Warrant must be in writing and signed by
the holder hereof and the Company. A waiver of any breach or
failure to enforce any of the terms or conditions of this Warrant
must be in writing and signed by the holder hereof and the
Company. A waiver of any breach or failure to enforce any of the
terms or conditions of this Warrant shall not in any way affect,
limit or waive a party's rights hereunder at any time to enforce
strict compliance thereafter with every term or condition of this
Warrant.
5.4 Governing Law; Binding Effect; Severability.
(a) This Warrant shall be enforced, governed and
construed in all respects in accordance with the laws of the
State of New York without giving effect to conflicts of law rules
or principles.
(b) This Warrant and the rights, powers and duties set
forth herein shall be binding upon and inure to the benefit of
the parties hereto, and their respective heirs, estates, legal
representatives, successors and permitted assigns.
(c) If any provision of this Warrant is valid or
unenforceable under any applicable statue or rule of law, then
such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any provision hereof which may
prove invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision hereof.
5.5 File of Warrant. A copy of this Warrant shall be
filed with the records of the Company.
5.6 Notices. Any notice or other communication
required or permitted to be given or delivered hereunder to the
holder hereof shall be delivered personally, sent by courier
guaranteeing overnight delivery or sent by certified or
registered mail (return receipt requested, postage prepaid) to
the holder at the last address shown on the books of the Company
maintained at the Warrant Office for the registration of
transfers of the Warrants or at any more recent address of which
the holder shall have notified the Company in writing. Any
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notice or other communication required or permitted to be given
or delivered hereunder to the Company shall be delivered
personally, sent by courier guaranteeing overnight delivery of
sent by certified or registered mail (return receipt requested,
postage prepaid) to the Warrant Office or such other address as
shall have been furnished by the Company to the holder hereof.
All such notices and other communications shall be deemed to have
been duly given (a) if personally delivered, on the date
delivered, (b) if sent by courier guaranteeing overnight
delivery, on the date delivered, or (c) if by certified or
registered mail, on the fifth business day after the date of
mailing, in each case given or addressed as aforesaid.
5.7 Limitation of Liability; Not Stockholders. No
provision of this Warrant shall be construed as conferring upon
the holder hereof the right to vote, consent, receive dividends
or receive notice as a stockholder of the Company. No provision
hereof, in the absence of affirmative action by the holder hereof
to purchase shares of Common Stock or other securities upon
exercise of this Warrant, and no mere enumeration herein of the
rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price therefor or as a
stockholder of the Company, whether such liability is asserted by
the Company, by creditors of the Company or by others.
5.8 Loss, Destruction, Etc. of Warrants. Upon receipt
of evidence satisfactory to the Company of the loss, theft,
mutilation or destruction of this Warrant, and in the case of any
such loss, theft or destruction upon delivery of a bond of
indemnity in such form and amount as shall be reasonably
satisfactory to the Company, or in the event of such mutilation
upon surrender and cancellation of this Warrant, the Company will
make and deliver a new Warrant, of like tenor, in lieu of such
lost, stolen, destroyed or mutilated Warrant. Any Warrant issued
under the provisions of this Section 5.8 in lieu of any Warrant
alleged to be lost, destroyed or stolen, or in lieu of any
mutilated Warrant, shall constitute an original contractual
obligation on the part of the Company.
5.9 Headings. The headings of the Articles and
Sections of this Warrant are for the convenience of reference
only and shall not, for any purpose, be deemed a part of this
Warrant.
5.10 Casino Control Act. This Warrant shall be subject
to the New Jersey Casino Control Act, N.J.S.A. 5:12-1 et seg.,
and the rules and regulations of the New Jersey Casino Control
Commission (the "Commission") as they currently exist or as they
hereinafter may be amended (the "Act"), including without
limitation the following:
(a) This Warrant shall be subject to redemption
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by the Company, by action of the Board of Directors, if, in the
judgment of the Board of Directors, such action should be taken,
pursuant to Section 151(b) of the General Corporation Law of
Delaware or any other applicable provision of law, to the extent
necessary to prevent the loss or secure the reinstatement of any
government-issued license or franchise held by the Company or any
of its subsidiaries to conduct any portion of the business of the
Company or such subsidiary, which license or franchise is
conditioned upon some or all of the holders of the Company's
securities possessing prescribed qualifications. In the event a
the holder of this Warrant is found not to possess such
prescribed qualifications by the Commission pursuant to the Act
(a "Disqualified Holder"), such Disqualified Holder shall
indemnify the Company for any and all direct or indirect costs,
including attorneys' fees, incurred by the Company as a result of
such holder's continuing ownership or failure to divest promptly.
(b) If the holder of this Warrant is found to be
a Disqualified Holder, the holder shall dispose of his interest
in the Company within 120 days following the Company's receipt of
notice (the "Notice Date") of the holder's disqualification
(which notice immediately shall be delivered to the holder).
(c) It shall be unlawful for a Disqualified
Holder to (i) receive any dividends or interest upon this
Warrant, (ii) exercise directly or through any trustee or
nominee, any right conferred by this Warrant, or (iii) receive
any remuneration in any form, for services rendered or otherwise,
from any subsidiary of the Company that holds a casino license
issued by the Commission.
IN WITNESS WHEREOF, the Company has caused this Warrant
to be signed in its name by its duly authorized officer.
Dated as of ________
XXXXXXX GAMING & ENTERTAINMENT, INC.
By:_________________________________
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SCHEDULE A
to
Warrant
SUBSCRIPTION NOTICE
The undersigned, the holder of he foregoing Warrant,
hereby elects to exercise purchase rights represented by said
Warrant for, and to purchase thereunder, ___________ shares of
the Common Stock covered by Said Warrant and herewith makes
payment in full of the Exercise Price therefor by bank or
certified check pursuant to Section 1.1 of such Warrant, and
requests: (a) that certificates for such shares (and any
securities or other property issuable upon such exercise) be
issued in the name of and delivered to __________________ whose
address is _________________________________________; and (b) if
such shares shall not include all the shares issuable as provided
in said Warrant, that a new Warrant of like tenor and date for
the balance of the shares issuable thereunder be delivered to the
undersigned and in connection therewith the undersigned is
surrendering the original Warrant enclosed herewith.
_____________________________
Dated: ___________, 199__.
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