CONSENT TO AMEND INDENTURE, BONDS AND WARRANTS
This Consent to Amend Indenture, Bonds and Warrants is entered into as of
March 25, 1998 by and between Trans World Gaming Corp. (the "Parent"), Trans
World Gaming of Louisiana Inc. (the "Subsidiary"), U.S. Trust Company of Texas,
N.A., solely in its capacity as Indenture Trustee (the "Trustee") and the
undersigned (the "Holder"). The Parent and the Subsidiary shall be referred to
herein as the "Company". Exhibits attached hereto are by this reference
incorporated herein.
BACKGROUND
1. Pursuant to that certain Subscription Agreement dated July 1,
1996, those parties listed on Exhibit "A" hereto (collectively the "Holders")
purchased those certain 12% Secured Convertible Senior Bonds in the sum of
$4,800,000.00 (the "1996 Notes") and warrants to purchase Common Stock of the
Parent (the "1996 Warrants") issued by the Company. An Indenture was executed
in association with the 1996 Notes (the "1996 Indenture").
2. The Parent has entered into that certain Subscription Agreement
(the "$17 Million Agreement") dated as of March 16, 1998 pursuant to which it
proposes to issue $15 to $17 million of Notes, together with warrants to
purchase common stock of the Parent. The parties to the $17 Million Agreement
have made it a condition of that $17 Million Agreement that the 1996 Notes, 1996
Warrants and 1996 Indenture (collectively the "1996 Documents") be modified as
set forth herein.
3. Attached hereto as Exhibit "B" is that certain Trans World Gaming
Corp., Trans World Gaming of Louisiana, Inc. First Amended Indenture dated as of
March 31, 1998, as to the $4.8 million 12% Secured Senior Bonds due 2005 (the
"Amended Indenture") and related bonds (the "Amended Bonds"). Attached hereto
as Exhibit "C" is that certain form of amended 1996 Warrant (the "Amended
Warrant"). In addition, a separate warrant to purchase Common Stock of the
Parent is being issued pursuant to the Amended Indenture to replace certain
conversion rights granted to the Holders in the 1996 Indenture (the "Conversion
Warrant"). The Holder, subject to certain conditions as set forth herein, has
agreed that the 1996 Documents shall be amended and restated in form and
substance of the Amended Indenture, Amended Bonds and Amended Warrant as
attached hereto, and the Conversion Warrant attached hereto as Exhibit "D".
TERMS
Intending to be legally bound, in consideration of the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
1. Amendment
Subject to the terms and conditions set forth herein, the 1996 Documents
shall be amended and restated pursuant to Section 8.2 of the 1996 Indenture
substantially in the form of
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the Amended Indenture, Amended Bonds, Amended Warrant and Conversion Warrant
attached hereto. As to the Amended Bonds, the principal amount thereof shall be
the same as the principal amount of the 1996 Notes owned by the Holder, as shall
the accrued unpaid interest. The number of shares of common stock of the Parent
which may be obtained by the Amended Warrant shall be the number set forth on
Exhibit "A" next to the Holder's names at the same strike price ($1.00) as the
1996 Warrants, with such Amended Warrants to expire December 31, 2005. The
number of shares subject to the Conversion Warrant is also set forth in Exhibit
"A" next to the Holder's name. Such number of shares of common stock issuable
pursuant to both the Amended Warrant and the Original Warrant shall not be
subject to adjustment by virtue of the warrants issued pursuant to the $17
Million Subscription Agreement or any other warrant, right or agreement in
existence as of or as a result the Closing hereof.
2. This amendment of the 1996 Documents as set forth herein shall
occur in the event of the following:
a. In the event the $17 Million Subscription Agreement closes;
and
b. In the event all of the Holders on Exhibit "A" hereto are a
party to this Agreement.
3. Representations and Warranties of Holder.
As of the Closing Date, the Holder represents and warrants as follows:
a. The Holder is the owner, subject to paragraph C below, of
and has not assigned, transferred, sold, pledged, optioned, endorsed or
otherwise conveyed or transferred any interest in the 1996 Note or 1996 Warrant
acquired by such Holder pursuant to the Subscription Agreement and as set forth
opposite such Holder's name on Exhibit "A" hereto.
b. The Holder has all requisite legal power and authority to
enter into this Agreement. This Agreement has been duly authorized by all
necessary action on the part of the Holder, has been duly executed and delivered
by an authorized officer or representative of the Holder, and is a legal, valid
and binding obligation of the undersigned enforceable in accordance with its
terms, regardless of whether such enforceability is considered in a proceeding
in law or in equity.
c. The Holder has reviewed the Investment Representation
Letter attached hereto as Exhibit "E". All information provided therein and in
this Agreement is true and correct as of the date hereof and as of the date of
the Closing hereof, except as modified as follows: New Generation Limited
Partnership ("New Generation"), has entered into a "Put Option Agreement" with
Xxxxxxxxxxx Xxxxx pursuant to which, under certain conditions, New Generation
can require Xx. Xxxxx to purchase an agreed upon percentage of New Generation's
Amended Bond plus accrued, unpaid interest, plus the Amended Warrants on such
portion of the bond. Also, Fundamental Investors, L.P. ("Fundamental") has
entered into a "Put Option Agreement" with Xx. Xxxxx pursuant to which,
immediately subsequent to the Closing hereof,
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Fundamental has the right to sell Xx. Xxxxx an agreed upon percentage of
Fundamental's Amended Bond and the accrued unpaid interest thereon. Fundamental
has also agreed to sell all Amended Warrants received by it on such bond to Xx.
Xxxxx. Execution of this Agreement shall be deemed execution of the Investment
Representation Letter, as modified in its paragraph.
4. Representations and Warranties of the Company.
As of the Closing Date, the Company represents and warrants to the
Subscriber that:
(a) ORGANIZATION, STANDING, ETC. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Nevada and has all requisite corporate power and authority to own its
assets and carry on its business as presently conducted. The Subsidiary is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Louisiana and has all requisite corporate power and
authority to own its assets and to carry on its business as presently
conducted. Parent and Subsidiary have all requisite corporate power and
authority to (i) execute, deliver, and perform their obligations under this
Agreement, the Amended Indenture and Amended Bonds, the Amended Warrants, the
Conversion Warrants and all other agreements and instruments executed and
delivered pursuant to or in connection with this Agreement, the Amended
Indenture, the Amended Bonds, the Conversion Warrant and Amended Warrants
(collectively the "Operative Agreements"), and (ii) issue the Amended Bonds,
the Conversion Warrants and the Amended Warrants in exchange for the 1996
Notes and 1996 Warrants.
(b) AUTHORIZATION AND EXECUTION; AMENDED BONDS, CONVERSION WARRANTS
AND AMENDED WARRANTS VALIDLY ISSUED. The execution, delivery and performance
by Parent and Subsidiary of this Agreement and the other Operative
Agreements, and the issuance of the Amended Bonds, the Conversion Warrants
and the Amended Warrants hereunder have been duly and validly authorized by
Parent and Subsidiary. This Agreement and the other Operative Agreements
have been duly executed and delivered by Parent and Subsidiary and constitute
valid and binding agreements of Parent and Subsidiary enforceable against
Parent and Subsidiary in accordance with their respective terms. Upon the
Closing, the Amended Bonds will be valid and binding obligations of the
Parent and Subsidiary and the shares of common stock issuable pursuant to the
Amended Warrants and the Conversion Warrants will upon issuance be duly and
validly issued and outstanding, fully paid and nonassessable (other than the
exercise price of the Amended Warrants and Conversion Warrants).
(c) CONTRAVENTION. The execution, delivery and performance of this
Agreement and the other Operative Agreements and the consummation of the
transactions contemplated thereby do not contravene or constitute a default
under or violate (i) any provision of applicable law or regulation the violation
of which would have a material adverse effect on Parent or Subsidiary or on the
Amended Bonds, the Conversion Warrants and the Amended Warrants, (ii) the
Articles of Incorporation and Bylaws of Parent or Subsidiary, or (iii) any
agreements, judgment, injunction, order, decree or other instrument binding upon
Parent or Subsidiary or any of their assets or properties, the violation of
which would have a material adverse effect on Parent or Subsidiary or on the
Amended Bonds, the Conversion Warrants and the Amended Warrants.
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For purposes of this Agreement, a "material adverse effect" means a
material adverse effect on (a) the business, operations, property or condition
(financial or otherwise) of Parent and Subsidiary, (b) the ability of the Parent
or Subsidiary to perform their respective obligations under this Agreement, or
any other Operative Agreement to which any of them is a party, or (c) the
validity, enforceability, perfection or priority of this Agreement or the rights
or remedies of the Trustee or the holder of the Amended Bonds, Amended Warrants
or Conversion Warrants.
(d) GOVERNMENTAL REGULATIONS. Except as required pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and State securities laws,
Parent and Subsidiary are not subject to any foreign, Federal or State law or
regulation limiting their ability to enter into this Agreement or any other
Operative Agreement, to issue the Amended Bonds, the Conversion Warrants and the
Amended Warrants or to perform their obligations required thereby.
5. Surrender of Securities; Value of Securities.
Immediately following the Closing, the Holder shall surrender to the
Indenture Trustee the 1996 Note and the 1996 Warrant, which shall be replaced
with the Amended Bond in the form attached hereto, the Amended Warrant in the
form attached hereto and the Conversion Warrant in the form attached hereto.
The Parties hereby agree that, to the extent lawful, the parties will take the
position, for income tax reporting purposes, that the value of the Amended Bonds
are not greater than the value of the 1996 Notes and that the Amended Warrants
and the Conversion Warrants have no value.
6. Closing.
The closing this Agreement shall be deemed to occur simultaneously with
and only in the event of the closing of the $17 Million Agreement (the
"Closing"). The Holder acknowledges that the Amended Notes, Amended Warrants
and Conversion Warrants shall be delivered subsequent to the Closing and that
the 1996 Notes and 1996 Warrants shall be returned to the Indenture Trustee.
The parties hereto agree to act in good faith and to use their best efforts to
the extent additional documents, actions or information are necessary
post-closing and covenant to cooperate with each other in taking all necessary
actions related thereto.
7. Survival of Representations and Warranties.
All representations and warranties contained in this agreement shall
survive the execution and delivery of this Agreement.
8. Waiver of Jury Trial.
Each of the parties hereto irrevocably and unconditionally waives the
right to trial by jury in any legal or equitable action, suit or proceeding
arising out of or relating to this agreement, the
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units or any other operative agreement or any transaction contemplated hereby or
thereby or the subject matter of any of the foregoing.
9. Notices to the Company.
All notices and other communications provided for herein shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by registered or certified mail, return receipt requested, postage prepaid,
telex, telecopier or overnight air courier guaranteeing next day delivery:
(a) if to the Company, to it at the following address:
Trans World Gaming Corp.
Xxx Xxxx Xxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxxxxxx, Chief Financial Officer
(b) if to the Indenture Trustee, to it at the following address:
U.S. Trust Company of Texas
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxxxx, Vice President
(c) if to the Holder, to the address set forth on the signature page
hereto, or at such other address as either party shall have
specified by notice in writing to the other.
All notices and communications shall be deemed to have been duly given:
at the time delivered by hand, if personally delivered; five business days after
being deposited in the mail, certified mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is orally acknowledged, if telecopied;
and the next business day after timely delivery to the courier, if sent by
overnight air courier guaranteeing next day delivery.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
10. Notification of Changes.
The Holder and the Company agree and covenant to notify the other
promptly upon the occurrence of any event prior to the Closing which would cause
any representation, warranty, covenant or other statement contained in this
Agreement by such person so notifying to be false or incorrect or of any change
in any statement made herein occurring prior to the Closing Date.
11. Assignability.
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This Agreement is not assignable by the Holder or the Company, and may
not be modified, waived or terminated except by an instrument in writing signed
by the party against whom enforcement of such modifications, waiver or
termination is sought.
12. Binding Effect.
Except as otherwise provided herein, this Agreement shall be binding upon
and inure to the benefit of the parties and their heirs, executors,
administrators, successors, and legal representatives, and assigns, including
any transferee of the Amended Bonds, Amended Warrants and Conversion Warrants,
and the agreements, representations, warranties and acknowledgments contained
herein shall be deemed to be made by and be binding upon such heirs, executors,
administrators, successors, and legal representatives and assigns. If the
Holder is more than one person, the obligation of the Holder shall be joint and
several and the agreements, representations, warranties and acknowledgments
contained herein shall be deemed to be made by and be binding upon each such
person and his heirs, executors, administrators and successors. By entering into
this Agreement, the Holder agrees that this agreement and the amendment to the
1996 Indenture authorized herein shall not constitute a default under the 1996
Indenture.
13. Obligations Irrevocable.
The obligations of the Holder shall be irrevocable, except with the
consent of the Company, until the Closing or earlier termination of the $17
Million Subscription Agreement.
14. Entire Agreement.
This Agreement constitutes the entire agreement of the Holder and the
Company relating to the matters contained herein, superseding all prior
contracts, commitments, or agreements, whether oral or written.
15. Governing Law.
This Agreement shall be governed and controlled as to the validity,
enforcement, interpretations, construction and effect and in all other aspects
by the substantive laws of the State of NEW YORK, without reference to conflicts
of laws principles.
16. Severability.
If any provision of this Agreement or the application thereof to any
Holder or circumstance shall be held invalid or unenforceable to any extent, the
remainder of this Agreement and the application of such provision to other
Holders or circumstances shall not be affected thereby and shall be enforced to
the greatest extent permitted by law.
17. Headings.
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The headings in this Agreement are inserted for convenience and
identification only and are not intended to describe, interpret, define, or
limit the scope, extent or intent of this Agreement or any provision hereof.
18. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which together shall be deemed to be one and the same agreement.
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IN WITNESS WHEREOF, the undersigned Holder and Company have executed this
Consent to Amend Indenture, Bonds and Warrants this 25 day of March, 1998.
CORPORATE HOLDER:
By: _________________________________
Its: ________________________________
INDIVIDUAL HOLDER:
By: _________________________________
PARTNERSHIP HOLDER:
By: _________________________________
Its: ________________________________
TRANS WORLD GAMING CORP:
By: _________________________________
Its: ________________________________
TRANS WORLD GAMING
OF LOUISIANA, INC.
By: _________________________________
Its: ________________________________
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Exhibit "A"
Name Series # Series # Principal Amount Number of Number of Shares as
of Holder of 1996 of 1996 of Amended Bond Shares as to to Conversion
Note Warrant Amended Warrant
Warrant
Value Partners, Ltd. $3,000,000 600,000 2,000,000
Anasazi Partners $1,000,000 200,000 666,667
Limited Partnership
New Generation $ 500,000 100,000 333,333
Limited Partnership
Fundamental $ 200,000 40,000 133,333
Investors, L.P.
Xxxxx Xxxxxxxx and
Xxxxxxx Xxxxxxxx $ 100,000 20,000 66,667
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Exhibit "B"
FORM OF AMENDED INDENTURE AND BOND
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Exhibit "C"
FORM OF AMENDED WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES ACT, AND MAY NOT BE
TRANSFERRED WITHOUT REGISTRATION UNDER SUCH
ACTS OR PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE
COMMON STOCK
Series A. No. __
TRANS WORLD GAMING CORP.
(a Nevada corporation)
Dated: March 31, 1998
THIS CERTIFIES that _____________ (together with its successors or
permitted assigns, the "Holder") is entitled to purchase from Trans World Gaming
Corp., a Nevada corporation ("Company") up to ________ shares of the Company's
common stock, par value $.001 per share (the "Common Stock"), at a purchase
price of $1.00 per share of Common Stock (the "Warrant Price"), subject to
adjustment as hereafter provided.
This Warrant is issued pursuant to that certain Consent to Amend
Indenture, Bonds and Warrants Agreement dated as of March 25, 1998 (the
"Agreement"), between the Company and the Holder.
1. EXERCISE OF THE WARRANT.
The rights represented by this Warrant may be exercised at any time on or
before 5:00 p.m., New York time, on December 31, 2005, in whole or in part, by
(i) the surrender of this Warrant (with the purchase form at the end hereof
properly executed) at the principal executive office of the Company (or such
other office or agency of the Company as it may designate by notice in writing
to the Holder at the address of the Holder appearing on the books of the
Company); (ii) payment to the Company of the Warrant Price then in effect for
the number of shares of Common Stock specified in the above-mentioned purchase
form together with
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applicable stock transfer taxes, if any; and (iii) delivery to the Company of a
duly executed agreement signed by the person(s) designated in the purchase form
to the effect that such person(s) agree(s) to be bound by the provisions of
Paragraph 5 and subparagraph (b), (c) and (d) of Paragraph 6 hereof. This
Warrant shall be deemed to have been exercised, in whole or in part to the
extent specified, immediately prior to the close of business on the date this
Warrant is surrendered and payment is made in accordance with the foregoing
provisions of this Paragraph 1, and the person or persons in whose name or names
the certificates for the Common Stock shall be issuable upon such exercise
shall become the Holder or Holders of record of such Common Stock at that time
and date. The Common Stock so purchased shall be delivered to the Holder within
a reasonable time, not exceeding ten (10) business days, after the rights
represented by this Warrant shall have been so exercised. If at any time this
Warrant is exercised as to less than the total number of shares for which it may
be exercised, and this Warrant shall not have expired, the Company shall
promptly issue to the Holder a new Warrant identical in form as to this Warrant
as to the remaining shares hereunder.
2. TRANSFER.
Subject to the legend set forth at the top of the first page hereof, this
Warrant may be assigned in whole or in part by the Holder by (i) completing and
executing the form of assignment at the end hereof and (ii) surrendering this
Warrant with such duly completed and executed assignment form for cancellation,
accompanied by funds sufficient to pay any transfer tax, at the office or agency
of the Company referred to in Paragraph 9(b), hereof; whereupon the Company
shall issue, in the name or names specified by the Holder (including the Holder)
a new Warrant or Warrants of like tenor and representing in the aggregate rights
to purchase the same number of shares of Common Stock as are then purchasable
hereunder.
3. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees that all Common Stock and
Common Stock issuable upon exercise of this Warrant will, upon issuance, be duly
and validly issued, fully paid and nonassessable and no personal liability will,
for Company obligations, attach to the holder thereof by reason of being such a
holder, other than as set forth herein.
(b) The Company covenants and agrees that during the period
within which this Warrant may be exercised, the Company will at all times have
authorized and reserved a sufficient number of shares of Common Stock to provide
for the exercise of this Warrant.
4. NO RIGHTS OF STOCKHOLDER.
This Warrant shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company, either at law or in equity, and the
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
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5. REGISTRATION.
(a) The Holder shall have the right to have the shares of
Common Stock underlying this Warrant registered as part of the next public
offering of the Common Stock. If no Common Stock offering has occurred by June
30, 1998, then upon the written request of any combination of the holders of
Common Stock or of Warrants issued by the Company and collectively exercisable
into not less than 100,000 shares of Common Stock (as such number may be
adjusted under Paragraph 7), and on a one-time basis, the Company shall file,
within ninety (90) days after written request such registration, and use its
best efforts to cause to be declared effective ninety (90) days thereafter, by
the Securities and Exchange Commission, a registration statement or
post-effective amendment thereto as permitted under the Securities Act of 1933,
as amended (the "Act"), covering the sale by the Holder of the Common Stock
issuable upon exercise of this Warrant or any portion hereof (the "Registerable
Securities"). The Company shall supply prospectuses in order to facilitate the
public sale or other disposition of the Registerable Securities, use its best
efforts to register and qualify any of the Registerable Securities for sale in
such states as such Holder reasonably designates and do any and all other acts
and things which may be necessary to enable such Holder to consummate the public
sale of the Registerable Securities, and furnish indemnification in the manner
provided in Paragraph 6 hereto. The Holder shall furnish information reasonably
requested by the Company in accordance with such post-effective amendments or
registration statements, including its intentions with respect thereto, and
shall furnish indemnification as set forth in Paragraph 6.
(b) The Company will maintain such registration statement or
post-effective amendment current and effective under the Act until two years
following the expiration of the exercisability of this Warrant, or until shares
owned by the Holder are eligible for sale without restriction under Rule 144.
(c) The Company shall bear the entire cost and expense of any
registration of securities under Paragraph 5 hereof. Notwithstanding the
foregoing, any Holder whose Registerable Securities are included in any such
registration statement pursuant to this Paragraph 5 shall, however, bear the
fees of any counsel retained by him and any transfer taxes or underwriting
discounts or commissions applicable to the Registerable Securities sold by him
pursuant thereto.
(d) In addition the Company shall:
(i) furnish to the Holder such numbers of copies of a
summary prospectus or other prospectus, including a preliminary prospectus or
any amendment or supplement to any prospectus, in conformity with the
requirements of the 1933 Act, and such other documents, as the Holder may
reasonably request in order to facilitate the public sale or other disposition
of the securities owned by the Holder;
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(ii) use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as the Holder shall reasonably request, and
do any and all other acts and things which may be necessary or advisable to
enable such Holder to consummate the public sale or other disposition in such
jurisdictions of the securities owned by such Holder, except that the Company
shall not for any such purpose be required to qualify to do business as a
foreign corporation in any jurisdiction wherein it is not so qualified or to
file therein any general consent to service of process;
(iii) use its best efforts to list such securities on any
securities exchange on which any securities of the Company is then listed, if
the listing of such securities is then permitted under the rules of such
exchange;
(iv) enter into and perform its obligations under an
underwriting agreement, if the offering is an underwritten offering, in usual
and customary form, with the managing underwriter or underwriters of such
underwritten offering;
(v) notify the Holder of Registrable Securities covered
by such registration statement, at any time when a prospectus relating thereto
covered by such registration statement is required to be delivered under the
1933 Act, of the happening of any event of which it has knowledge as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing; and
(vi) furnish, at the request of the Holder on the date
such Registrable Securities are delivered to the underwriters for sale pursuant
to such registration or, if such Registrable Securities are not being sold
through underwriters, on the date the registration statement with respect to
such Registrable Securities becomes effective, (i) an opinion, dated such date,
of the counsel representing the Company for the purpose of such registration,
addressed to the underwriters, if any, and to the Holder making such request,
covering such legal matters with respect to the registration in respect of which
such opinion is being given as the Holder of such Registrable Securities may
reasonably request and are customarily included in such an opinion and (ii)
letters, dated, respectively, (1) the effective date of the registration
statement and (2) the date such Registrable Securities are delivered to the
underwriters, if any, for sale pursuant to such registration, from a firm of
independent certified public accountants of recognized standing selected by the
Company, addressed to the underwriters, if any, and to the Holder making such
request, covering such financial, statistical and accounting matters with
respect to the registration in respect of which such letters are being given as
the Holder of such Registrable Securities may reasonably request and are
customarily included in such letters; and
(vii) take such other actions as shall be reasonably
requested by any Holder to facilitate the registration and sale of the
Registrable Securities.
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6. INDEMNIFICATION.
(a) Whenever pursuant to Paragraph 5 a registration statement
relating to any Registerable Securities is filed under the Act, amended or
supplemented, the Company will indemnify and hold harmless each Holder of the
Registerable Securities covered by such registration statement, amendment or
supplement (such holder hereinafter referred to as the "Distributing Holder"),
each person, if any, who controls (within the meaning of the Act) the
Distributing Holder, and each officer, director, employee, partner or agent of
the Distributing Holder, and each underwriter (within the meaning of the Act) of
such securities and each person, if any, who controls (within the meaning of the
Act) any such underwriter and each officer, director, employee, agent or partner
of such underwriter against any losses, claims, damages or liabilities joint or
several, to which the Distributing Holder, any such underwriter or any other
person described above may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any such registration statement or any
preliminary prospectus or final prospectus constituting a part thereof or any
amendment or supplement thereto, or arise out of or are based upon the omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; and will reimburse the Distributing
Holder and each such underwriter or such other person for any legal or other
expenses reasonably incurred by the Distributing Holder, or underwriter or such
other person, in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case (i) to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in said registration
statement, said preliminary prospectus, said final prospectus or said amendment
or supplement in reliance upon and in conformity with written information
furnished by such Distributing Holder, any other Distributing Holder or any such
underwriter or any other such person for use in the preparation thereof, and
(ii) such losse, claims, damages or liabilities arise out of or are based upon
any actual or alleged untrue statement or omission made in or from any
preliminary prospectus, but corrected in the final prospectus, as amended or
supplemented.
(b) Whenever pursuant to Paragraph 5 a registration statement
relating to the Registerable Securities is filed, amended or supplemented under
the Act, the Distributing Holder will indemnify and hold harmless the Company
and each underwriter, each of their respective directors, each of their
respective officers, employees, partners and agents thereto, and each person, if
any, who controls the Company (within the meaning of the Act) against any
losses, claims, damages or liabilities to which the Company or any such
director, officer, employees, partners and agents or controlling person may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue or alleged untrue statement of any material fact contained in
any such registration statement or any preliminary prospectus or final
prospectus constituting a part thereof, or any amendment or supplement thereto,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent that
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such untrue statement or alleged untrue statement or omission was made in said
registration statement, said preliminary prospectus, said final prospectus or
said amendment or supplement in reliance upon and in conformity with written
information furnished by such Distributing Holder for use in the preparation
thereof; and will reimburse the Company or any such director, officer,
employees, partners and agents or controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under this
Paragraph 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying
party, give the indemnifying party notice of the commencement thereof; but the
omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Paragraph 6.
(d) In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnified party will be entitled to participate in, and , to the extent that
it may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnifying party, and after notice from the indemnified party to such
indemnifying party of its election to so assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Paragraph 6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
7. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SECURITIES.
(a) The Warrant Price shall be subject to adjustment from time
to time as follows:
(i) In case the Company shall at any time after the date
hereof pay a dividend in shares of Common Stock or
make a distribution in shares of Common Stock, then
upon such dividend or distribution the Warrant Price
in effect immediately prior to such dividend or
distribution shall forthwith be reduced to a price
determined by dividing:
(A) an amount equal to the total number of shares
of Common Stock outstanding immediately prior
to such dividend or distribution multiplied
by the Warrant Price in effect immediately
prior to such dividend or distribution, by
(B) the total number of shares of Common Stock
outstanding immediately after such issuance
or sale.
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For the purposes of any computation to be made in accordance with
the provision of this clause (i), the following provisions shall be applicable:
Common Stock issuable by way of dividend or other distribution on any stock of
the Company shall be deemed to have been issued immediately after the opening of
business on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution.
(ii) In case the Company shall at any time subdivide or
combine the outstanding Common Stock, the Warrant
Price shall forthwith be proportionately decreased
in the case of subdivision or increased in the case
of combination. Any such adjustment shall become
effective at the time such subdivision or
combination shall become effective.
(iii) In case the Company shall at any time or from time
to time issue or sell shares of Common Stock (or
securities convertible into or exchangeable for
shares of Common Stock, or any options, warrants or
other rights to acquire shares of Common Stock) at a
price per share less than the Market Price per share
of Common Stock (treating the price per share of any
security exchangeable or exercisable into Common
Stock as equal to (x) the sum of the price for such
security convertible, exchangeable or exercisable
into Common Stock plus any additional consideration
payable (without regard to any anti-dilution
adjustments) upon the conversion, exchange or
exercise of such security into Common Stock divided
by (y) the number of shares of Common Stock
initially underlying such convertible, exchangeable
or exercisable security), other than issuance or
sales of Common Stock pursuant to any employee
benefit plan, then, and in each such case, the
number of shares of Common Stock thereafter
purchasable upon exercise of a Warrant shall be
determined by multiplying the number of shares of
Common Stock theretofore purchasable upon exercise
of each Warrant by a fraction (A) the numerator of
which shall be the sum of the number of shares of
Common Stock outstanding on such date plus the
number of additional shares of Common Stock issued
(or the maximum number into which such convertible
or exchangeable securities initially may convert or
exchange or for which such options, warrants or
other rights initially may be exercised) and (B) the
denominator of which shall be the sum of the number
of shares of Common Stock outstanding on such date
plus the number of shares of Common Stock which the
aggregate consideration for the total number of such
additional shares of Common Stock so issued (or into
which such convertible or exchangeable securities
may convert or exchange or for which such options,
warrants or other rights may be exercised plus the
aggregate amount of any additional consideration
initially payable
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upon conversion, exchange or exercise of such
security) would purchase at the Market Price per
share of Common Stock on such date. Such adjustment
shall be made whenever such shares, securities,
options, warrants or other rights are issued, and
shall become effective retroactively immediately
after the close of business on the record date for
the determination of stockholders entitled to
receive such shares, securities, options, warrants
or other rights; PROVIDED, that the determination as
to whether an adjustment is required to be made
pursuant to this Section 7(a) shall only be made
upon the issuance of such shares or such convertible
or exchangeable securities, options, warrants or
other rights, and not upon the issuance of the
security into which such convertible or exchangeable
security converts or exchanges, or the security
underlying such option, warrant or other right.
Notwithstanding the foregoing, in the event of such
issuance or sale of Common Stock at a cash price
less than the Market Price, no such adjustment under
this Section 7(a) need be made to the number of
shares underlying the Warrant unless such adjustment
would require an increase or decrease of at least 1%
of the number of shares underlying the Warrant. Any
lesser adjustment shall be carried forward and shall
be made at the time of and together with the next
subsequent adjustment which, together with any
adjustment or adjustments so carried forward, shall
amount to an increase or decrease of at least 1% of
number of shares underlying the Warrant. For the
purpose of this Agreement, the term "Market Price"
shall mean (i) if the Common Stock is traded in the
over-the-counter market or on the National
Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ"), the average per share
closing prices of the Common Stock on the 20
consecutive trading days immediately preceding the
date in question as reported by NASDAQ or an
equivalent generally accepted reporting service, or
(ii) if the Common Stock is traded on a national
securities exchange, the average for the 20
consecutive trading days immediately preceding the
date in question of the daily per share closing
prices of the Common Stock on the principal stock
exchange on which it is listed, as the case may be.
The closing price referred to above shall be the
last reported sales price or in case no such
reported sale takes place on such day, the average
of the reported closing bid and asked prices, in
either case on the national securities exchange or
automated quotation system on which the Common Stock
is then listed. Whenever the number of shares of
Common Stock purchasable upon exercise of each
Warrant is adjusted, the Warrant Price for each
share of Common Stock payable upon exercise of each
Warrant shall be adjusted by multiplying such
Warrant Price
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immediately prior to such adjustment by a fraction,
the numerator of which shall be the number of shares
of Common Stock purchasable upon the exercise of
each Warrant immediately prior to such adjustment
and the denominator of which shall be the number of
shares of Common Stock purchasable immediately after
such adjustment.
(iv) Within a reasonable time after the close of each
quarterly fiscal period of the Company during which
the Warrant Price or number of shares issuable upon
exercise of this Warrant has been adjusted as herein
provided, the Company shall deliver to the Holder a
certificate signed by the President or Vice
President of the Company and by the Treasurer or
Assistant Treasurer or the Secretary or an Assistant
Secretary of the Company, showing in detail the
facts requiring all such adjustments occurring
during such period and the Warrant Price after each
such adjustment.
(b) In the event that the number of outstanding shares of
Common Stock is increased by a stock dividend or distribution payable in Common
Stock or by a subdivision of the outstanding Common Stock, then, from and after
the record date thereof, by reason of such dividend, distribution or
subdivision, the number of shares of Common Stock issuable upon the exercise of
the Warrant shall be increased in proportion to such increase in outstanding
shares. In the event that the number of shares of Common Stock outstanding is
decreased by a combination of the outstanding Common Stock, then, from and after
the record date thereof, the number of shares of Common Stock issuable upon the
exercise of the Warrant shall be decreased in proportion to such decrease in the
outstanding shares of Common Stock.
(c) In case of any reorganization or reclassification of the
outstanding Common Stock (other than a change in par value, or from par value to
no par value, or as a result of a subdivision or combination), or in case of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification of the
outstanding Common Stock), or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, the holder of the Warrant then outstanding shall thereafter have the
right to purchase the kind and amount of shares of common stock and other
securities and property receivable upon such reorganization, reclassification,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock which the holder of the Warrant shall then be entitled to purchase;
such adjustments shall apply with respect to all such changes occurring between
the date of this Warrant Agreement and the date of exercise or expiration of the
Warrant.
(d) Subject to the provisions of this Section, in case the
Company shall, at any time prior to the exercise of the Warrant, desire to
declare a dividend or make any distribution of its assets to holders of its
Common Stock, whether as a liquidating or a partial liquidating dividend or for
any other purpose, the Company shall provide the holder of the Warrant with
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written notice of such intent not less than thirty (30) days prior to the record
date to determine holders of Common Stock entitled to receive such distribution
and the holder of this Warrant shall have until 5:00 p.m. EST on the twentieth
(20th) day following the actual receipt of such notice to elect whether to
exercise this Warrant in accordance with the terms herein. In the event of
proper election to exercise the Warrant, the holder of this Warrant shall be
deemed to be a holder of Common Stock as of the record date for such
distribution. Should the holder of the Warrant elect to exercise his Warrant
within 20 days after the record date for the determination of those holders of
Common Stock entitled to such dividend or distribution, he shall be entitled to
receive for the Warrant Price per Warrant, in addition to each share of Common
Stock, the amount of such distribution (or, at the option of the Company, a sum
equal to the value of any such assets at the time of such distribution as
determined by the Board of Directors of the Company in good faith), which would
have been payable to the holder had he been the holder of record of the Common
Stock receivable upon exercise of his Warrant on the record date for the
determination of those entitled to such distribution.
(e) In case of the dissolution, liquidation or winding-up of
the Company, all rights under the Warrant shall terminate on a date fixed by the
Company, such date to be no earlier than ten (10) days prior to the
effectiveness of such dissolution, liquidation or winding-up and not later than
five (5) days prior to such effectiveness. Notice of such termination of
purchase rights shall be given to the last registered holder of this Warrant, as
the same shall appear on the books of the Company, by registered mail at least
thirty (30) days prior to such termination date.
(f) In case the Company shall, at any time prior to the
expiration of this Warrant and prior to the exercise thereof, offer to the
holders of its Common Stock any rights to subscribe for additional shares of any
class of the Company, then the Company shall give written notice thereof to the
last registered holder hereof not less than thirty (30) days prior to the date
on which the books of the Company are closed or a record date is fixed for the
determination of the stockholders entitled to such subscription rights. Such
notice shall specify the date as to which the books shall be closed or record
date fixed with respect to such offer of subscription and the right of the
holder hereof to participate in such offer of subscription shall terminate if
this Warrant shall not be exercised on or before the date of such closing of the
books or such record date.
(g) Any adjustment pursuant to the aforesaid provisions shall
be made on the basis of the number of shares of Common Stock which the holder
thereof would have been entitled to acquire by the exercise of the Warrant
immediately prior to the event giving rise to such adjustment.
(h) Irrespective of any adjustment in the Warrant Price or the
number or kind of shares purchasable upon exercise of this Warrant, Warrants
previously or hereafter issued may continue to express the same price and number
and kind of shares as are stated in this Warrant.
-20-
(i) The Company shall retain a firm of independent public
accountants (who may be any such firm regularly employed by the Company) to make
any computation required under this Section.
(j) If at any time, as a result of an adjustment made pursuant
to this Paragraph 7, the Holder of this Warrant shall become entitled to
purchase any securities other than shares of Common Stock, thereafter the number
of such securities so purchasable upon exercise of each Warrant and the Warrant
Price for such shares shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock.
8. FRACTIONAL SHARES.
The Company shall not be required to issue fractions of shares of Common
Stock on the exercise of this Warrant; provided, however, that if a Holder
exercises all the Warrants held of record by such Holder, the fractional
interests shall be eliminated by rounding any fraction up to the nearest whole
number of shares, if the fraction is equal to or greater than .5, and down if
the fraction is less than .5.
9. MISCELLANEOUS.
(a) This Warrant shall be governed by and in accordance with
the laws of the State of New York.
(b) All notices, requests, consents and other communications
hereunder shall be made in writing and shall be deemed to have been duly made
when delivered, or mailed by registered or certified mail, return receipt
requested: (i) if to a Holder, to the address of such Holder as shown on the
books of the Company, or (ii) if to the Company, Xxx Xxxx Xxxxx, Xxxxx 0000, Xxx
Xxxx, XX 00000.
(c) All the covenants and provisions of this Warrant by or for
the benefit of the Company and the Holders inure to the benefit of their
respective successors and assigns hereunder.
(d) Nothing in this Warrant other than Section 6 shall be
construed to give to any person or corporation other than the Company and the
registered Holder or Holders, any legal or equitable right, and this Warrant is
for the sole and exclusive benefit of the Company and the Holder or Holders.
IN WITNESS WHEREOF, Trans World Gaming Corp. has caused this warrant to
be signed by its duly authorized officer and this Warrant to be dated March 31,
1998.
TRANS WORLD GAMING CORP.
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By: ___________________________
Its: __________________________
-22-
FORM OF
NOTICE OF EXERCISE
(To be executed upon partial or full
exercise of the Warrants represented hereby)
The undersigned registered Holder of the Warrants represented by the attached
Warrant Certificate irrevocably exercises such Warrant for and purchases
______________________ (___________) shares of Common Stock of Trans World
Gaming Corp. (the "Company").
The undersigned herewith makes payment therefore in the amount of
$____________, consisting of $ ____________ by wire transfer or certified or
cashiers' check at a price of $_____ per share and requests that a
certificate (or certificates) in denominations of ______________
(___________) shares of Common Stock of the Company hereby purchased be
issued in the name of and delivered to the undersigned or such designee of
the undersigned and, if such shares of Common Stock (together with any shares
issued upon exercise of other Warrants or replacement Warrants) shall not
include all of the shares of Common Stock issuable upon exercise of all
Warrants represented by such Warrant Certificate (or if a new or replacement
Warrant is otherwise to be provided pursuant to the Warrant Certificate),
that a new or replacement Warrant Certificate of like tenor for the number of
Warrants not being exercised (and not being surrendered) hereunder be issued
in the name of and delivered to the undersigned, whose address is
__________________________.
Dated: __________, 199__.
________________________
(Signature of Registered Holder)
By:________________________
Title:_____________________
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Exhibit "D"
FORM OF CONVERSION WARRANT
THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES ACT, AND MAY NOT BE
TRANSFERRED WITHOUT REGISTRATION UNDER SUCH
ACTS OR PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE
COMMON STOCK
Series B. No. __
TRANS WORLD GAMING CORP.
(a Nevada corporation)
Dated: March 31, 1998
THIS CERTIFIES that _____________ (together with its successors or
permitted assigns, the "Holder") is entitled to purchase from Trans World Gaming
Corp., a Nevada corporation ("Company") up to ________ shares of the Company's
common stock, par value $.001 per share (the "Common Stock"), at a purchase
price of $1.50 per share of Common Stock (the "Warrant Price"), subject to
adjustment as hereafter provided.
This Warrant is issued pursuant to that certain Consent to Amend
Indenture, Bonds and Warrants and that certain First Amended Indenture dated as
of March 31, 1998 as to the $4,800,000.00 12% Secured Senior Bonds due 2005
dated as of March 25, 1998 (the "Agreement"), between the Company and the
Holder.
1. EXERCISE OF THE WARRANT.
The rights represented by this Warrant may be exercised at any time on or
before 5:00 p.m., New York time, on December 31, 2005, in whole or in part, by
(i) the surrender of this Warrant (with the purchase form at the end hereof
properly executed) at the principal executive office of the Company (or such
other office or agency of the Company as it may designate by notice in writing
to the Holder at the address of the Holder appearing on the books of the
-24-
Company); (ii) payment to the Company of the Warrant Price then in effect for
the number of shares of Common Stock specified in the above-mentioned purchase
form together with applicable stock transfer taxes, if any; and (iii) delivery
to the Company of a duly executed agreement signed by the person(s) designated
in the purchase form to the effect that such person(s) agree(s) to be bound by
the provisions of Paragraph 5 and subparagraph (b), (c) and (d) of Paragraph 6
hereof. This Warrant shall be deemed to have been exercised, in whole or in
part to the extent specified, immediately prior to the close of business on the
date this Warrant is surrendered and payment is made in accordance with the
foregoing provisions of this Paragraph 1, and the person or persons in whose
name or names the certificates for the Common Stock shall be issuable upon such
exercise shall become the Holder or Holders of record of such Common Stock at
that time and date. The Common Stock so purchased shall be delivered to the
Holder within a reasonable time, not exceeding ten (10) business days, after the
rights represented by this Warrant shall have been so exercised. If at any time
this Warrant is exercised as to less than the total number of shares for which
it may be exercised, and this Warrant shall not have expired, the Company shall
promptly issue to the Holder a new Warrant identical in form as to this Warrant
as to the remaining shares hereunder.
2. TRANSFER.
Subject to the legend set forth at the top of the first page hereof, this
Warrant may be assigned in whole or in part by the Holder by (i) completing and
executing the form of assignment at the end hereof and (ii) surrendering this
Warrant with such duly completed and executed assignment form for cancellation,
accompanied by funds sufficient to pay any transfer tax, at the office or agency
of the Company referred to in Paragraph 9(b), hereof; whereupon the Company
shall issue, in the name or names specified by the Holder (including the Holder)
a new Warrant or Warrants of like tenor and representing in the aggregate rights
to purchase the same number of shares of Common Stock as are then purchasable
hereunder.
3. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees that all Common Stock and
Common Stock issuable upon exercise of this Warrant will, upon issuance, be duly
and validly issued, fully paid and nonassessable and no personal liability will,
for Company obligations, attach to the holder thereof by reason of being such a
holder, other than as set forth herein.
(b) The Company covenants and agrees that during the period
within which this Warrant may be exercised, the Company will at all times have
authorized and reserved a sufficient number of shares of Common Stock to provide
for the exercise of this Warrant.
4. NO RIGHTS OF STOCKHOLDER.
This Warrant shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company, either at law or in equity, and the
rights of the Holder are limited to
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those expressed in this Warrant and are not enforceable against the Company
except to the extent set forth herein.
5. REGISTRATION.
(a) The Holder shall have the right to have the shares of
Common Stock underlying this Warrant registered as part of the next public
offering of the Common Stock. If no Common Stock offering has occurred by June
30, 1998, then upon the written request of any combination of the holders of
Common Stock or of Warrants issued by the Company and collectively exercisable
into not less than 100,000 shares of Common Stock (as such number may be
adjusted under Paragraph 7), and on a one-time basis, the Company shall file,
within ninety (90) days after written request such registration, and use its
best efforts to cause to be declared effective ninety (90) days thereafter, by
the Securities and Exchange Commission, a registration statement or
post-effective amendment thereto as permitted under the Securities Act of 1933,
as amended (the "Act"), covering the sale by the Holder of the Common Stock
issuable upon exercise of this Warrant or any portion hereof (the "Registerable
Securities"). The Company shall supply prospectuses in order to facilitate the
public sale or other disposition of the Registerable Securities, use its best
efforts to register and qualify any of the Registerable Securities for sale in
such states as such Holder reasonably designates and do any and all other acts
and things which may be necessary to enable such Holder to consummate the public
sale of the Registerable Securities, and furnish indemnification in the manner
provided in Paragraph 6 hereto. The Holder shall furnish information reasonably
requested by the Company in accordance with such post-effective amendments or
registration statements, including its intentions with respect thereto, and
shall furnish indemnification as set forth in Paragraph 6.
(b) The Company will maintain such registration statement or
post-effective amendment current and effective under the Act until two years
following the expiration of the exercisability of this Warrant, or until shares
owned by the Holder are eligible for sale without restriction under Rule 144.
(c) The Company shall bear the entire cost and expense of any
registration of securities under Paragraph 5 hereof. Notwithstanding the
foregoing, any Holder whose Registerable Securities are included in any such
registration statement pursuant to this Paragraph 5 shall, however, bear the
fees of any counsel retained by him and any transfer taxes or underwriting
discounts or commissions applicable to the Registerable Securities sold by him
pursuant thereto.
(d) In addition the Company shall:
(i) furnish to the Holder such numbers of copies of a
summary prospectus or other prospectus, including a preliminary prospectus or
any amendment or supplement to any prospectus, in conformity with the
requirements of the 1933 Act, and such other documents, as the Holder may
reasonably request in order to facilitate the public sale or other disposition
of the securities owned by the Holder;
-26-
(ii) use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as the Holder shall reasonably request, and
do any and all other acts and things which may be necessary or advisable to
enable such Holder to consummate the public sale or other disposition in such
jurisdictions of the securities owned by such Holder, except that the Company
shall not for any such purpose be required to qualify to do business as a
foreign corporation in any jurisdiction wherein it is not so qualified or to
file therein any general consent to service of process;
(iii) use its best efforts to list such securities on any
securities exchange on which any securities of the Company is then listed, if
the listing of such securities is then permitted under the rules of such
exchange;
(iv) enter into and perform its obligations under an
underwriting agreement, if the offering is an underwritten offering, in usual
and customary form, with the managing underwriter or underwriters of such
underwritten offering;
(v) notify the Holder of Registrable Securities covered
by such registration statement, at any time when a prospectus relating thereto
covered by such registration statement is required to be delivered under the
1933 Act, of the happening of any event of which it has knowledge as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing; and
(vi) furnish, at the request of the Holder on the date
such Registrable Securities are delivered to the underwriters for sale pursuant
to such registration or, if such Registrable Securities are not being sold
through underwriters, on the date the registration statement with respect to
such Registrable Securities becomes effective, (i) an opinion, dated such date,
of the counsel representing the Company for the purpose of such registration,
addressed to the underwriters, if any, and to the Holder making such request,
covering such legal matters with respect to the registration in respect of which
such opinion is being given as the Holder of such Registrable Securities may
reasonably request and are customarily included in such an opinion and (ii)
letters, dated, respectively, (1) the effective date of the registration
statement and (2) the date such Registrable Securities are delivered to the
underwriters, if any, for sale pursuant to such registration, from a firm of
independent certified public accountants of recognized standing selected by the
Company, addressed to the underwriters, if any, and to the Holder making such
request, covering such financial, statistical and accounting matters with
respect to the registration in respect of which such letters are being given as
the Holder of such Registrable Securities may reasonably request and are
customarily included in such letters; and
(vii) take such other actions as shall be reasonably
requested by any Holder to facilitate the registration and sale of the
Registrable Securities.
-27-
6. INDEMNIFICATION.
(a) Whenever pursuant to Paragraph 5 a registration statement
relating to any Registerable Securities is filed under the Act, amended or
supplemented, the Company will indemnify and hold harmless each Holder of the
Registerable Securities covered by such registration statement, amendment or
supplement (such holder hereinafter referred to as the "Distributing Holder"),
each person, if any, who controls (within the meaning of the Act) the
Distributing Holder, and each officer, director, employee, partner or agent of
the Distributing Holder, and each underwriter (within the meaning of the Act) of
such securities and each person, if any, who controls (within the meaning of the
Act) any such underwriter and each officer, director, employee, agent or partner
of such underwriter against any losses, claims, damages or liabilities joint or
several, to which the Distributing Holder, any such underwriter or any other
person described above may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any such registration statement or any
preliminary prospectus or final prospectus constituting a part thereof or any
amendment or supplement thereto, or arise out of or are based upon the omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; and will reimburse the Distributing
Holder and each such underwriter or such other person for any legal or other
expenses reasonably incurred by the Distributing Holder, or underwriter or such
other person, in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case (i) to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in said registration
statement, said preliminary prospectus, said final prospectus or said amendment
or supplement in reliance upon and in conformity with written information
furnished by such Distributing Holder, any other Distributing Holder or any such
underwriter or any other such person for use in the preparation thereof, and
(ii) such losse, claims, damages or liabilities arise out of or are based upon
any actual or alleged untrue statement or omission made in or from any
preliminary prospectus, but corrected in the final prospectus, as amended or
supplemented.
(b) Whenever pursuant to Paragraph 5 a registration statement
relating to the Registerable Securities is filed, amended or supplemented under
the Act, the Distributing Holder will indemnify and hold harmless the Company
and each underwriter, each of their respective directors, each of their
respective officers, employees, partners and agents thereto, and each person, if
any, who controls the Company (within the meaning of the Act) against any
losses, claims, damages or liabilities to which the Company or any such
director, officer, employees, partners and agents or controlling person may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue or alleged untrue statement of any material fact contained in
any such registration statement or any preliminary prospectus or final
prospectus constituting a part thereof, or any amendment or supplement thereto,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent that
-28-
such untrue statement or alleged untrue statement or omission was made in said
registration statement, said preliminary prospectus, said final prospectus or
said amendment or supplement in reliance upon and in conformity with written
information furnished by such Distributing Holder for use in the preparation
thereof; and will reimburse the Company or any such director, officer,
employees, partners and agents or controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under this
Paragraph 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying
party, give the indemnifying party notice of the commencement thereof; but the
omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Paragraph 6.
(d) In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnified party will be entitled to participate in, and , to the extent that
it may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnifying party, and after notice from the indemnified party to such
indemnifying party of its election to so assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Paragraph 6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
7. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SECURITIES.
(a) The Warrant Price shall be subject to adjustment from time
to time as follows:
(i) In case the Company shall at any time after the date
hereof pay a dividend in shares of Common Stock or
make a distribution in shares of Common Stock, then
upon such dividend or distribution the Warrant Price
in effect immediately prior to such dividend or
distribution shall forthwith be reduced to a price
determined by dividing:
(A) an amount equal to the total number of shares
of Common Stock outstanding immediately prior
to such dividend or distribution multiplied
by the Warrant Price in effect immediately
prior to such dividend or distribution, by
(B) the total number of shares of Common Stock
outstanding immediately after such issuance
or sale.
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For the purposes of any computation to be made in accordance with
the provision of this clause (i), the following provisions shall be applicable:
Common Stock issuable by way of dividend or other distribution on any stock of
the Company shall be deemed to have been issued immediately after the opening of
business on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution.
(ii) In case the Company shall at any time subdivide or
combine the outstanding Common Stock, the Warrant
Price shall forthwith be proportionately decreased
in the case of subdivision or increased in the case
of combination. Any such adjustment shall become
effective at the time such subdivision or
combination shall become effective.
(iii) In case the Company shall at any time or from time
to time issue or sell shares of Common Stock (or
securities convertible into or exchangeable for
shares of Common Stock, or any options, warrants or
other rights to acquire shares of Common Stock) at a
price per share less than the Market Price per share
of Common Stock (treating the price per share of any
security exchangeable or exercisable into Common
Stock as equal to (x) the sum of the price for such
security convertible, exchangeable or exercisable
into Common Stock plus any additional consideration
payable (without regard to any anti-dilution
adjustments) upon the conversion, exchange or
exercise of such security into Common Stock divided
by (y) the number of shares of Common Stock
initially underlying such convertible, exchangeable
or exercisable security), other than issuance or
sales of Common Stock pursuant to any employee
benefit plan, then, and in each such case, the
number of shares of Common Stock thereafter
purchasable upon exercise of a Warrant shall be
determined by multiplying the number of shares of
Common Stock theretofore purchasable upon exercise
of each Warrant by a fraction (A) the numerator of
which shall be the sum of the number of shares of
Common Stock outstanding on such date plus the
number of additional shares of Common Stock issued
(or the maximum number into which such convertible
or exchangeable securities initially may convert or
exchange or for which such options, warrants or
other rights initially may be exercised) and (B) the
denominator of which shall be the sum of the number
of shares of Common Stock outstanding on such date
plus the number of shares of Common Stock which the
aggregate consideration for the total number of such
additional shares of Common Stock so issued (or into
which such convertible or exchangeable securities
may convert or exchange or for which such options,
warrants or other rights may be exercised plus the
aggregate amount of any additional consideration
initially payable
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upon conversion, exchange or exercise of such
security) would purchase at the Market Price per
share of Common Stock on such date. Such adjustment
shall be made whenever such shares, securities,
options, warrants or other rights are issued, and
shall become effective retroactively immediately
after the close of business on the record date for
the determination of stockholders entitled to
receive such shares, securities, options, warrants
or other rights; PROVIDED, that the determination as
to whether an adjustment is required to be made
pursuant to this Section 7(a) shall only be made
upon the issuance of such shares or such convertible
or exchangeable securities, options, warrants or
other rights, and not upon the issuance of the
security into which such convertible or exchangeable
security converts or exchanges, or the security
underlying such option, warrant or other right.
Notwithstanding the foregoing, in the event of such
issuance or sale of Common Stock at a cash price
less than the Market Price, no such adjustment under
this Section 7(a) need be made to the number of
shares underlying the Warrant unless such adjustment
would require an increase or decrease of at least 1%
of the number of shares underlying the Warrant. Any
lesser adjustment shall be carried forward and shall
be made at the time of and together with the next
subsequent adjustment which, together with any
adjustment or adjustments so carried forward, shall
amount to an increase or decrease of at least 1% of
number of shares underlying the Warrant. For the
purpose of this Agreement, the term "Market Price"
shall mean (i) if the Common Stock is traded in the
over-the-counter market or on the National
Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ"), the average per share
closing prices of the Common Stock on the 20
consecutive trading days immediately preceding the
date in question as reported by NASDAQ or an
equivalent generally accepted reporting service, or
(ii) if the Common Stock is traded on a national
securities exchange, the average for the 20
consecutive trading days immediately preceding the
date in question of the daily per share closing
prices of the Common Stock on the principal stock
exchange on which it is listed, as the case may be.
The closing price referred to above shall be the
last reported sales price or in case no such
reported sale takes place on such day, the average
of the reported closing bid and asked prices, in
either case on the national securities exchange or
automated quotation system on which the Common Stock
is then listed. Whenever the number of shares of
Common Stock purchasable upon exercise of each
Warrant is adjusted, the Warrant Price for each
share of Common Stock payable upon exercise of each
Warrant shall be adjusted by multiplying such
Warrant Price
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immediately prior to such adjustment by a fraction,
the numerator of which shall be the number of shares
of Common Stock purchasable upon the exercise of
each Warrant immediately prior to such adjustment
and the denominator of which shall be the number of
shares of Common Stock purchasable immediately after
such adjustment.
(iv) Within a reasonable time after the close of each
quarterly fiscal period of the Company during which
the Warrant Price or number of shares issuable upon
exercise of this Warrant has been adjusted as herein
provided, the Company shall deliver to the Holder a
certificate signed by the President or Vice
President of the Company and by the Treasurer or
Assistant Treasurer or the Secretary or an Assistant
Secretary of the Company, showing in detail the
facts requiring all such adjustments occurring
during such period and the Warrant Price after each
such adjustment.
(b) In the event that the number of outstanding shares of
Common Stock is increased by a stock dividend or distribution payable in Common
Stock or by a subdivision of the outstanding Common Stock, then, from and after
the record date thereof, by reason of such dividend, distribution or
subdivision, the number of shares of Common Stock issuable upon the exercise of
the Warrant shall be increased in proportion to such increase in outstanding
shares. In the event that the number of shares of Common Stock outstanding is
decreased by a combination of the outstanding Common Stock, then, from and after
the record date thereof, the number of shares of Common Stock issuable upon the
exercise of the Warrant shall be decreased in proportion to such decrease in the
outstanding shares of Common Stock.
(c) In case of any reorganization or reclassification of the
outstanding Common Stock (other than a change in par value, or from par value to
no par value, or as a result of a subdivision or combination), or in case of any
consolidation of the Company with, or merger of the Company into, another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification of the
outstanding Common Stock), or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, the holder of the Warrant then outstanding shall thereafter have the
right to purchase the kind and amount of shares of common stock and other
securities and property receivable upon such reorganization, reclassification,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock which the holder of the Warrant shall then be entitled to purchase;
such adjustments shall apply with respect to all such changes occurring between
the date of this Warrant Agreement and the date of exercise or expiration of the
Warrant.
(d) Subject to the provisions of this Section, in case the
Company shall, at any time prior to the exercise of the Warrant, desire to
declare a dividend or make any distribution of its assets to holders of its
Common Stock, whether as a liquidating or a partial liquidating dividend or for
any other purpose, the Company shall provide the holder of the Warrant with
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written notice of such intent not less than thirty (30) days prior to the record
date to determine holders of Common Stock entitled to receive such distribution
and the holder of this Warrant shall have until 5:00 p.m. EST on the twentieth
(20th) day following the actual receipt of such notice to elect whether to
exercise this Warrant in accordance with the terms herein. In the event of
proper election to exercise the Warrant, the holder of this Warrant shall be
deemed to be a holder of Common Stock as of the record date for such
distribution. Should the holder of the Warrant elect to exercise his Warrant
within 20 days after the record date for the determination of those holders of
Common Stock entitled to such dividend or distribution, he shall be entitled to
receive for the Warrant Price per Warrant, in addition to each share of Common
Stock, the amount of such distribution (or, at the option of the Company, a sum
equal to the value of any such assets at the time of such distribution as
determined by the Board of Directors of the Company in good faith), which would
have been payable to the holder had he been the holder of record of the Common
Stock receivable upon exercise of his Warrant on the record date for the
determination of those entitled to such distribution.
(e) In case of the dissolution, liquidation or winding-up of
the Company, all rights under the Warrant shall terminate on a date fixed by the
Company, such date to be no earlier than ten (10) days prior to the
effectiveness of such dissolution, liquidation or winding-up and not later than
five (5) days prior to such effectiveness. Notice of such termination of
purchase rights shall be given to the last registered holder of this Warrant, as
the same shall appear on the books of the Company, by registered mail at least
thirty (30) days prior to such termination date.
(f) In case the Company shall, at any time prior to the
expiration of this Warrant and prior to the exercise thereof, offer to the
holders of its Common Stock any rights to subscribe for additional shares of any
class of the Company, then the Company shall give written notice thereof to the
last registered holder hereof not less than thirty (30) days prior to the date
on which the books of the Company are closed or a record date is fixed for the
determination of the stockholders entitled to such subscription rights. Such
notice shall specify the date as to which the books shall be closed or record
date fixed with respect to such offer of subscription and the right of the
holder hereof to participate in such offer of subscription shall terminate if
this Warrant shall not be exercised on or before the date of such closing of the
books or such record date.
(g) Any adjustment pursuant to the aforesaid provisions shall
be made on the basis of the number of shares of Common Stock which the holder
thereof would have been entitled to acquire by the exercise of the Warrant
immediately prior to the event giving rise to such adjustment.
(h) Irrespective of any adjustment in the Warrant Price or the
number or kind of shares purchasable upon exercise of this Warrant, Warrants
previously or hereafter issued may continue to express the same price and number
and kind of shares as are stated in this Warrant.
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(i) The Company shall retain a firm of independent public
accountants (who may be any such firm regularly employed by the Company) to make
any computation required under this Section.
(j) If at any time, as a result of an adjustment made pursuant
to this Paragraph 7, the Holder of this Warrant shall become entitled to
purchase any securities other than shares of Common Stock, thereafter the number
of such securities so purchasable upon exercise of each Warrant and the Warrant
Price for such shares shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock.
8. FRACTIONAL SHARES.
The Company shall not be required to issue fractions of shares of Common
Stock on the exercise of this Warrant; provided, however, that if a Holder
exercises all the Warrants held of record by such Holder, the fractional
interests shall be eliminated by rounding any fraction up to the nearest whole
number of shares, if the fraction is equal to or greater than .5, and down if
the fraction is less than .5.
9. MISCELLANEOUS.
(a) This Warrant shall be governed by and in accordance with
the laws of the State of New York.
(b) All notices, requests, consents and other communications
hereunder shall be made in writing and shall be deemed to have been duly made
when delivered, or mailed by registered or certified mail, return receipt
requested: (i) if to a Holder, to the address of such Holder as shown on the
books of the Company, or (ii) if to the Company, Xxx Xxxx Xxxxx, Xxxxx 0000, Xxx
Xxxx, XX 00000.
(c) All the covenants and provisions of this Warrant by or for
the benefit of the Company and the Holders inure to the benefit of their
respective successors and assigns hereunder.
(d) Nothing in this Warrant other than Section 6 shall be
construed to give to any person or corporation other than the Company and the
registered Holder or Holders, any legal or equitable right, and this Warrant is
for the sole and exclusive benefit of the Company and the Holder or Holders.
IN WITNESS WHEREOF, Trans World Gaming Corp. has caused this warrant to
be signed by its duly authorized officer and this Warrant to be dated March 31,
1998.
TRANS WORLD GAMING CORP.
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By:____________________________
Its: __________________________
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FORM OF
NOTICE OF EXERCISE
(To be executed upon partial or full
exercise of the Warrants represented hereby)
The undersigned registered Holder of the Warrants represented by the attached
Warrant Certificate irrevocably exercises such Warrant for and purchases
______________________ (___________) shares of Common Stock of Trans World
Gaming Corp. (the "Company").
The undersigned herewith makes payment therefore in the amount of
$____________, consisting of $ ____________ by wire transfer or certified or
cashiers' check at a price of $_____ per share and requests that a certificate
(or certificates) in denominations of ______________ (___________) shares of
Common Stock of the Company hereby purchased be issued in the name of and
delivered to the undersigned or such designee of the undersigned and, if such
shares of Common Stock (together with any shares issued upon exercise of other
Warrants or replacement Warrants) shall not include all of the shares of Common
Stock issuable upon exercise of all Warrants represented by such Warrant
Certificate (or if a new or replacement Warrant is otherwise to be provided
pursuant to the Warrant Certificate), that a new or replacement Warrant
Certificate of like tenor for the number of Warrants not being exercised (and
not being surrendered) hereunder be issued in the name of and delivered to the
undersigned, whose address is __________________________.
Dated: __________, 199__.
________________________________
(Signature of Registered Holder)
By:_____________________________
Title:__________________________
Exhibit "D"
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Exhibit "E"
INVESTMENT REPRESENTATION LETTER
(Accredited Investor)
March __, 1998
Trans World Gaming Corp
Trans World Gaming of Louisiana
Xxx Xxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Mr. Andrew Tottenham, President
Dear Mr. Tottenham:
This letter is submitted in conjunction with the execution and delivery
of the First Amended Indenture (herein so called) dated as of March_,1998,
between Trans World Gaming Corp. and Trans World Gaming of Louisiana, Inc.
(collectively, the "Company") and U.S. Trust Company of Texas, N.A. ("Trustee")
and the issuance by the Company to the undersigned of its 12% Senior Bonds Due
2005 (the "Bonds") and certain Warrants as described herein, pursuant to the
terms and conditions contained in the Consent to Amend Indenture, Bonds and
Warrants. The undersigned Purchaser is exchanging its 12% Secured Convertible
Senior Bonds Due 1999 (the "1999 Bonds") for the Bonds, its warrants issued in
association with the 1999 Bonds for the "Amended Warrants" and additional
warrants in exchange for the cancellation of certain conversion rights pursuant
to the terms of the First Amended Indenture (the "Conversion Warrants"). In
order to induce the Company issue the Bonds, the Amended Warrants and the
Conversion Warrants (collectively the "Unit") to the Purchaser, the Purchaser
makes the representations and warranties contained herein.
The Company has informed the Purchaser that the Units have not been
registered with the Securities and Exchange Commission nor with the securities
authorities of any state, and that the Units must be held indefinitely unless
they are subsequently registered under the Securities Act of 1933, as amended,
and the appropriate state securities laws, or an exemption from such
registration is available and counsel to the Purchaser provides an opinion
regarding such exemption which is satisfactory to the Company. The Purchaser
understands that the Company is under no obligation to register the Units or to
comply with any such exemption, except as may be set forth in any binding
agreement between the parties. The Purchaser understands that no federal or
state securities authority has made any finding or determination as to the
fairness of investment in, nor any recommendation or endorsement of, the Units.
The Purchaser hereby represents and warrants to the Company that
Purchaser is purchasing the Units for Purchaser's own account for investment and
not with a view to dividing
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the Units with others, or with a view to or in connection with an offering or
any distribution, and that the Purchaser has no present intention of selling or
otherwise disposing of the Units.
In order to assure the Company with respect to the foregoing, the
Purchaser further represents and warrants the following facts:
(a) Except as specifically noted above, it is the present
intention of the Purchaser to receive and hold the Units for the private
personal investment of the Purchaser for Purchaser's own account. Any sale or
exchange or offer of the Units will be made only if the Units are registered
under the Securities Act of 1933, as amended, or the sale can be made pursuant
to an exemption from the registration requirements of such Act and any
applicable state Securities act and such exception is set forth in an opinion of
Purchaser's counsel satisfactory to the Company.
(b) The Purchaser has no contract, understanding, agreement or
arrangement with any person or entity to sell or transfer to any such persons or
entities, or to anyone, or to have any such person or entity sell for the
Purchaser the Units and the Purchaser is not engaged in, and does not plan to
engage, within the foreseeable future, in any discussion with any person or
entity relating to the sale or transfer of the Units.
(c) Except as specifically noted above, as of the present date,
the Purchaser is not aware of any occurrence, event or circumstance upon the
happening of which Purchaser intends to transfer or sell the Units, or any part
thereof, and the Purchaser does not have any present intention to sell the
Units, or any part thereof, after the lapse of any particular period of time.
Purchaser understands that Purchaser may be required to bear the economic risks
of Purchaser's investment in the Units for an indefinite period of time.
(d) The Purchaser has no present obligation, indebtedness or
commitment and has no knowledge of any circumstances in existence, which would
compel the Purchaser to secure funds by the sale of the Units, nor is the
Purchaser a party to any plans or undertakings requiring funds, which plans or
undertakings can be consummated only by the sale of all or part of the Units.
(e) The Undersigned is an "Accredited Investor" as that term
is defined in Regulation D promulgated by the Securities and Exchange Commission
under the Securities Act of 1933.
(f) The negotiations for the purchase of such Units have been
conducted directly between the Purchaser on the one hand and the Company on the
other. The Purchaser has been given the opportunity to ask questions of, and
receive answers from, the Company and its officers concerning the terms and
conditions of the sale of the Units and other matters pertaining to the
investment in the Company in order for the Purchaser to evaluate the merits and
risks of purchase of the Units. The Purchaser acknowledges that Purchaser has
been furnished all information that Purchaser has requested to the extent that
Purchaser considers necessary and advisable, and such information, along with
the information and advice provided by the Purchaser Representative, is
reasonable upon which to base an investment decision.
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(g) The Purchaser acknowledges Purchaser's understanding that
the offering and sale of the Units is intended to be exempt from registration
under the Securities Act of 1933, as amended, by virtue of Section 4(2) of that
Act, and that the Company is relying upon the representations made by the
Purchasers herein for the purposes of qualifying such offering thereunder.
(h) Investment in the Units is speculative and involves a high
degree of risk of loss by the Purchaser of the Purchaser's entire investment.
The Purchaser has such knowledge and experience in financial and business
matters that Purchaser is capable of evaluating the merits and risks of the
investment in the Units, can bear the economic risk of losing Purchaser's entire
investment, has adequate means for providing for Purchaser's current needs and
personal contingencies, and has no need for liquidity in an investment in the
Units and is capable of evaluating the merits and risks of the investment in the
Units.
The Purchaser further understands that in the event Purchaser should in
fact resell the Units, or any part thereof, within the foreseeable future,
Purchaser may be deemed to be an underwriter, as that term is defined in the
Securities Act of 1933, as amended. The Purchaser further understands and
agrees that the Units cannot be offered for sale, sold or otherwise transferred
on the register of the Company until Purchaser has notified the Company in
writing of Purchaser's intention to do so and unless and until the Company, if
it deems appropriate, has been furnished with an opinion of counsel for the
Purchaser satisfactory to counsel for the Company that such sale or transfer
does not involve a violation of the Securities Act of 1933, as amended, or the
securities laws of any state having jurisdiction. The Purchaser agrees that the
an appropriate restrictive legend may be placed on the certificates evidencing
any Units issued pursuant hereto.
The Purchaser agrees that transfer of the Units may be refused by the
Company or its transfer agent if, in the opinion of counsel for the Company, any
proposed sale or transfer by the Purchaser of the Units would not be in
compliance with the applicable federal and state securities laws. The Purchaser
has not received any offering materials from the Company and the investment is
not made as a result of any general solicitation or advertisements.
Sincerely,
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