NOTE PURCHASE AGREEMENT
This Note Purchase Agreement (the "Agreement") is made this 14th day of
June, 2001 (the "Effective Date") by and between Alexandra Global Investment
Fund I, Ltd., a British Virgin Islands international business company (the
"Seller"), and Acclaim Entertainment, Inc., a Delaware corporation (the
"Company").
RECITALS
WHEREAS, the Seller is the legal and beneficial owner and holder of
certain of the Company's note(s) in the aggregate principal amount of
$6,650,000 (the "Note"), originally issued as part of the Company's private
placement of $50,000,000 aggregate principal amount of 10% Convertible
Subordinated Notes due in 2002 (the "Issuance");
WHEREAS, both the Issuance and the Note are governed by an Indenture
between the Company and IBJ Xxxxxxxxx Bank & Trust Company (the "Trustee"),
dated as of February 26, 1997 (the "Indenture"); and
WHEREAS, the Company wishes to purchase the Note from Seller upon the
terms and subject to the conditions of this Agreement, for consideration (the
"Purchase Price") consisting solely of 2,021,882 shares (the "Purchase Stock")
of the Company's common stock, par value $0.02 per share (the "Common Stock").
AGREEMENT
The parties hereto hereby agree as follows:
1. PURCHASE AND SALE.
(a) PURCHASE AND SALE OF NOTE. The Seller hereby transfers, assigns and
sells to the Company, and the Company hereby purchases from the Seller, the
Note (plus accrued interest thereon) for an aggregate Purchase Price consisting
of the Purchase Stock (the "Note Price").
(b) DELIVERY OF NOTE. The parties acknowledge that the Seller has
instructed Credit Suisse First Boston (Europe) Limited to transfer the Note to
the Trustee, and the Company has in turn instructed the Trustee to cancel the
Note upon consummation of the transactions contemplated hereby.
(c) DELIVERY OF PURCHASE STOCK. The Company has delivered to the Seller
share certificate no. 19756 representing the shares of Purchase Stock, and the
Seller hereby acknowledges receipt thereof.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller hereby
represents and warrants to the Company that:
(a) RIGHT, TITLE AND INTEREST TO NOTE. The Seller is the legal and
beneficial owner of the Note and is in valid possession of all right, title and
interest to the Note, and when
the Note is delivered to the Company pursuant hereto, the Company will acquire
good and marketable title thereto, free and clear of all liens, restrictions,
claims, charges and encumbrances ("Liens") and is not subject to any adverse
claim.
(b) AUTHORIZATION AND VALIDITY OF AGREEMENT. The Seller has the power
and authority and has taken all necessary actions to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and to take all
other actions required to be taken by it pursuant to the provisions hereof.
This Agreement has been duly executed and delivered by the Seller. This
Agreement is legal, valid and binding upon and enforceable against the Seller
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, moratorium, insolvency, fraudulent conveyance, reorganization, or
other similar laws affecting the enforcement of creditors' rights generally.
(c) NO CONFLICT WITH OTHER INSTRUMENTS. The Seller is not subject to any
agreement, instrument, judgment, order, document or other restriction of any
kind that would prevent the consummation of the transactions contemplated by
this Agreement. The consummation of the transactions hereunder will not cause a
breach or default by the Seller under any such agreement, instrument, judgment,
order, or document to which the Seller is a party.
(d) INVESTMENT REPRESENTATIONS. Subject to the registration provisions
set forth in Section 6 of this Agreement, the Seller understands that the
shares of Purchase Stock (and any other shares of Common Stock acquired
hereunder) have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"). Seller also understands that the shares of
Purchase Stock (and such other shares of Common Stock)are being issued to
Seller pursuant to an exemption from registration contained in the Securities
Act based in part upon Seller's representations contained in this Section 2(d)
and Section 2(e). In that regard, the Seller hereby represents and warrants as
follows:
(i) SELLER BEARS ECONOMIC RISK. The Seller has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. The Seller understands and accepts that
it must bear the economic risk of this investment indefinitely unless the
shares of Purchase Stock (and any other shares of Common Stock acquired
hereunder) are registered pursuant to the Securities Act, or an exemption from
registration is available. Section 6 of this Agreement contains Seller's
registration rights for the Purchase Stock and any other shares of Common Stock
issued to Seller pursuant to this Agreement.
(ii) ACQUISITION FOR OWN ACCOUNT. The Seller is acquiring the
shares of Purchase Stock (and any other shares of Common Stock acquired
hereunder) for the Seller's own account for investment only, and not with a
view towards, or for resale in connection with (except as may be set forth in
the "Plan of Distribution" section contained in the Registration Statement (as
hereinafter defined)), their distribution in any transaction that would be in
violation of the securities laws of the United States of America or any State
thereof. Seller understands that the Purchase Stock (and any other shares of
Common Stock acquired hereunder) have not been approved or disapproved by the
Securities and Exchange Commission (the "Commission"),
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or any other federal or state agency, nor has the Commission or any such agency
passed upon the accuracy or adequacy of any of the information provided to the
Seller.
(iii) ACCREDITED INVESTOR. The Seller is an "accredited investor"
within the meaning of Regulation D under the Securities Act. The address of
Seller set forth on the signature page hereto is Seller's current address.
(iv) COMPANY INFORMATION. The Seller has had an opportunity to
discuss the Company's business, management and financial affairs with
directors, officers and management of the Company. The Seller has also had the
opportunity to ask questions of and receive answers from, the Company and its
management regarding the terms and conditions of its investment in the shares
of Purchase Stock.
(v) NO ORAL REPRESENTATIONS. In making the Seller's investment
in the Company, no oral representations or warranties have been made to the
Seller. The Seller acknowledges that it has been advised that no person is
authorized to give any information or to make any statement not contained in
any of the written information provided to the Seller by the Company and that
any information or statement not made by such person must not be relied upon as
having been authorized by the Company or any professional advisors or counsel
thereto. The Seller and the Seller's representatives must rely on their own due
diligence of the Company and any other investigations deemed necessary for the
purpose of determining whether to proceed with the investment in the Company.
(vi) PURCHASE STOCK LEGEND. The Seller agrees that the
certificates evidencing the shares of Purchase Stock (and any other shares of
Common Stock acquired hereunder) bear the following legend restricting their
transferability under the Securities Act:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED ("ACT"). NO SALE, OFFER TO SELL OR TRANSFER OF THE
SHARES REPRESENTED BY THIS CERTIFICATE SHALL BE MADE IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE ACT,
OR AN OPINION OF COUNSEL TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED UNDER THE ACT.
(e) PUBLIC REPORTS. Seller has received, read and reviewed the Company's
Annual Report on Form 10-K (for the year ended August 31, 2000), Quarterly
Report on Form 10-Q (for the quarterly period ended December 2, 2000) and
Quarterly Report on Form 10-Q (for the quarterly period ended March 3, 2001)
and has received a copy of Amendment No. 1 dated June [12], 2001 to the
Company's'Registration Statement on Form S-3 (File No. 333-59048).
(f) INDEMNIFICATION. The Seller shall indemnify and hold harmless each
of the Company, its directors, officers, persons controlling the Company, any
affiliate of the foregoing or any professional advisors thereto, from and
against any and all loss, damage, liability or
expense, including costs and reasonable attorneys' fees, to which any of them
may be put or which they may incur by reason of or in connection with any
misrepresentation made by Seller, or any breach of any of Seller's warranties
in this Agreement; provided, however, that the total amount payable in
indemnity under this Section 2(f) shall not exceed the Note Price.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Seller that:
(a) AUTHORIZATION AND VALIDITY OF AGREEMENT. The Company has the
corporate power and authority and has taken all necessary corporate actions to
execute and deliver this Agreement, to consummate the transactions contemplated
hereby and to take all other actions required to be taken by it pursuant to the
provisions hereof. This Agreement has been duly executed and delivered by the
Company. This Agreement is legal, valid and binding upon and enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by bankruptcy, moratorium, insolvency, fraudulent conveyance,
reorganization, or other similar laws affecting the enforcement of creditors'
rights generally.
(b) NO CONFLICT WITH OTHER INSTRUMENTS. The Company is not subject to
any agreement, instrument, judgment, order, document or other restriction of
any kind that would prevent the consummation of the transactions contemplated
by this Agreement. The consummation of the transactions hereunder will not
cause a breach or default by the Company under any such agreement, instrument,
judgment, order, or document to which the Company is a party.
(c) FULL DISCLOSURE. The Company's Annual Report on Form 10-K (for the
year ended August 31, 2000), Quarterly Report on Form 10-Q (for the quarterly
period ended December 2, 2000), and Quarterly Report on Form 10-Q (for the
quarterly period ended March 3, 2001) and all other filings with the Commission
made by the Company from April 1, 2000 to the date of execution of this
Agreement, complied when filed, in all material respects, with all applicable
requirements of the Securities Act and Securities Exchange Act of 1934, as
amended ("Exchange Act"), and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated or therein
necessary to make the statements contained therein not misleading in light of
the circumstances under which they were made.
(d) VALIDITY OF PURCHASE STOCK. Upon issuance of the Purchase Stock
(and any other shares of Common Stock acquired hereunder) and payment for the
Purchase Stock, the shares of Purchase Stock (and any other shares of Common
Stock acquired hereunder) will be duly and validly issued, fully paid and
nonassessable, with no personal liability attaching to the ownership thereof
and free and clear of all Liens imposed by or through the Company. The shares
of Purchase Stock (and any other shares of Common Stock acquired hereunder) are
not subject to any preemptive rights or any options or other rights of
purchase.
4. RELEASE. By the surrender of the Note and acceptance of the Purchase
Price therefor, the parties hereby release each other from any and all
obligations under the Note and the Indenture, financial and otherwise, and
relinquishes the right to any legal claim against the other party in connection
with either the Note or the Indenture; it being understood that this release
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shall not apply to any claims of the parties hereto arising out of or relating
to this Agreement or such other documents, agreements and instruments delivered
in connection therewith.
5. CONFIDENTIALITY OF INFORMATION. The Seller agrees to hold and to cause
its representatives and affiliates to hold all information received from or
concerning the Company in connection with the transactions contemplated by this
Agreement in confidence, and not to use or disclose any of such information to
any such third party, except to the extent such information may be made
publicly available by the Company or except for disclosure required by law, or
as requested by the Commission.
6. REGISTRATION RIGHTS.
(a) For purposes of this Section 6, the term "Purchase Stock" shall
mean (i) the shares of Common Stock issued to Seller pursuant to Sections 1(a)
and 1(c), and (ii) any securities issued prior to the effectiveness of the
Registration Statement with respect to any share of Common Stock referred to in
(i) and (ii) upon any conversion or exchange thereof, by way of stock dividend
or stock split, in connection with a combination of shares, recapitalization,
reclassification, merger, consolidation or other reorganization. The Company
hereby agrees to use its best efforts to include the Purchase Stock in a
pre-effective amendment to the Registration Statement on Form S-3 (File No.
333-59048) previously filed by the Company on April 16, 2001, or if such
inclusion is not possible to prepare and file with the Commission a
registration statement on Form S-3, or any successor similar form with respect
to the resale of the shares of Purchase Stock, (the "Registration Statement"),
and to use its best efforts to cause the Registration Statement to be declared
effective by the Commission. Notwithstanding the foregoing, if the Registration
Statement has not been declared effective by the Commission on or before August
16, 2001, the Company shall deliver 250,000 additional shares of Common Stock
to the Seller without any additional consideration therefor.
(b) In connection with the registration of the shares of Purchase Stock
described in section 6(a), the Company agrees that it will:
(i) Prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by the Registration Statement and use its best efforts to
cause such Registration Statement to become and remain effective for the period
of distribution set forth herein.
(ii) Furnish to the Seller such number of copies of the Registration
Statement and each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus (including
each preliminary prospectus and summary prospectus) in conformity with the
requirements of the Securities Act, and such documents, if any, incorporated by
reference in such Registration Statement or prospectus, and such other
documents as the Seller may reasonably request in order to facilitate the
disposition of the shares of Purchase Stock owned by it that are included in
such registration.
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(iii) Use its best efforts to register and qualify the securities
covered by the Registration Statement under such other securities or "blue sky"
laws of such jurisdictions as shall be reasonably requested by the Seller, keep
such registration or qualification in effect for so long as the Registration
Statement remains in effect, and do any or all acts and things which may be
reasonably necessary to enable the Seller to consummate the disposition in such
jurisdiction of the shares of Purchase Stock covered by the Registration
Statement; provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business, to subject
itself to taxation, or to file a general consent to service of process in any
such states or jurisdictions.
(iv) Use its best efforts (A) to list all securities covered by such
Registration Statement on any securities exchange on which any of such
securities shall then be listed or (B) in the event such securities shall not
be so listed to have such registrable stock qualified for inclusion on The
Nasdaq Small Cap Market System, if such securities are then so qualified, or to
have such securities qualified for inclusion on The Nasdaq Over-the-Counter
Bulletin Board.
(v) Furnish to the Seller an opinion of counsel representing the
Company for the purposes of such registration, dated the effective date of such
registration, addressed to the Seller, stating that such Registration Statement
shall have become effective under the Securities Act and that (1) to the best
knowledge of such counsel, no stop order suspending the effectiveness thereof
shall have been issued and no proceedings for that purpose shall have been
instituted or shall be pending or contemplated under the Securities Act, and
(2) the Registration Statement, the related prospectus and each amendment or
supplement thereof comply as to form in material respects with the requirements
of the Securities Act (except that such counsel need not express any opinion as
to financial statements or other financial data continued therein).
(vi) For purposes of this Section 6, the period of distribution of
registrable stock under the Registration Statement shall be deemed to extend
until the earlier of the sale of all registrable stock covered thereby or one
(1) year after the effective date thereof, provided, however, that in the case
of any registration of registrable stock on Form S-3 which shall be intended to
be offered on a delayed or continuing basis, such one-year period shall be
extended if necessary, to keep the Registration Statement effective until such
registrable stock shall be sold, provided that Rule 415 under the Securities
Act or any successor rule under the Securities Act permits an offering on a
delayed or continued basis.
(vii) Notify the Seller and (if requested by the Seller) confirm such
advice in writing, (A) when or if the prospectus or any prospectus supplement
or post-effective amendment has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when the same has
become effective, (B) of any request by the Commission for amendments or
supplements to the Registration Statement or the prospectus or for additional
information, (C) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose, (D) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the shares
of Purchase Stock for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose, and (E) of the happening of any event as a
result
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of which the prospectus included in the 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.
(viii) If any fact contemplated by clause (E) of paragraph (vii),
above, shall exist, prepare a supplement or post-effective amendment to the
Registration Statement or the related prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchaser of the shares of the Purchase Stock the prospectus
will not contain an untrue statement of material fact or omit to state any
material fact necessary to make the statements therein not misleading.
(ix) Use best efforts to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement at the earliest
possible moment.
(x) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
shareholders, as soon as reasonably practicable, an earnings statement covering
the period of at least 12 months, but not more than 18 months, beginning with
the first month of the first fiscal quarter after the effective date of such
Registration Statement, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 under the Securities Act.
(xi) Notwithstanding the foregoing, all expenses incurred in
connection with a registration pursuant to this Agreement (excluding
underwriters' and brokers' discounts and commissions), including, without
limitation all federal and state "blue sky" registration and qualification
fees, printers' and accounting fees, and fees and disbursements of counsel for
the Company, shall be borne by the Company.
(c) OBLIGATION OF SELLER TO FURNISH INFORMATION. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Agreement that the Seller shall furnish to the Company in writing such
information regarding itself, the shares of Purchase Stock and Common Stock it
then holds, and the intended method of disposition of such shares as shall
reasonably be required to timely effect the registration of the shares of
Purchase Stock.
(d) DEFERRAL. If the Company shall furnish to the Seller a certificate
signed by the President or Chief Executive Officer of the Company (a "Demand
Deferral Notice") stating that, in the good faith judgment of the Board of
Directors of the Company, and pursuant to a resolution of the Board of
Directors, it would be seriously detrimental to the Company and its
stockholders for such Registration Statement to be filed and it is therefore
essential to defer the filing of such Registration Statement, then the Company
shall have the right to defer such filing for a period of not more than 90
calendar days after the date such Demand Deferral Notice is furnished to the
Seller; provided, however, that (i) the Company may not utilize this right more
than once and (ii) the Demand Deferral Notice shall certify that the Board of
Directors of the Company has discussed the issues involved and resolved to send
the Demand Deferral Notice to Seller. Notwithstanding the foregoing, if such a
Demand Deferral Notice is delivered to Seller,
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the Company shall continue to be obligated to deliver such additional shares as
described in, and in accordance with, Section 6(a).
(e) DISCONTINUANCE OF A DISPOSITION OF REGISTRABLE SHARES. If any
shares of Purchase Stock are registered for sale under the Securities Act, the
Seller shall cease any distribution of such shares under the Registration
Statement not more than once in any twelve-month period, for up to 90 calendar
days each, upon the request of the Company if: (x) such distribution would
require the public disclosure of material non-public information concerning any
transaction or negotiations involving the Company or any of its affiliates
that, in the good faith judgment of the Company's Board of Directors pursuant
to a resolution of the Board of Directors, would materially interfere with such
transaction or negotiations, (y) such distribution would otherwise require
premature disclosure of information that, in the good faith judgment of the
Company's Board of Directors pursuant to a resolution of the Board of
Directors, would adversely affect or otherwise be detrimental to the Company or
(z) the Company proposes to file a registration statement under the Securities
Act for the offering and sale of securities for its own account in an
underwritten offering and the managing underwriter therefor shall advise the
Company in writing that in its opinion the continued distribution of the
Purchase Stock would adversely affect the success of the offering of the
securities proposed to be registered for the account of the Company. The
Company shall promptly notify the Seller at such time as (i) such transactions
or negotiations have been otherwise publicly disclosed or terminated, (ii) such
non-public information has been publicly disclosed or counsel to the Company
has determined that such disclosure is not required due to subsequent events or
(iii) the completion of such underwritten offering.
(f) "MARKET STAND-OFF" AGREEMENT. If in the opinion (a written copy of
which shall be provided to Seller) of the managing underwriter for an offering
of securities by the Company, market conditions require limitations on the
number of shares being sold by the Company in the public offering requested by
the Company, the Seller agrees that it will refrain from selling or otherwise
transferring or disposing of any shares of Purchase Stock or other shares of
stock of the Company that it then owns (other than to stockholders, or
affiliates of the Seller or to investment advisor to Seller who agree to be
similarly bound) for a period of up to 90 calendar days following the effective
date of the first Registration Statement of the Company filed under the
Securities Act in connection with a public offering of the Common Stock after
the date of this Agreement (other than a registration on Form S-4 or Form S-8).
In order to enforce the foregoing covenant, the Company shall have the right to
place restrictive legends on the certificates representing the shares of
Purchase Stock and to impose stop transfer instructions with respect to the
shares of Purchase Stock until the end of such period.
7. INDEMNIFICATION. In connection with the Registration Statement
described in section 6 above, or any Registration Statement prepared in
connection with this Agreement:
(a) BY THE COMPANY. To the extent permitted by law, the Company will
indemnify and hold harmless the Seller, its investment advisor, any underwriter
(as defined in the Securities Act), and all of their respective officers,
managers, members, directors, shareholders, agents, employees or other control
persons ("Related Persons") against any actions, costs, losses, claims, damages
or liabilities ("Claims or Damages"), insofar as such Claims or Damages (or
actions in respect thereto) arise out of or are based upon the following
actions by the Company
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or its Related Persons: (i) any untrue statement or alleged untrue statement of
a material fact contained in a Registration Statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto; (ii) the omission or alleged omission to state therein
a material fact required to be stated therein, or necessary to make the
statements therein not misleading; or (iii) any violation or alleged violation
by any party or its agents of the Securities Act, the Exchange Act, any federal
or state securities law, or any rule or regulation promulgated under any of the
foregoing in connection with the offering covered by such Registration
Statement (collectively, "Violations"). The Company will reimburse the Seller
and each of its Related Persons for any legal or other expenses they or any of
them may incur in connection with investigating or defending any such Claims or
Damages; provided, however, that the indemnity agreement contained in this
Section 7(a) shall not apply to amounts paid in settlement of any such Claims
or Damages if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld or delayed), nor shall the
Company be liable in any such case for any such Claims or Damages to the extent
that they arise out of or are based upon a Violation that occurs in reliance
upon and in conformity with written information furnished expressly for use in
connection with such registration by the Seller or any of its Related Persons.
(b) BY SELLER. To the extent permitted by law, the Seller will indemnify
and hold harmless the Company, any underwriter (as defined in the Securities
Act), and all of their respective Related Persons, against any Claims or
Damages they or any of them may incur insofar as such Claims or Damages (or
actions in respect thereto) arise out of or are based upon any Violation of or
by the Seller or its Related Persons, in each case to the extent (and only to
the extent) that such Violation occurs in connection with written information
furnished by the Seller expressly for use in connection with a registration;
and the Seller will reimburse any legal or other expenses reasonably incurred
by the Company, any underwriter and any of their respective Related Persons, in
connection with investigating or defending any Claim or Damage; provided,
however, that the indemnity agreement contained in this subsection 7(b) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Seller, which consent shall not be unreasonably withheld or delayed; and
provided further, that the total amounts payable in indemnity by the Seller
under this Section 7(b) in respect of any Violation shall not exceed the net
proceeds received by the Seller in the registered offering out of which such
Violation arises.
(c) CONTRIBUTION. If the indemnification provided for in this Section 7
is unavailable to an indemnified party under Section 7(a) or Section 7(b)
hereof (other than by reason of exceptions provided in those Sections) in
respect of any Claims or Damages referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Claims or Damages in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and of the Seller on the other in
connection with the statements or omissions which resulted in such Claims or
Damages, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of the Seller on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or by the
Seller and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
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amount paid or payable by a party as a result of the Claims or Damages referred
to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim.
The Company and the Seller agree that it would not be just and equitable
if contribution pursuant to this Section 7(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 7(c), the Seller
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Purchase Stock sold by the Seller and distributed
to the public exceeds the amount of any damages which the Seller has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No Person (as defined in Section 2 of the
Securities Act) guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
(d) NOTICE. Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 7,
deliver to the indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential conflict of interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, to the extent that it is materially
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
7, but such a failure will not relieve it of any liability that it might have
to any indemnified party otherwise than under this Section 7.
(e) DEFECT ELIMINATED IN FINAL PROSPECTUS OR SUPPLEMENT OR POST-
EFFECTIVE AMENDMENT. The foregoing indemnity agreements of the Company and the
Seller are subject to the condition that, insofar as they relate to any
Violation made (x) in a preliminary prospectus but eliminated or remedied in
the amended prospectus on file with the Commission at the time the Registration
Statement in question becomes effective or in the amended prospectus filed with
the Commission pursuant to Commission Rule 424(b) (the "Final Prospectus") or
(y) in the Final Prospectus but eliminated or remedied in a supplement or
post-effective amendment contemplated by Section 6(viii) hereof, as applicable,
such indemnity agreement shall not inure to the benefit of any person if a copy
of the Final Prospectus or such supplement or post-effective amendment, as
applicable, was furnished to the indemnified party and was not furnished to the
person asserting the loss, liability, claim or damage at or prior to the time
such action is required by the Securities Act.
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8. SURVIVAL. The obligations of the Company and the Seller under Sections
6 and 7 shall survive the completion of any resale of Purchase Stock by the
Seller in a Registration Statement. The representations and warranties of the
parties under Sections 2 and 3 (except for the representation in Section 3(d)
which shall survive indefinitely) hereof, respectively, shall survive for a
period of one year from the date hereof.
9. MISCELLANEOUS.
(a) This Agreement shall bind the parties, their respective heirs,
administrators, executors, successors and assigns.
(b) Each party hereto will, upon request, execute and deliver any
additional documents deemed by the other party to be necessary or desirable to
complete the transactions contemplated hereby.
(c) All prior or contemporaneous agreements, contracts, promises,
representations and statements, if any, between the parties hereto pertaining
to the transactions contemplated hereby, are merged into this Agreement. This
Agreement sets forth the entire understanding between the parties, and there
are no terms, conditions, representations, warranties or covenants other than
those contained herein.
(d) Any notice required or permitted by this Agreement shall be in
writing and shall be deemed sufficient upon receipt, when delivered personally
or by courier, overnight delivery service or confirmed facsimile, or 48 hours
after being deposited in the U.S. mail as certified or registered mail with
postage prepaid, if such notice is addressed to the party to be notified at
such party's address or facsimile number as set forth on the signature page
hereto or as subsequently modified by written notice.
(e) This Agreement, and any provision hereof, may not be amended,
modified, released or discharged, in whole or in part, except by a writing
signed by the parties hereto.
(f) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall constitute
one instrument.
(g) The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting
this Agreement.
(h) This Agreement shall be governed by the laws of the State of New
York, without regard to its principles of conflict of laws.
(i) Except as otherwise provided in Section 6, the Seller will bear all
costs, fees and expenses incurred by it in connection with the negotiation,
documentation, and/or enforcement of its rights under this Agreement and any
related matters or documents.
[Signature Page Follows]
-11-
The parties have executed this Note Purchase Agreement as of the date
first written above.
COMPANY:
ACCLAIM ENTERTAINMENT, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
Address: Xxx Xxxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Facsimile No.:
SELLER:
ALEXANDRA GLOBAL INVESTMENT FUND I, LTD.
By: /s/ Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx Xxxxxxxxx
Title: Investment Manager
Address: Citco Building
Wickhams Cay
X.X. Xxx 000, Xxxx Xxxx,
Xxxxxxx, Xxxxxxx Xxxxxx Xxxxxxx
Facsimile No.: (000-0) 000-0000
