EXHIBIT 5
[EXECUTION COPY]
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WARRANT AGREEMENT
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THIS WARRANT AGREEMENT (this "Agreement") is made and entered into as of
May 13, 1997 between Sky Games International Ltd., a Bermuda exempted company
("SGI"), and Xxxxxx'x Interactive Investment Company, a Nevada corporation (the
"Warrantholder"). This Agreement is made in connection with the issuance of
warrants to purchase shares of common stock, par value Cdn. $.01 per share, of
SGI (such shares of SGI or its successor pursuant to the Amalgamation of SGI and
SGI Holding Corporation Limited, a Bermuda exempted company, are referred to
herein as the "Shares") by the Warrantholder as set forth on Exhibit A attached
hereto. The Warrant to be issued to the Warrantholder pursuant to this
Agreement hereinafter may be referred to as the "Warrant." The Warrant entitles
the Warrantholder to purchase up to the number of Shares set forth herein at the
Exercise Price (as defined in Section 6 hereof). There shall be no change in the
number of Shares issuable pursuant to this Warrant except as provided in Section
7 hereof. Except where otherwise noted, all monetary amounts set forth herein
are denominated in United States currency.
Section 1. Form of Warrant. The Warrant shall be represented by a
certificate (the "Warrant Certificate") which shall be in the form of Exhibit B
attached hereto, including the exercise form comprising part of Exhibit B.
Section 2. Transfer or Exchange of Warrant.
2.1 Warrant Register. SGI shall number and register the Warrant
Certificate in a Warrant register. SGI shall be entitled to treat the registered
owner of the Warrant as the owner in fact thereof for all purposes and shall not
be bound to recognize any equitable or other claim to or interest in such
Warrant on the part of any other person.
2.2 Transfer. The Warrant shall be transferable only on the books
of SGI, maintained at its principal office, upon delivery of the Warrant
Certificate representing the Warrant duly endorsed by the Warrantholder or by
his duly authorized attorney or representative, or accompanied by proper
evidence of succession, assignment or authority to transfer. Upon each requested
registration of transfer and subject to the restrictions on transfer set forth
in Section 13 hereof, SGI shall deliver a new Warrant Certificate to the person
entitled thereto at the same Exercise Price, with the same Termination Date (as
hereinafter defined) and otherwise of like tenor as the Warrant so transferred
or assigned.
Section 3. Terms of Warrant; Exercise of Warrant.
3.1 Terms of Warrant. Subject to the terms and conditions of this
Agreement, the Warrantholder shall have the right and option to purchase from
SGI the number of validly issued, fully paid and nonassessable Shares set forth
on Exhibit A attached hereto which such Warrantholder may at that time be
entitled to purchase on exercise of the Warrant. The Warrant may be exercised in
whole at any time or in part from time to time on or after the date of the
consummation of the amalgamation (the "Subsidiary Amalgamation") of SGI Holding
Corporation Limited, a Bermuda exempted company, and Interactive Entertainment
Limited, a Bermuda exempted company (the "Commencement Date"). The right to
exercise such Warrant shall terminate without further notice at 5:00 p.m.
Memphis time on the ninetieth (90th) day after the Commencement Date (the
"Termination Date"). Closing of such exercise shall be subject to satisfaction
of the conditions set forth in Section 3.3 hereof.
3.2 Method of Exercise.
(a) Upon compliance with the terms and conditions of this
Agreement, the Warrant to purchase represented by the Warrant shall be
exercisable at the election of the Warrantholder, either in full or from time to
time in part. In the event that the Warrant is exercised with respect to fewer
than all of the Shares or other securities purchasable on such exercise at any
time prior to the Termination Date, a new Warrant Certificate evidencing the
remainder of the Warrant shall be issued by SGI at the same Exercise Price, with
the same Termination Date, and otherwise of like tenor as the Warrant that has
been partially exercised. SGI shall deliver the new Warrant Certificate pursuant
to the provisions of Sections 1 and 2 hereof.
(b) The Warrant shall be exercised by surrender to SGI, at its
principal office, of the Warrant Certificate evidencing the Warrant, together
with a duly completed and executed form of election to purchase attached
thereto, payment to SGI of the Exercise Price for all of the Shares for which
the Warrant is then exercised and satisfaction of the other conditions set forth
in Section 3.3. Payment of the Aggregate Exercise Price (as hereinafter defined)
shall be made in cash, certified bank check, cashier's check, wire transfer or
otherwise in immediately available funds. All Warrant Certificates surrendered
upon exercise of Warrants shall be canceled by SGI.
3.3 Issuance of the Shares. Within ten (10) business days after
all of (i) the surrender of the Warrant Certificate, (ii) payment of the
Aggregate Exercise Price and (iii) delivery of the Exercise Form attached to the
Warrant Certificate, SGI shall issue and cause to be delivered to the
Warrantholder a certificate for the number of Shares so purchased upon the
exercise of the Warrant together with a Warrant Certificate for the portion of
the Warrant not exercised, if any. All Shares will, upon issuance, be validly
issued, fully paid and nonassessable, and free from all taxes, liens and charges
with respect to the issuance thereof (other than income taxes).
Section 4. Mutilated or Missing Warrant Certificate. If any Warrant
Certificate is mutilated, lost, stolen or destroyed, SGI shall, in the case of a
mutilated Warrant Certificate, issue a new Warrant Certificate of like tenor
upon surrender of such mutilated Warrant Certificate, and in case of the loss,
theft or destruction of any Warrant Certificate, at the request of the
Warrantholder, issue and deliver in exchange and substitution for the
certificate lost, stolen or destroyed, a new Warrant Certificate of like tenor
and representing an equivalent right or interest, but only upon receipt of
evidence reasonably satisfactory to SGI of such loss, theft or destruction of
such Warrant Certificate and reasonable and customary indemnity and bond, if
requested, also reasonably satisfactory to SGI. An applicant for such a
substitute Warrant Certificate also shall comply with such other reasonable
regulations and pay such other reasonable charges as SGI may prescribe to cover
SGI's expenses in processing the mutilated Warrant Certificate or replacing the
lost, stolen or destroyed Warrant Certificate.
Section 5. Certain Covenants.
5.1 Reservation of Shares. SGI shall provide for the authorization
and reservation of Shares for issuance upon the exercise of the Warrant.
5.2 No Impairment. SGI shall not, by amendment of its Memorandum of
Association or Bye-Laws or through reorganization, recapitalization, transfer of
assets, consolidation, merger, dissolution, issuance or sale of securities or
any other agreement or voluntary act, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by SGI.
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Section 6. Exercise Price. The Shares shall be purchasable upon the
exercise of the Warrant at a price per Share of SGI equal to $1.00 per Share.
The Exercise Price shall be subject to adjustments required pursuant to Section
7 hereof. The Exercise Price multiplied by the number of Shares issuable upon
exercise of the Warrant may be referred to herein as the "Aggregate Exercise
Price."
Section 7. Adjustment of Exercise Price and Number of Interests. The
number and kind of securities purchasable upon the exercise of each Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
happening of the events set forth in this Section 7.
7.1 Mechanical Adjustments--SGI.
(a) If SGI shall at any time prior to the exercise of the
Warrant issued hereby (i) pay a dividend in Shares or makes a pro rata
distribution to all of its shareholders in Shares, (ii) subdivide its
outstanding Shares into a greater number of Shares, or (iii) combine its
outstanding Shares into a smaller number of Shares, the Exercise Price in effect
immediately after the record date for such dividend or distribution or the
effective date of such subdivision or combination shall be adjusted so that it
shall equal the price determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, the numerator of which shall be the
number of Shares outstanding immediately before such dividend, distribution,
subdivision or combination, and the denominator of which shall be the number of
Shares outstanding immediately after such dividend, distribution, subdivision or
combination. Such adjustments shall be made successively whenever any event
specified above shall occur.
(b) If SGI shall at any time prior to the exercise of the
Warrant issued hereby declare a distribution (other than a distribution
consisting solely of Shares) or otherwise distribute pro rata to all of its
shareholders any assets, cash, property, rights, evidences of indebtedness or
securities (other than Shares), a Warrantholder holding the unexercised Warrant
shall thereafter be entitled, in addition to the Shares properly receivable upon
the exercise thereof, to receive at no additional cost, upon the exercise of the
Warrant, the same property, assets, cash, rights, evidences of indebtedness or
securities that it would have been entitled to receive at the time of such
distribution as if the Warrant had been exercised immediately prior to such
distribution.
(c) No adjustment need be made in connection with the issuance
of any Shares or other securities of SGI or a successor to the business of SGI
in a bona fide public offering pursuant to a firm commitment underwriting
managed by a nationally recognized investment banking firm which is a member of
the National Association of Securities Dealers, Inc. or for a price determined
to be reasonable by the Board of Directors of SGI.
(d) In case any event shall occur as to which the provisions of
Section 7.1 are not strictly applicable but the failure to make any adjustment
would not fairly protect rights represented by the Warrant in accordance with
the essential intent and principles of such sections, then, in each case, SGI
shall appoint a nationally recognized firm of certified public accountants
(which may be the regular auditors of SGI), which shall give their opinion upon
the adjustment, if any, on a basis consistent with the essential intent and
principles established in Section 7, necessary to preserve, without dilution,
the purchase rights represented by the Warrant. Upon receipt of such opinion,
SGI will promptly mail a copy thereof to the holder of the Warrant and shall
make the adjustments described therein.
7.2 Notice of Adjustment. Whenever the number of Shares
purchasable upon the exercise of the Warrant or the Exercise Price of such
Shares is to be adjusted, as herein provided, SGI shall give
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reasonable advance notice to the Warrantholder (at least 20 days prior to the
date on which the event requiring adjustment is expected to occur) by first
class mail, postage prepaid, with a certificate of SGI, confirmed as to
mathematical accuracy by a firm of independent certified public accountants
selected by SGI (who may be the regular auditors employed by SGI), setting forth
the number of Shares purchasable upon the exercise of the Warrant and the
Exercise Price of such Shares after such adjustment and a brief statement of the
facts requiring such adjustment and the computation by which such adjustment was
made.
7.3 Reorganizations. In case of any capital reorganization, other
than in the cases referred to in Section 7.1 hereto, or the consolidation or
merger of SGI with or into another entity (other than a merger or consolidation
in which SGI is the continuing entity and which does not result in any
reclassification of the outstanding Shares or the conversion of such outstanding
Shares into shares of stock or other securities or property), or the sale of the
property of SGI as an entirety or substantially as an entirety (collectively
such actions hereinafter being referred to as "Reorganizations"), there shall
thereafter be deliverable upon exercise of a Warrant (in lieu of the number of
Shares theretofore deliverable) the number of shares of stock or other
securities or property to which a holder of the number of Shares which would
otherwise have been deliverable upon the exercise of such Warrant would have
been entitled upon such Reorganization if such Warrant had been exercised in
full immediately prior to such Reorganization. In case of any Reorganization,
appropriate adjustment, as reasonably determined by a nationally recognized
independent certified public accounting firm selected by SGI (who may be the
regular auditors employed by SGI), shall be made in the application of the
provisions herein set forth with respect to the rights and interests of the
Warrantholder so that the provisions set forth herein shall thereafter be
applicable, as nearly as possible, in relation to any shares or other property
thereafter deliverable upon exercise of the Warrant. SGI shall not effect any
such Reorganization unless upon or prior to the consummation thereof the
successor entity, or if SGI shall be the surviving entity in any such
Reorganization and is not the issuer of the shares of stock or other securities
or property to be delivered to holders of Shares outstanding at the effective
time thereof, then such issuer shall assume by written instrument the obligation
to deliver to the Warrantholder such shares of stock, securities, cash or other
property as the Warrantholder shall be entitled to purchase in accordance with
the foregoing provisions. No provision of this Warrant and no right or option
granted or conferred hereunder shall in any way limit, affect or abridge the
exercise by SGI of any of its corporate rights or powers to recapitalize, amend
its Memorandum, reorganize, consolidate or merge with or into another
corporation, or to transfer all or any part of its property or assets, or the
exercise of any other of its corporate rights and powers.
7.4 Statement on Warrants. Irrespective of any adjustments in the
Exercise Price or the number or kind of Shares purchasable upon the exercise of
the Warrants, Warrants theretofore or thereafter issued may continue to express
on their face the same price and number and kind of Shares as are stated in the
Warrant initially issuable pursuant to this Agreement and such shall not in any
way affect the adjusted Exercise Price or number of Shares issuable upon
exercise.
Section 8. SGI's Representations and Warranties. SGI hereby represents and
warrants to each Warrantholder as of the date hereof as follows:
8.1 Status. SGI is an exempted company duly formed, validly
existing and in good standing under the laws of Bermuda.
8.2 Power. SGI has all requisite corporate power and authority to
own and operate its properties, to carry on its business as now conducted, and
to enter into this Agreement and to carry out its obligations under this
Agreement. All corporate or similar action required to be taken by SGI in
connection with the execution, delivery and performance of this Agreement has
been duly taken.
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8.3 No Conflicts. Neither the execution and delivery of this
Agreement nor the performance by SGI of any of SGI's obligations hereunder, will
(i) conflict with, result in a breach of, or constitute (with notice, lapse of
time or both) a default under, or result in the creation or imposition of any
lien, charge, security interests or other encumbrance upon any of SGI's property
pursuant to the terms of any indenture, mortgage, deed of trust, security
agreement, loan agreement, license, lease, undertaking or any other agreement,
instrument or document to which SGI is a party, by which SGI is bound or to
which any of SGI's properties are subject, the conflict with, breach of or
default under, or the creation or imposition of which, would have an adverse
effect on the ability of SGI to fully and timely perform any of its obligations
under this Agreement, or (ii) violate the Memorandum of Association or Bye-Laws,
or (iii) violate any provision of any federal, state or local law, rule or
regulation to which SGI is subject, or any judgment, writ, decree, injunction or
order to which SGI is a party or by which SGI is bound, which violation would
have an adverse effect on the ability of SGI to perform its obligations
hereunder, or a material adverse effect on the business, assets or financial
condition of SGI.
8.4 Binding Obligation. This Agreement constitutes the legal, valid
and binding obligation of SGI, enforceable in accordance with its terms.
Section 9. Warrantholder's Representations and Warranties. The holder of
this Warrant, by the acceptance hereof, represents that it is acquiring this
Warrant and Shares purchasable upon exercise of the Warrant for its own account
for investment and not with a view to, or for sale in connection with, any
distribution hereof or of any of the Shares or other securities issuable upon
the exercise thereof, and not with any present intention of distributing any of
the same. Upon exercise of this Warrant, the holder shall, if requested by SGI,
confirm in writing, in a form satisfactory to SGI, that Shares purchasable upon
exercise of the Warrant so purchased are being acquired solely for the holder's
own account and not as a nominee for any other party, for investment, and not
with a view toward distribution or resale and that such holder is an Accredited
Investor. If such holder cannot make such representations because they would be
factually incorrect, it shall be a condition to such holder's exercise of the
Warrant that SGI receive such other representations as SGI considers reasonably
necessary to assure SGI that the issuance of its securities upon exercise of the
Warrant shall not violate any United States or state securities laws.
Section 10. Information to Warrantholder. In addition to any other rights
to notice pursuant to this Agreement, SGI shall provide the following
information to the Warrantholder after the Commencement Date:
(i) information regarding any distribution by SGI to the
owners of any equity securities of SGI;
(ii) information regarding the granting to owners of any
equity securities of SGI, including holders of Shares, of any rights to
subscribe for or purchase any equity securities of SGI since the date of this
Agreement;
(iii) information regarding any amendment to the Memorandum of
Association or Bye-Laws of SGI since the date of this Agreement;
(iv) information regarding any proposed reclassification or
change in any Shares or any consolidation, merger, or sale of substantially all
of the assets, property or business of SGI; or
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(v) such written information, documents and reports as have
been delivered to all shareholders of SGI since the date of this Agreement; and
(vi) such additional information as the Warrantholder may
reasonably request.
Section 11. Warrantholder Not a Shareholder. The Warrantholder, as the
holder of the Warrant, shall not be, and shall not have any of the rights or
privileges of, a Shareholder of SGI with respect to the Shares purchasable
hereunder, unless and until the Shares shall have been issued and delivered to
such Warrantholder in accordance with this Warrant Agreement.
Section 12. Notices. Any notices or other communications required or
permitted to be given hereunder shall be in writing and either delivered in
person, sent by courier, sent by mail, registered or certified mail, postage
prepaid, return receipt requested, or sent by facsimile transmission and
addressed to SGI at 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X
0X0, Canada, Attn: Xxxxxxx X. Xxxxx, facsimile no.: 604-687-8678 (with a copy to
Altheimer & Xxxx, 00 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
Attn: Xxxxxx X. XxXxxx, facsimile no.: 312-715-4800) and to the Warrantholder as
set forth on the signature page to this Agreement, or such other address as
either party may from time to time specify in writing to the other in the manner
aforesaid. Such notices or communications shall be deemed delivered upon
personal or courier delivery or refusal of such delivery, five (5) business days
after being sent by mail, as set forth above or the first business day following
confirmed transmission if sent by facsimile transmission; provided such notice
or other communication is also mailed in accordance with the foregoing
requirements within two (2) days of delivery by facsimile.
Section 13. Successors and Assigns/Assignment.
13.1 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their permitted
successors and assigns hereunder; provided, however, that neither this Agreement
nor the Warrant Certificate may be sold, assigned or transferred by any
Warrantholder (i) in the absence of an effective registration statement or an
exemption from such requirement under the Act, qualification or exemption from
such requirement under any applicable state laws or an opinion of counsel in
form and substance satisfactory to SGI that registration is not required under
the Act and under any applicable state laws; (ii) except as permitted pursuant
to and in compliance with the applicable gaming laws and regulations; and (iii)
with prior consent of SGI.
13.2 Assignment. Neither this Agreement, any Warrant nor any
Warrant Certificate may be sold, assigned or otherwise transferred, except to an
Affiliate of Warrantholder, unless SGI shall have consented thereto. It shall be
a condition to such assignment that the assignee execute a copy of this
Agreement. SGI may not be sell, assign or otherwise transfer this Agreement,
except to an Affiliate of SGI, unless the Warrantholder shall have consented
thereto. As used herein, an "Affiliate" is any person or entity which controls a
party to this Agreement, which that party controls, or which is under common
control with that party. "Control" means the power, direct or indirect, to
direct or cause the direction of the management and policies of a person or
entity through voting securities, contract or otherwise.
Section 14. Fractional Shares. Fractional Shares shall not be issued to
the Warrantholder on exercise of any Warrant. In lieu thereof, the Warrantholder
shall receive the nearest whole number of Shares to which the Warrantholder is
entitled on such exercise.
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Section 15. Applicable Law. This Agreement, the Warrant and the Warrant
Certificate issued hereunder shall be governed by and construed in accordance
with the laws of the State of Tennessee, without giving effect to the conflicts
of laws principles thereof.
Section 16. No Third Party Benefits. This Agreement shall not be construed
to give to any person or entity, other than SGI and the Warrantholder, any legal
or equitable right, remedy or claim under this Agreement, the Warrant or the
Warrant Certificates, and this Agreement, the Warrants and the Warrant
Certificates shall be for the sole and exclusive benefit of SGI and the
Warrantholder.
Section 17. Counterparts. This Agreement may be executed in any number of
counterparts or duplicate originals, each of which shall be an original, but all
of which together shall constitute one instrument.
Section 18. Entire Understanding. This Agreement constitutes the entire
agreement between the parties hereto with respect to the matters set forth
herein and supersedes all prior agreements, understandings and arrangements with
respect to the matters herein. This Agreement cannot be modified except by a
written instrument signed by SGI and the Warrantholder.
Section 19. Attorneys' Fees. If an action is instituted by any of the
parties hereto in any court of law or equity pertaining to the interpretation or
enforcement of any of the provisions of this Agreement, the prevailing party
shall be entitled to recover, in addition to any judgment or decree rendered
therein, all court costs and reasonable attorneys' fees and expenses.
Section 20. Specific Performance/Cumulative Remedies. SGI acknowledges
that, if it breaches any of its obligations hereunder, the Warrantholder shall
suffer irreparable injury for which damages shall be insufficient, and that the
Warrantholder, individually or as a group, shall have the right of specific
performance of such obligations. Notwithstanding the foregoing, the remedies
available to the Warrantholder in the event of a breach by SGI of this Agreement
shall be cumulative of those at law, equity or otherwise.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be duly executed as of the day and year first above
written.
SKY GAMES INTERNATIONAL LTD.
By: /s/ Xxxxxxx X. Xxxxx
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Name:Xxxxxxx X. Xxxxx
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Title:President
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XXXXXX'X INTERACTIVE INVESTMENT COMPANY
By: /s/ Xxxx X. Xxxxxx
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Name:Xxxx X. Xxxxxx
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Title:Senior Vice President
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Address: 0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Facsimile: 000-000-0000
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EXHIBIT A
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WARRANTHOLDER
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Name Shares Issuable on Exercise
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Xxxxxx'x Interactive Investment The number of Shares equal to
Company 1,000,000 Shares less the number of
Shares issued pursuant to conversion
of that certain Convertible Secured
Promissory Note dated the date hereof
issued under that certain Funding
Agreement dated the date hereof
between SGI and IEL, as borrower, and
Warrantholder, as lender.
If SGI shall at any time prior to the
exercise of the Warrant (i) pay a
dividend in Shares or makes a pro
rata distribution to all of its
Shareholders in Shares, (ii)
subdivide its outstanding Shares into
a greater number of Shares, or (iii)
combine its outstanding Shares, the
Exercise Price in effect immediately
after the record date for such
dividend shall be adjusted so that it
shall equal the price determined by
multiplying the Exercise Price in
effect immediately prior thereto by a
fraction, the numerator of which
shall be the number of Shares
outstanding immediately before such
dividend, distribution, subdivision
or combination. Such adjustments
shall be made successively whenever
any event specified shall occur.
A-1
EXHIBIT B
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WARRANT CERTIFICATE
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No. 1
THE SECURITIES EVIDENCED BY THIS CERTIFICATE AND THE SECURITIES THAT MAY BE
ACQUIRED UPON ITS EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER ANY STATE SECURITIES LAWS.
NEITHER THIS WARRANT NOR THE SECURITIES THAT MAY BE ACQUIRED UPON ITS EXERCISE
MAY BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER THE ACT AND QUALIFICATION UNDER ANY
APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM, OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO SGI THAT SUCH REGISTRATION OR QUALIFICATION
OR BOTH IS NOT REQUIRED.
WARRANT TO PURCHASE SHARES OF
SKY GAMES INTERNATIONAL LTD.
VOID AFTER 5:00 P.M. MEMPHIS TIME
ON
____________ __, 1997
This Warrant Certificate certifies that, for value received, Xxxxxx'x
Interactive Investment Company, a Nevada corporation (the "Warrantholder"), the
registered holder hereof, or its permitted assigns, is entitled to purchase
______________ from SKY GAMES INTERNATIONAL, a Bermuda exempted company ("SGI"),
the Shares of SGI or such other number of Shares as the Warrantholder then is
entitled to purchase pursuant to the Warrant Agreement (as hereinafter defined).
The right granted herein may be exercised at the times and in the amounts on and
after the Commencement Date (as such date is defined in the Warrant Agreement)
specified in the Warrant Agreement and shall terminate at the Termination Date
(as such date is defined in the Warrant Agreement) specified in the Warrant
Agreement. Closing of such exercise is subject to the satisfaction of several
conditions set forth in the Warrant Agreement. The purchase price for each
Share upon exercise of this Warrant initially shall be as set forth in the
Warrant Agreement (the "Exercise Price"). The Exercise Price and the number of
Shares of SGI purchasable upon exercise of this Warrant are subject to
adjustment from time to time as set forth in the Warrant Agreement.
Subject to the terms of the Warrant Agreement, this Warrant may be
exercised in whole or in part by presentation of this Warrant Certificate with
the Exercise Form and Investment Certificate attached hereto duly completed and
executed and simultaneous payment of the Exercise Price for all of the Shares
for which the Warrant is then exercised at the principal office of SGI. Payment
of such Exercise Price shall be made to SGI in cash, by certified bank or
cashier's check made payable to the order of SGI or other immediately available
funds.
This Warrant Certificate is issued under and in accordance with the Warrant
Agreement dated as of May __, 1997 (the "Warrant Agreement"), between SGI and
the Warrantholder named therein, and is subject to the terms and provisions
contained in the Warrant Agreement, to, which the Warrantholder consents by
acceptance hereof.
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This Warrant Certificate is transferable at the office of SGI in the manner
and subject to the limitations set forth in the Warrant Agreement.
Neither this Warrant Certificate nor the Warrant entitles the Warrantholder
to any of the rights of a partner or a Shareholder of SGI.
IN WITNESS WHEREOF, SGI has caused this Warrant Certificate to be duly
executed and delivered by its duly authorized officer as of May __, 1997.
SKY GAMES INTERNATIONAL LTD.
By:
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Name:
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Title:
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B-2
EXHIBIT C
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TO WARRANT CERTIFICATE
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EXERCISE FORM
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The undersigned hereby irrevocably elects to exercise the Warrant represented by
Warrant Certificate No. 1 dated as of May __, 1997, of Sky Games International
Ltd. ("SGI"), and pursuant to the terms of that certain Warrant Agreement dated
as of May __, 1997 between SGI and the Warrantholder, hereby tenders to SGI the
aggregate payment therefor of $_____________, for ____ Shares of Common Stock,
par value Cdn. $.01.
Name_________________________________
Address_______________________________
Signature______________________________
Date__________________________________
(Signature must conform in all respects to name of Warrantholder on the face of
the Warrant Certificate.)
C-1
