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EXHIBIT 14
WARRANT AGREEMENT
Dated as of
February 15, 2000
among
INFOGRAMES, INC.
(formerly GT Interactive Software Corp.),
INFOGRAMES ENTERTAINMENT SA
and
CALIFORNIA U.S. HOLDINGS, INC.
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WARRANT AGREEMENT, dated as of February 15, 2000 (as amended,
restated, supplemented or otherwise modified from time to time, this
"Agreement"), by and among INFOGRAMES, INC. (formerly GT Interactive Software
Corp.), a Delaware corporation (the "Company"), INFOGRAMES ENTERTAINMENT SA a
French societe anonyme ("Infogrames") and CALIFORNIA U.S. HOLDINGS, INC.
("CUSH"), a California corporation and wholly-owned subsidiary of Infogrames.
W I T N E S S E T H :
WHEREAS, pursuant to the terms of the Master
Assignment and Acceptance dated as of February 15, 2000 (the "Assignment and
Acceptance"), by and among (i) the Company, as borrower, (ii) First Union
National Bank, Bank of America, N.A., European American Bank, Fleet Bank, N.A.,
National Bank of Canada, The Bank of Nova Scotia (collectively the "Previous
Lenders"), and (iii) Infogrames, as assignee, the Previous Lenders assigned to
Infogrames all the rights and obligations of the Previous Lenders under the
Credit Agreement dated as of September 11, 1998 (as amended, restated,
supplemented or otherwise modified, the "Credit Agreement"), by and among the
Company and the Previous Lenders;
WHEREAS, pursuant to the terms of the
Collateral Assignment Agreement dated as of February 15, 2000 (the "Collateral
Assignment Agreement"), by and among (i) the Company, (ii) First Union National
Bank, (as administrative agent under the Credit Agreement, the "Agent"), and
(iii) Infogrames (as successor agent, the "Successor Agent"), the Agent
assigned to the Successor Agent all of its rights, titles and interests in, to
and under (a) a certain Second Amended and Restated Pledge Agreement, (b) a
certain Second Amended and Restated Security Agreement and (c) a certain
Guaranty Agreement, all entered into in connection with the Credit Agreement;
WHEREAS, in consideration of, among other
things, the Previous Lenders' agreement to execute the Second Amendment, Waiver
and Agreement dated June 29, 1999 (the "Second Amendment") under the Credit
Agreement to, among other things, amend certain provision of the Credit
Agreement, the Company entered into a Warrant Agreement dated as of June 29,
1999 (the "Bank Warrant Agreement") with the Previous Lenders;
WHEREAS, pursuant to the Bank Warrant
Agreement, the Company issued and delivered to the Previous Lenders, (i)
warrants to purchase 375,000 shares of Common Stock, exercisable on and after
June 29, 1999, (the "First Set of Warrants"), (ii) warrants to purchase 250,000
shares of Common Stock, exercisable on and after October 31, 1999 (the "Second
Set of Warrants") and (iii) warrants to purchase 225,000 shares of Common
Stock, that would have been exercisable on or after February 28, 2000 if
certain conditions had been met (the "Third Set of Warrants");
WHEREAS, in connection with the Assignment
and Acceptance, the Previous Lenders agreed to return to the Company for
cancellation the
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Third Set of Warrants, and the Company agreed to enter into this Agreement with
Infogrames and CUSH and to issue and deliver new warrants to CUSH to purchase
225,000 shares of Common Stock upon the terms and conditions set forth herein
(collectively, the "Credit Warrants"); and
WHEREAS, in connection with the issuance of
the Credit Warrants pursuant to this Agreement, the Company has agreed to
provide certain registration rights to CUSH in respect of the shares of Common
Stock issuable upon exercise of the Credit Warrants pursuant to an Amended and
Restated Registration Rights Agreement (as amended, restated, supplemented or
otherwise modified, the "Amended and Restated Registration Rights Agreement"),
by and among the Company and CUSH.
NOW, THEREFORE, in consideration of the
premises and mutual covenants contained herein, the parties hereto hereby agree
as follows:
ARTICLE 1.
Defined Terms
SECTION 1.1 Definitions. As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate" means, with respect to any Person, any other
Person which directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such first
Person or any of its Subsidiaries. The term "control" means (a) the power to
vote ten percent (10%) or more of the securities or other equity interests of a
Person having ordinary voting power, or (b) the possession, directly or
indirectly, of any other power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"Agent" has the meaning set forth in the Recitals.
"Agreement" has the meaning set forth in the Preamble.
"Amended and Restated Registration Rights Agreement" has the
meaning set forth in the Recitals.
"Assignment and Acceptance" has the meaning set forth in the
Recitals.
"Bank Warrant Agreement" has the meaning set forth in the
Recitals.
"Board" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board of Directors.
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"Business Day" shall mean any Monday, Tuesday, Wednesday,
Thursday or Friday that is not a day on which banking institutions in New York
City are authorized by law, regulation or executive order to close.
"Cashless Exercise" has the meaning set forth in Section 3.4.
"Cashless Exercise Ratio" means a fraction, the numerator of
which is the excess of the Current Market Value per share of Common Stock on
the date of exercise over the Exercise Price per share and the denominator of
which is the Current Market Value per share of the Common Stock on the date of
exercise.
"Certificate Register" has the meaning set forth in Section
2.3.
"Collateral Assignment Agreement" has the meaning set forth in
the Recitals.
"Combination" means an event or series of events in which the
Company consolidates with, merges with or into, or sells all or substantially
all its property and assets to, another Person or Persons.
"Common Stock" means the common stock, $0.01 par value, of the
Company together with any other equity securities that may be issued by the
Company in substitution therefor.
"Company" has the meaning set forth in the Preamble.
"Credit Agreement" has the meaning set forth in the Recitals.
"Credit Warrants" has the meaning set forth in the Recitals.
"Current Market Value" has the meaning set forth in Section
4.8.
"CUSH" has the meaning set forth in the Preamble.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exercise Price" has the meaning set forth in Section 3.1.
"Expiration Date" means February 15, 2005.
"Fair Value" has the meaning set forth in Section 4.2.
"First Set of Warrants" has the meaning set forth in the
Recitals.
"Governmental Authority" means any nation, province, state or
political subdivision thereof, and any government or any Person exercising
executive, legislative, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
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"Holder" means CUSH or any person to whom CUSH transfers a
Credit Warrant pursuant to the terms and conditions hereof.
"Officer" means any of the following: the chief executive
officer, chief operating officer, chief financial officer or vice president of
the Company.
"Person" means an individual, corporation, limited liability
company, partnership, association, trust, business trust, joint venture, joint
stock company, pool, syndicate, sole proprietorship, unincorporated
organization, Governmental Authority or any other form of entity or group
thereof.
"Previous Lenders" has the meaning set forth in the Recitals.
"Required Holders" has the meaning set forth in Section 5.5.
"Rule 144" means Rule 144 promulgated under the Securities
Act, as such Rule may be amended from time to time, or any successor rule or
regulation hereinafter adopted by the SEC.
"SEC" means the Securities and Exchange Commission (or any
successor thereto).
"Second Amendment" has the meaning set forth in the Recitals.
"Second Set of Warrants" has the meaning set forth in the
Recitals.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means as to any Person, any corporation,
partnership, limited liability company or other entity of which more than fifty
percent (50%) of the outstanding capital stock or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other managers of such corporation, partnership, limited liability company or
other entity is at the time, directly or indirectly, owned by or the management
is otherwise controlled by such Person (irrespective of whether, at the time,
capital stock or other ownership interests of any other class or classes of
such corporation, partnership, limited liability company or other entity shall
have or might have voting power by reason of the happening of any contingency).
"Successor Agent" has the meaning set forth in the Recitals.
"Third Set of Warrants" has the meaning set forth in the
Recitals.
"Transfer Agent" has the meaning set forth in Section 3.5.
"Transfer Restricted Securities" means the Credit Warrants and
the Warrant Shares issued to Holder upon exercise of the Credit Warrants,
whether or not such exercise has been effected. Each such security shall cease
to be a Transfer
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Restricted Security when the legend set forth in Section 2.5 is, or may be,
removed pursuant to Section 2.4(b)(v).
"Voting Stock" of a corporation means all classes of capital
stock of such corporation then outstanding and normally entitled to vote in the
election of directors.
"Warrant Certificate" means the certificate evidencing the
Credit Warrants to be delivered pursuant to this Agreement, substantially in
the form of Exhibit A hereto.
"Warrant Shares" means the shares of Common Stock to be issued
and received, or issued and received, as the case may be, upon exercise of the
Credit Warrants.
SECTION 1.2 Rules of Construction. Unless the text otherwise
requires.
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has
the meaning assigned to it in accordance with U.S. generally accepted accounting
principles as in effect from time to time;
(c) "or" is not exclusive;
(d) "including" means including, without
limitation; and
(e) words in the singular include the plural and
words in the plural include the singular.
ARTICLE 2.
Warrant Certificates
SECTION 2.1 Issuance and Dating. The Credit Warrants
initially shall be issued as of the date of this Agreement. The Company,
Infogrames and CUSH hereby agree that the Credit Warrants initially shall be
issued in the name of CUSH and that the provisions of Section 2.4 shall not
apply to such issuance. The Credit Warrants shall be evidenced by a Warrant
Certificate substantially in the form of Exhibit A, which is hereby
incorporated in and expressly made a part of this Agreement. The Warrant
Certificate may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company) and shall bear the legend required by Section 2.5. Each Credit
Warrant shall be dated the date of its execution by the Company. The terms of
the Credit Warrants set forth in Exhibit A are part of the terms of this
Agreement.
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SECTION 2.2 Execution. (a) With respect to
the Credit Warrants to be issued pursuant to this Agreement, one or more
Warrant Certificates representing the Credit Warrants shall be executed on
behalf of the Company by manual or facsimile signature by one Officer and
attested by its Secretary or an Assistant Secretary under its corporate seal
which may be impressed, affixed, imprinted or reproduced on such Warrant
Certificate or may be in facsimile form.
(b) Upon written order from any Holder, the
Company shall execute and deliver to such Holder Warrant Certificates
registered in the name or names and for such number of Credit Warrants as shall
be specified by such Holder in such order in exchange for Warrant
Certificate(s) then held by such Holder for a like number of Credit Warrants.
SECTION 2.3 Certificate Register. The
Company shall keep a register ("Certificate Register") of the Warrant
Certificates and of their transfer and exchange. The Certificate Register
shall show the names and addresses of the respective Holders and the date and
number of Credit Warrants evidenced on the face of each of the Warrant
Certificates.
SECTION 2.4 Transfer and Exchange. (a)
When Credit Warrants are presented to the Company with a request to register
the transfer of such Credit Warrants or to exchange such Credit Warrants for an
equal number of Credit Warrants of other authorized denominations, the Company
shall register the transfer or make the exchange as requested; provided,
however, that the Warrant Certificates representing such Credit Warrants
surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to the Company,
duly executed by the Holder thereof or the attorney of such Holder duly
authorized in writing; and
(ii) in the case of Credit Warrants that are
Transfer Restricted Securities, shall be accompanied by the following
additional information and documents:
(A) a certificate from such Holder in substantially
the form of Exhibit C hereto certifying that:
(1) such securities are being
delivered for registration in the name of such Holder without transfer;
(2) such securities are being
transferred to the Company;
(3) such securities are being
transferred pursuant to an effective registration statement under the
Securities Act; or
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(4) such securities are being
transferred (w) to a "qualified institutional buyer" ("QIB") as defined in Rule
144A under the Securities Act pursuant to such Rule 144A, if available, (x) in
an offshore transaction in accordance with Rule 904 under the Securities Act,
(y) in a transaction meeting the requirements of Rule 144 under the Securities
Act or (z) pursuant to another available exemption from the registration
requirements of the Securities Act; and
(B) in the case of any transfer described under
clause (a)(ii)(A)(4)(x), (y) or (z) of this Section 2.4, evidence reasonably
satisfactory to the Company (which may include an opinion of counsel) as to
compliance with the restrictions set forth in the legend in Section 2.5.
(b) (i) To permit registrations of
transfers and exchanges, the Company shall execute Warrant Certificates as
required pursuant to the provisions of this Section 2.4.
(ii) All Warrant Certificates issued
upon any registration of transfer or exchange of Credit Warrants shall be the
valid obligations of the Company, entitled to the same benefits under this
Agreement, as the Warrant Certificates surrendered upon such registration of
transfer or exchange.
(iii) Prior to due presentment for
registration of transfer of any Credit Warrant, the Company may deem and treat
the Person in whose name any Credit Warrant is registered as the absolute owner
of such Credit Warrant and the Company shall not be affected by notice to the
contrary.
(iv) No service charge shall be made
to a Holder for any registration of transfer or exchange upon surrender of any
Warrant Certificate. However, the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Warrant
Certificates.
(v) Upon any sale or transfer of
Credit Warrants pursuant to an effective registration statement under the
Securities Act, pursuant to Rule 144(k) under the Securities Act or pursuant to
an opinion of counsel reasonably satisfactory to the Company that no legend is
required, the Company shall permit the Holder thereof to exchange such Credit
Warrants for Credit Warrants represented by Warrant Certificates that do not
bear the legend set forth in Section 2.5 and rescind any restriction on the
transfer of such Credit Warrants.
SECTION 2.5 Legends. Except for Warrant
Certificates delivered pursuant to Section 2.4(b)(v) of this Agreement, each
Warrant Certificate evidencing the Credit Warrants (and all Warrant
Certificates issued in exchange therefor or substitution thereof) and each
certificate representing the Warrant Shares (unless such Warrant Shares are not
Transfer Restricted Securities) shall bear a legend in substantially the
following form (with any appropriate modification for the Warrant Shares):
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"THE WARRANTS AND THE COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THE WARRANTS (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION UNDER THE SECURITIES ACT, OR IN A TRANSACTION WHICH IS EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
THE HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, UNLESS PREVIOUSLY REGISTERED UNDER THE SECURITIES ACT,
ONLY (A) TO THE COMPANY; (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE); (C) TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A; (D) PURSUANT TO AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT;
OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT."
SECTION 2.6 Replacement Certificates. If a
mutilated Warrant Certificate is surrendered to the Company or if the Holder of
a Warrant Certificate claims that the Warrant Certificate has been lost,
destroyed or wrongfully taken, the Company shall issue a replacement Warrant
Certificate if the requirements of Section 8-405 of the Uniform Commercial Code
as in effect in the State of New York are met. If required by the Company,
such Holder shall furnish an indemnity sufficient in the reasonable judgment of
the Company to protect the Company from any loss which it may suffer if a
Warrant Certificate is replaced. The Company may charge the Holder for its
reasonable expenses in replacing a Warrant Certificate. Every replacement
Warrant Certificate is an additional obligation of the Company.
SECTION 2.7 Cancellation. (a) In the event
the Company shall purchase or otherwise acquire Credit Warrants, the Warrant
Certificates in respect thereof shall thereupon be delivered to the Company for
cancellation.
(b) The Company shall cancel and destroy all
Warrant Certificates surrendered for transfer, exchange, replacement, exercise
or cancellation. The Company may not issue new Warrant Certificates to replace
Warrant Certificates to the extent they evidence Credit Warrants which have
been exercised or Credit Warrants which the Company has purchased or otherwise
acquired.
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ARTICLE 3.
Exercise Terms
SECTION 3.1 Exercise Price. Each Credit
Warrant shall entitle the Holder thereof to purchase one share of Common Stock
for a per share exercise price of $0.01 (the "Exercise Price").
SECTION 3.2 Limitations on Exercise. Each
Credit Warrant may be exercised at any time in the discretion of the Holder
thereof, provided, that no Credit Warrant shall be exercisable prior to
February 28, 2000 and after the Expiration Date.
SECTION 3.3 Expiration. A Credit Warrant
shall terminate and become void as of the earlier of (a) the close of business
on the Expiration Date and (b) the time and date such Credit Warrant is
exercised. The Credit Warrants shall terminate and become void after the
Expiration Date.
SECTION 3.4 Manner of Exercise. Credit
Warrants may be exercised upon (a) surrender to the Company of the Warrant
Certificates, together with the form of election to purchase Common Stock
attached as Exhibit B hereto duly filled in and signed by the Holder thereof
and (b) payment to the Company of the Exercise Price for the number of Warrant
Shares in respect of which such Credit Warrant is then exercised. Such payment
shall be made (i) in cash or by certified or official bank check payable to the
order of the Company or by wire transfer of funds to an account designated by
the Company for such purpose or (ii) by the surrender (which surrender shall be
evidenced by cancellation of the number of Credit Warrants represented by any
Warrant Certificate presented in connection with a Cashless Exercise) of a
Credit Warrant or Credit Warrants (represented by one or more relevant Warrant
Certificates), and without the payment of the Exercise Price in cash, in
exchange for the issuance of such number of shares of Common Stock equal to the
product of (1) the number of shares of Common Stock for which such Credit
Warrant would otherwise then be nominally exercised if payment of the Exercise
Price as of the date of exercise were being made in cash and (2) the Cashless
Exercise Ratio. An exercise of a Credit Warrant in accordance with clause (ii)
of the immediately preceding sentence is herein called a "Cashless Exercise".
All provisions of this Agreement shall be applicable with respect to an
exercise of Warrant Certificates pursuant to a Cashless Exercise for less than
the full number of Credit Warrants represented thereby. Subject to Section
3.2, the rights represented by the Credit Warrants shall be exercisable at the
election of the Holder thereof either in full at any time or from time to time
in part and in the event that a Warrant Certificate is surrendered for exercise
in respect of less than all the Warrant Shares purchasable on such exercise at
any time prior to the Expiration Date a new Warrant Certificate exercisable for
the remaining Warrant Shares will be issued. The Company shall execute and
deliver to the Holder the required new Warrant Certificate.
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SECTION 3.5 Issuance of Warrant Shares.
Subject to Section 2.6, upon the surrender of Warrant Certificates and payment
of the per share Exercise Price, as set forth in Section 3.4, the Company shall
issue (and, if applicable, cause any transfer agent for the Common Stock (the
"Transfer Agent") to countersign) and deliver to or upon the written order of
the Holder and in such name or names as the Holder may designate, a certificate
or certificates for the number of full Warrant Shares so purchased upon the
exercise of such Credit Warrants or other securities or property to which it is
entitled, registered or otherwise to the Person or Persons entitled to receive
the same, together with cash as provided in Section 3.6 in respect of any
fractional Warrant Shares otherwise issuable upon such exercise. Such
certificate or certificates shall be deemed to have been issued and any Person
so designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the date of the surrender of such Warrant
Certificates and payment of the per share Exercise Price as set forth in
Section 3.4.
SECTION 3.6 Fractional Warrant Shares. The
Company shall not be required to issue fractional Warrant Shares on the
exercise of Credit Warrants. If more than one Credit Warrant shall be
exercised in full at the same time by the same Holder, the number of full
Warrant Shares which shall be issuable upon such exercise shall be computed on
the basis of the aggregate number of Warrant Shares purchasable pursuant
thereto. If any fraction of a Warrant Share would, except for the provisions
of this Section 3.6, be issuable on the exercise of any Credit Warrant (or
specified portion thereof), the Company shall pay an amount in cash equal to
the Current Market Value for one Warrant Share on the Business Day immediately
preceding the date the Credit Warrant is exercised, multiplied by such
fraction, computed to the nearest whole cent.
SECTION 3.7 Reservation of Warrant Shares.
The Company shall at all times keep reserved out of its authorized shares of
Common Stock a number of shares of Common Stock sufficient to provide for the
exercise of all outstanding Credit Warrants. Any registrar for the Common
Stock shall at all times until the Expiration Date, or the time at which all
Credit Warrants have been exercised or cancelled, reserve such number of
authorized shares as shall be required for such purpose. The Company will keep
a copy of this Agreement on file with any Transfer Agent. All Warrant Shares
which may be issued upon exercise of Credit Warrants shall, upon issue, be
fully paid, nonassessable, free of preemptive rights and free from all taxes,
liens, charges and security interests with respect to the issue thereof. The
Company will supply any Transfer Agent with duly executed stock certificates
for such purpose and will itself provide or otherwise make available any cash
which may be payable as provided in Section 3.6. The Company will furnish to
any Transfer Agent a copy of all notices of adjustments and certificates
related thereto transmitted to each Holder.
SECTION 3.8 Compliance with Law. If any
shares of Common Stock required to be reserved for purposes of exercise of
Credit Warrants require, under any other Federal or state law or applicable
governing rule or regulation of any national securities exchange, registration
with or approval of any Governmental
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Authority, or listing on any such national securities exchange before such
shares may be issued upon exercise, the Company will cause such shares to be
duly registered or approved by such Governmental Authority or listed on the
relevant national securities exchange; provided that the Company shall not have
any obligation to register the Warrant Shares under the Securities Act except
pursuant to the Amended and Restated Registration Rights Agreement.
SECTION 3.9 Registration Rights. Each
Holder of the Credit Warrants and the Warrant Shares shall be entitled to the
registration rights in respect of the Warrant Shares set forth in the Amended
and Restated Registration Rights Agreement.
ARTICLE 4.
Antidilution Provisions
SECTION 4.1 Changes in Common Stock. In the
event that at any time or from time to time after the date hereof the Company
shall (a) pay a dividend or make a distribution on its Common Stock in shares
of its Common Stock or other shares of capital stock, (b) subdivide its
outstanding shares of Common Stock into a larger number of shares of Common
Stock, (c) combine its outstanding shares of Common Stock into a smaller number
of shares of Common Stock or (d) increase or decrease the number of shares of
Common Stock outstanding by reclassification of its Common Stock, then the
number of shares of Common Stock purchasable upon exercise of each Credit
Warrant immediately after the happening of such event shall be adjusted so
that, after giving affect to such adjustment, the Holder of each Credit Warrant
shall be entitled to receive the number of shares of Common Stock upon exercise
that such holder would have owned or have been entitled to receive had such
Credit Warrants been exercised immediately prior to the happening of the events
described above (or, in the case of a dividend or distribution of Common Stock,
immediately prior to the record date therefor). An adjustment made pursuant to
this Section 4.1 shall become effective immediately after the effective date,
retroactive to the record date therefor in the case of a dividend or
distribution in shares of Common Stock, and shall become effective immediately
after the effective date in the case of a subdivision, combination or
reclassification.
SECTION 4.2 Cash Dividends and Other
Distributions. In the event that at any time or from time to time after the
date hereof the Company shall distribute to holders of Common Stock (a) any
dividend or other distribution of cash, evidences of its indebtedness, shares
of its capital stock or any other properties or securities or (b) any options,
warrants or other rights to subscribe for or purchase any of the foregoing
(other than, in each case set forth in (a) and (b), (i) any dividend or
distribution described in Section 4.1 or (ii) any rights, options, warrants or
securities described in Section 4.3) then the number of shares of Common Stock
thereafter purchasable upon the exercise of each Credit Warrant shall be
increased to a number
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determined by multiplying the number of shares of Common Stock purchasable upon
the exercise of such Credit Warrant immediately prior to the record date for
any such dividend or distribution by a fraction, the numerator of which shall
be the Current Market Value per share of Common Stock on the record date for
such distribution, and the denominator of which shall be such Current Market
Value per share of Common Stock less the sum of (x) any cash distributed per
share of Common Stock and (y) the fair value (the "Fair Value") (as determined
in good faith by the Board, whose determination shall be evidenced by a Board
resolution delivered to each Holder) of the portion, if any, of the
distribution applicable to one share of Common Stock consisting of evidences of
indebtedness, shares of stock, securities, other property, warrants, options or
subscription of purchase rights (notwithstanding the foregoing, if the Fair
Value per share of Common Stock in the above formula equals or exceeds the
Current Market Value per share of Common Stock in the above formula, then the
Current Market Value per share of Common Stock shall be equal to the Fair Value
per share of the Common Stock on the record date as determined in good faith by
the Board and described in a Board resolution delivered to each Holder). Such
adjustments shall be made whenever any distribution is made and shall become
effective as of the date of distribution, retroactive to the record date for
any such distribution; provided, however, that the Company is not required to
make an adjustment pursuant to this Section 4.2 if at the time of such
distribution the Company makes the same distribution to Holders of Credit
Warrants as it makes to holders of Common Stock pro rata based on the number of
shares of Common Stock for which such Credit Warrants are exercisable (whether
or not currently exercisable).
SECTION 4.3 Rights Issue. In the event that
at any time or from time to time after the date hereof the Company shall issue,
sell, distribute or otherwise grant any rights to subscribe for or to purchase,
or any options or warrants for the purchase of, or any securities convertible
or exchangeable into, Common Stock, entitling such holders to subscribe for or
purchase shares of Common Stock or stock or securities convertible into Common
Stock, whether or not immediately exercisable, convertible or exchangeable, as
the case may be, and the price per share of Common Stock issuable upon
exercise, conversion or exchange thereof is lower at the record date for such
issuance than the then Current Market Value per share of Common Stock, then the
number of shares of Common Stock thereafter purchasable upon the exercise of
each Credit Warrant shall be increased to a number determined by multiplying
the number of shares of Common Stock purchasable upon the exercise of such
Credit Warrant immediately prior to the date of issuance of such rights,
options, warrants or securities by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding on the date of issuance of
such rights, options, warrants or securities plus the number of additional
shares of Common Stock offered for subscription or purchase or into or for
which such securities are convertible or exchangeable, and the denominator of
which shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights, options, warrants or securities plus the total number
of shares of Common Stock which could be purchased at the Current Market Value
with the aggregate consideration received through issuance of such rights,
warrants, options, or convertible securities. Such adjustment shall be made
whenever such rights, options or warrants are issued and shall become effective
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retroactively immediately after the record date for the determination of
stockholders entitled to receive such rights, options, warrants or securities.
Notwithstanding any other provision of this Section 4.3, the number of shares
of Common Stock purchasable upon exercise of any Credit Warrant shall not be
adjusted pursuant to this Section 4.3 in connection with the issuance or grant
of Common Stock upon the exercise of rights or options to the Company's
employees under bona fide employee benefit plans adopted prior to the date of
this Agreement by the Board and approved by the holders of Common Stock when
required by law, if the number of shares of Common Stock underlying such rights
and options do not exceed 5% of the Common Stock outstanding on the date of
this Agreement.
If the Company at any time shall issue two or
more securities as a unit and one or more of such securities shall be rights,
options or warrants for or securities convertible or exchangeable into, Common
Stock subject to this Section 4.3, the consideration allocated to each such
security shall be determined in good faith by the Board.
SECTION 4.4 Issuance of Additional Shares of
Common Stock. In the event that at any time or from time to time after the
date hereof the Company shall issue or sell any additional shares of Common
Stock for consideration in an amount per additional share of Common Stock less
than the Current Market Value, then the number of shares of Common Stock
thereafter purchasable upon the exercise of each Credit Warrant shall be
increased to a number determined by multiplying the number of shares of Common
Stock purchasable upon the exercise of each Credit Warrant immediately prior to
such issue or sale by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately after such issue or sale, and
the denominator of which shall be the sum of (i) the number of shares of Common
Stock outstanding immediately prior to such issue or sale, and (ii) the number
of shares of Common Stock which could be purchased at the Current Market Value
with the aggregate consideration received from the issuance or sale of the
additional shares of Common Stock. For the purposes of this Section 4.4, the
date as of which the Current Market Value per share of Common Stock shall be
computed shall be the earlier of (x) the date on which the Company shall enter
into a firm contract for the issuance of such additional shares of Common Stock
or (y) the date of actual issuance of such additional shares of Common Stock.
Notwithstanding any other provision of this Section 4.4, the number of shares
of Common Stock purchasable upon exercise of any Credit Warrant shall not be
adjusted pursuant to this Section 4.4 as a result of the issuance or sale of
Common Stock in connection with: (a) a bona fide firm commitment underwritten
public offering of Common Stock of the Company, (b) a transaction to which
Section 4.1, 4.2 or 4.3 is applicable, (c) the exercise of the Credit Warrants,
the exercise of any other warrants issued by the Company prior to the date of
this Agreement or the exercise of any warrants issued in connection with the
Shareholder Subordinated Debt (as defined in the Credit Agreement), (d) a
private placement of Common Stock of the Company sold for a cash purchase price
not more than 10% below the Current Market Value of the Common Stock so sold in
such private placement and (e) the exercise of rights or options issued to the
Company's employees under bona fide employee benefit plans adopted by the Board
and approved by the
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holders of Common Stock when required by law, if such Common Stock would
otherwise be covered by this Section 4.4.
SECTION 4.5 Combination; Liquidation. (a)
Except as provided in Section 4.5(b), in the event of any Combination, each
Holder shall have the right to receive upon exercise of its Credit Warrants
such number of shares of capital stock or other securities or property which
such Holder would have been entitled to receive upon or as a result of such
Combination had such Credit Warrants been exercised immediately prior to such
event.
(b) In the event of (i) a Combination where
consideration to holders of Common Stock in exchange for their shares is
payable solely in cash, or (ii) the dissolution, liquidation or winding-up of
the Company, then each Holder of the Credit Warrants will be entitled to
receive distributions on an equal basis with the holders of Common Stock or
other securities issuable upon exercise of its Credit Warrants, as if such
Credit Warrants had been exercised immediately prior to such event, less the
Exercise Price. In case of any Combination described in this Section 4.5(b),
the surviving or acquiring Person and, in the event of any dissolution,
liquidation or winding-up of the Company, the Company, shall make payment to
each Holder by delivering a check in such amount as is appropriate (or, in the
case of consideration other than cash, such other consideration as is
appropriate) to such Person or Persons as it may be directed in writing by such
Holder surrendering such Credit Warrants.
SECTION 4.6 Tender Offers: Exchange Offers.
In the event that the Company or any subsidiary of the Company shall purchase
shares of Common Stock pursuant to a tender offer or an exchange offer for a
price per share of Common Stock that is greater than the then Current Market
Value per share of Common Stock in effect at the end of the trading day
immediately following the day on which such tender offer or exchange offer
expires, then the number of shares of Common Stock thereafter purchasable upon
the exercise of each Credit Warrant shall be increased to a number determined
by multiplying the number of shares of Common Stock purchasable upon the
exercise of such Credit Warrant immediately prior to such purchase by a
fraction the numerator of which shall be the sum of (x) the fair market value
of the aggregate consideration payable to stockholders based on the acceptance
(up to any maximum specified in the terms of the tender offer or exchange
offer) of all shares of Common Stock validly tendered or exchanged and not
withdrawn as of the expiration time of such tender offer or exchange offer (the
"Purchased Shares") and (y) the product of the number of shares of Common Stock
outstanding (less the Purchased Shares) at the expiration time of such offer or
exchange offer and the first reported sales price of the Common Stock on the
trading day immediately following the day on which such tender offer or
exchange offer expires and the denominator of which shall be the number of
shares of Common Stock outstanding (including any Purchased Shares) at the
expiration time of such tender offer or exchange offer multiplied by the first
reported sales price of the Common Stock on the trading day immediately
following the day on which such tender offer or exchange offer expires, such
increase to become effective immediately prior to the opening of business on
the day immediately following the day on which such tender offer or exchange
offer expires.
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SECTION 4.7 Other Events. If any event
occurs as to which the foregoing provisions of this Article 4 are not strictly
applicable or, if strictly applicable, would not, in the good faith judgment of
the Board, fairly and adequately protect the purchase rights of the Credit
Warrants in accordance with the essential intent and principles of such
provisions, then such Board shall make such adjustments in the application of
such provisions, in accordance with such essential intent and principles, as
shall be reasonably necessary, in the good faith opinion of such Board, to
protect such purchase rights as aforesaid, but in no event shall any such
adjustment have the effect of decreasing the number of shares of Common Stock
subject to purchase upon exercise of this Credit Warrant.
SECTION 4.8 Current Market Value. For the
purpose of any computation of Current Market Value under this Article 4 and
Section 3.6, the "Current Market Value" per share of Common Stock at any date
shall be (a) for purposes of Section 3.6, the closing price on the Business Day
immediately prior to the date of the exercise of the applicable Credit Warrant
pursuant to Article 3 and (b) in all other cases, the average of the daily
closing prices for the 20 consecutive trading days ending on the last full
trading day on the exchange or market specified in the second succeeding
sentence prior to such date. The closing price for any day shall be the last
reported sale price regular way or, in case no such reported sale takes place
on such day, the average of the closing bid and asked prices regular way for
such day, in each case (1) on the principal national securities exchange on
which the shares of Common Stock are listed or to which such shares are
admitted to trading or (2) if the Common Stock is not listed or admitted to
trading on a national securities exchange, in the over-the-counter market as
reported by the Nasdaq National Market or any comparable system or (3) if the
Common Stock is not listed on the Nasdaq National Market or a comparable
system, as furnished by two members of the NASD selected from time to time in
good faith by the Board for that purpose. In the absence of all of the
foregoing, or if for any other reason the Current Market Value per share cannot
be determined pursuant to the foregoing provisions of this Section 4.8, the
Current Market Value per share shall be the (x) the fair market value thereof
determined in good faith in the most recently completed arm's-length
transaction between the Company and a person other than an Affiliate of the
Company and the closing of which occurs on such date or shall have occurred
within the three months preceding such date or (y) if no transaction shall have
occurred on such date or within such three-month period, the fair market value
thereof as determined by an investment bank of nationally recognized standing
selected by the Company and acceptable to the Required Holders. The Company
shall pay the fees and expenses of any investment bank involved in the
determination of Current Market Value.
SECTION 4.9 Superseding Adjustment. Upon
the expiration of any rights, options, warrants or conversion or exchange
privileges which resulted in the adjustments pursuant to this Article 4, if any
thereof shall not have been exercised, the number of Warrant Shares purchasable
upon the exercise of each Credit Warrant shall be readjusted as if (a) the only
shares of Common Stock issuable upon exercise of such rights, options, warrants,
conversion or exchange privileges were the shares of Common Stock, if any,
actually issued upon the exercise of such rights,
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options, warrants or conversion or exchange privileges and (b) shares of Common
Stock actually issued, if any, were issuable for the consideration actually
received by the Company upon such exercise plus the aggregate consideration, if
any, actually received by the Company for the issuance, sale or grant of all
such rights, options, warrants or conversion or exchange privileges whether or
not exercised; provided, however, that no such readjustment shall (except by
reason of an intervening adjustment under Section 4.1) have the effect of
decreasing the number of Warrant Shares purchasable upon the exercise of each
Credit Warrant by an amount in excess of the amount of the adjustment initially
made in respect of the issuance, sale or grant of such rights, options, warrants
or conversion or exchange privileges.
SECTION 4.10 Minimum Adjustment. The
adjustments required by the preceding Sections of this Article 4 shall be made
whenever and as often as any specified event requiring an adjustment shall
occur, except that no adjustment of the number of shares of Common Stock
purchasable upon exercise of Credit Warrants that would otherwise be required
shall be made (except in the case of a subdivision or combination of shares of
Common Stock, as provided for in Section 4.1) unless and until such adjustment
either by itself or with other adjustments not previously made increases or
decreases by at least 1% the number of shares of Common Stock purchasable upon
exercise of Credit Warrants immediately prior to the making of such adjustment.
Any adjustment representing a change of less than such minimum amount shall be
carried forward and made as soon as such adjustment, together with other
adjustments required by this Article 4 and not previously made, would result in
a minimum adjustment. For the purpose of any adjustment, any specified event
shall be deemed to have occurred at the close of business on the date of its
occurrence. In computing adjustments under this Article 4, fractional
interests in Common Stock shall be taken into account to the nearest
one-hundredth of a share.
SECTION 4.11 Notice of Adjustment. Whenever
the number of shares of Common Stock and other property, if any, purchasable
upon exercise of Credit Warrants is adjusted, as herein provided, the Company
shall deliver to each Holder a certificate of a firm of independent accountants
(who may be the regular accountants employed by the Company) setting forth, in
reasonable detail, the event requiring the adjustment and the method by which
such adjustment was calculated (including a description of the basis on which
the Board determined the fair market value of any evidences of indebtedness,
other securities or property or warrants or other subscription or purchase
rights), and specifying the number of shares of Common Stock purchasable upon
exercise of Credit Warrants after giving effect to such adjustment.
SECTION 4.12 Notice of Certain Transactions.
In the event that the Company shall propose (a) to pay any dividend payable in
securities of any class to the holders of its Common Stock or to make any other
distribution to the holders of its Common Stock, (b) to offer the holders of
its Common Stock rights to subscribe for or to purchase any securities
convertible into shares of Common Stock or shares of Common Stock or shares of
stock of any class or any other securities, rights or options, (c) to effect
any reclassification of its Common Stock, capital reorganization
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or Combination or (d) to effect the voluntary or involuntary dissolution,
liquidation or winding-up of the Company, or in the event of a tender offer or
exchange offer described in Section 4.6, the Company shall within five Business
Days send to each Holder a notice, which shall specify the record date for the
purposes of such dividend, distribution or rights, or the date such issuance or
event is to take place and the date of participation therein by the holders of
Common Stock, if any such date is to be fixed, and shall briefly indicate the
effect of such action on the Common Stock and on the number and kind of any
other shares of stock and on other property, if any, and the number of shares
of Common Stock and other property, if any, purchasable upon exercise of each
Credit Warrant after giving effect to any adjustment which will be required as
a result of such action. Such notice shall be given by the Company as promptly
as possible and, in the case of any action covered by clause (a) or (b) above,
at least ten days prior to the record date for determining holders of the
Common Stock for purposes of such action and, in the case of any other such
action, at least 15 Business Days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of Common
Stock, whichever shall be the earlier.
SECTION 4.13 Adjustment to Warrant
Certificate. The form of Warrant Certificate need not be changed because of
any adjustment made pursuant to this Article 4, and Warrant Certificates issued
after such adjustment may state the same number of shares of Common Stock as
are stated in any Warrant Certificates issued prior to the adjustment. The
Company, however, may at any time in its sole discretion make any change in the
form of Warrant Certificate that it may deem appropriate to give effect to such
adjustments and that does not affect the substance of the Warrant Certificate,
and any Warrant Certificate thereafter issued, whether in exchange or
substitution for an outstanding Warrant Certificate or otherwise, may be in the
form as so changed.
ARTICLE 5.
Miscellaneous
SECTION 5.1 Representations and Warranties.
The Company hereby represents and warrants to each Holder that (a) the Company
is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware, (b) the Company has the corporate power and
authority to execute and deliver this Warrant Agreement and the Warrant
Certificates, to issue Credit Warrants and Warrant Shares and to perform its
obligations under this Warrant Agreement and the Warrant Certificates, (c) the
execution, delivery and performance by the Company of this Warrant Agreement
and the Warrant Certificates, the issuance of the Credit Warrants and the
issuance of the Warrant Shares upon exercise of the Credit Warrants have been
duly authorized by all necessary corporate action and do not and will not
violate, or result in a breach of, or constitute a default under, or require
any consent under, or result in the creation of any lien upon the Company's
assets pursuant to, any law, rule, regulation or contractual obligation binding
upon the Company, (d) this
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Warrant Agreement has been duly executed and delivered by the Company and
constitutes a legal, valid, binding and enforceable obligation of the Company,
(e) when the Credit Warrants and Warrant Certificates have been issued by the
Company as contemplated hereby, such Credit Warrants and Warrant Certificates
will constitute legal, valid, binding and enforceable obligations of the
Company and (f) the Warrant Shares, when issued by the Company upon exercise of
the related Credit Warrants in accordance with the terms hereof, will be duly
authorized, validly issued, fully paid and nonassessable shares of the Common
Stock of the Company with no personal liability attaching to the ownership
thereof.
SECTION 5.2 Reports; Rule 144A. (a) The
Company shall provide the Holder with such financial statements and reports as
are distributed to holders of Common Stock generally.
(b) The Company hereby agrees to make
available upon request, for so long as any Credit Warrants or Warrant Shares
remain outstanding and during any period in which the Company is not subject to
Section 13 or 15(d) of the Exchange Act, to any Holder or beneficial owner of
Credit Warrants or Warrant Shares in connection with any sale thereof and any
prospective purchaser thereof from such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales pursuant to Rule 144A.
SECTION 5.3 Persons Benefitting. Nothing in
this Agreement is intended or shall be construed to confer upon any Person
other than the Company and any Holder any right, remedy or claim under or by
reason of this agreement or any part hereof.
SECTION 5 4 Rights of Holders. Except as
otherwise specifically required herein, holders of unexercised Credit Warrants
are not entitled (a) to receive dividends or other distributions, (b) to
receive notice of or vote at any meeting of the stockholders, (c) to consent to
any action of the stockholders, (d) to receive notice of any other proceedings
of the Company or (e) to exercise any other rights as stockholders of the
Company.
SECTION 5.5 Amendment. Any amendment or
supplement to this Agreement (including any Exhibit hereto) shall require the
written consent of the Holders of a majority of the outstanding Credit Warrants
(the "Required Holders"). The consent of each Holder directly affected shall
be required for any amendment pursuant to which the exercisability of any
Credit Warrant would be delayed, the Exercise Price would be increased or the
number of Warrant Shares purchasable upon exercise of Credit Warrants would be
decreased (other than pursuant to adjustments provided herein).
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SECTION 5.6 Notices.
(a) All notices and communications hereunder
shall be in writing. Any notice shall be effective if delivered by hand
delivery or sent via telecopy, recognized overnight courier service or
certified mail, return receipt requested, and shall be presumed to be received
by a party hereto (i) on the date of delivery if delivered by hand or sent by
telecopy, (ii) on the next Business Day if sent by recognized overnight courier
service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested.
(b) Notices to any party shall be sent to it
at the following addresses, or any other address as to which the Company or the
Holder, as the case may be, are notified in writing.
If to the Company: Infogrames, Inc.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Director of Legal Services
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With a copy to: Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to any Holder: To the Address set forth in the Certificate Register
SECTION 5.7 GOVERNING LAW. THIS AGREEMENT
AND THE WARRANT CERTIFICATES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT AND THE WARRANT CERTIFICATES SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO PRINCIPLES REGARDING CONFLICTS OF LAW.
SECTION 5.8 Successors. All agreements of
the Company in this Agreement and the Warrant Certificates shall bind its
successors.
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SECTION 5.9 Counterparts. This Agreement
may be executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
SECTION 5.10 Headings. The headings of the
Articles and Sections of this Agreement have been inserted for convenience of
reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.
SECTION 5.11 Severability. The provisions
of this Agreement are severable, and if any clause or provision shall be held
invalid, illegal or unenforceable in whole or in part in any jurisdiction, then
such invalidity or unenforceability shall affect in that jurisdiction only such
clause or provision, or part thereof, and shall not in any manner affect such
clause or provision in any other jurisdiction or any other clause or provision
of this Agreement in any jurisdiction.
SECTION 5.12 Prior Agreements. This
Agreement supercedes any and all agreements, whether oral or written, among the
parties hereto related to the issuance by the Company to Infogrames or CUSH of
warrants to acquire Common Stock in connection with the execution and
performance of the Assignment and Acceptance. All such agreements are hereby
terminated and shall be of no further force and effect. Any warrant
certificates issued in connection with such prior agreement are hereby
cancelled without further action on the part of Infogrames, CUSH or the
Company.
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IN WITNESS WHEREOF, the parties have caused
this Agreement to be duly executed as of the date first written above.
INFOGRAMES, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------
Name: Xxxxx X. Xxxxxx
Title: CFO
INFOGRAMES ENTERTAINMENT SA
By: /s/ Xxxxx Xxxxxxx
------------------
Name: Xxxxx Xxxxxxx
Title: CEO
CALIFORNIA U.S. HOLDINGS, INC.
By: /s/ Xxxxxx Xxxxxxxx
-------------------
Name: Xxxxxx Xxxxxxxx
Title: CFO
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THE WARRANTS AND THE COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THE WARRANTS (THE "SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER
THE SECURITIES ACT, OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER
THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, UNLESS PREVIOUSLY REGISTERED UNDER THE SECURITIES ACT, ONLY (A) TO
THE COMPANY; (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE); (C) TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A; (D) PURSUANT TO AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT;
OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.
Certificate for 225,000 Warrants
WARRANTS TO PURCHASE COMMON STOCK
OF
INFOGRAMES, INC.
(formerly GT Interactive Software Corp.)
THIS CERTIFIES THAT CALIFORNIA U.S. HOLDINGS,
INC., or its registered assigns, is the registered holder of the number of
Warrants set forth above (the "Warrants"). Each Warrant entitles the holder
thereof (the "Holder"), at its option and subject to the provisions contained
herein and in the Warrant Agreement referred to below, to purchase from
Infogrames, Inc. (formerly GT Interactive Software Corp.), a Delaware
corporation (the "Company"), one share of common stock, $0.01 par value, of the
Company (the "Common Stock") at the per share exercise price of $0.01 (the
"Exercise Price"), or by Cashless Exercise referred to below. This Warrant
Certificate shall terminate and become void as of the close of business on
February 15, 2005 (the "Expiration Date") or upon the exercise hereof as to all
the shares of Common Stock subject hereto. The number of shares purchasable
upon exercise of the Warrants shall be subject to adjustment from time to time
as set forth in the Warrant Agreement.
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This Warrant Certificate is issued under and
in accordance with a Warrant Agreement dated as of February 15, 2000 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Warrant Agreement"), among the Company and the parties referred to therein,
and is subject to the terms and provisions contained in the Warrant Agreement.
The Warrant Agreement is hereby incorporated herein by reference and made a
part hereof. Reference is hereby made to the Warrant Agreement for a full
statement of the respective rights, limitations of rights, duties and
obligations of the Company and the Holder of the Warrants. Capitalized terms
used but not defined herein shall have the meanings ascribed thereto in the
Warrant Agreement.
Subject to the terms of the Warrant
Agreement, the Warrants may be exercised in whole or in part (i) by surrender
of this Warrant Certificate with the form of election to purchase Warrant
Shares attached hereto duly executed and with the simultaneous payment of the
Exercise Price in cash (subject to adjustment) to the Company or (ii) by
Cashless Exercise. Payment of the Exercise Price in cash shall be made in cash
or by certified or official bank check payable to the order of the Company or
by wire transfer of funds to an account designated by the Company for such
purpose. Payment by Cashless Exercise shall be made by the surrender of a
Warrant or Warrants represented by one or more Warrant Certificates and without
payment of the Exercise Price in cash, in exchange for the issuance of such
number of shares of Common Stock equal to the product of (1) the number of
shares of Common Stock for which such Warrant would otherwise then be nominally
exercised if payment of the Exercise Price were being made in cash and (2) the
Cashless Exercise Ratio.
The Warrants shall be exercisable from time
to time in the discretion of the Holder on or after February 28, 2000,
provided, that in no event shall the Warrants be exercisable after the
Expiration Date.
In the event the Company enters into a
Combination, the Holder hereof shall exercise the Warrants evidenced by this
Warrant Certificate and will be entitled to receive upon exercise of the
Warrants the shares of capital stock or other securities or other property of
such surviving entity as such Holder would have been entitled to receive upon
or as the result of such Combination had the Holder exercised its Warrants
immediately prior to such Combination; provided, that in the event that, in
connection with such Combination, consideration to holders of Common Stock in
exchange for their shares is payable solely in cash or in the event of the
dissolution, liquidation or winding-up of the Company, the Holder hereof will
be entitled to receive distributions on an equal basis with the holders of
Common Stock or other securities issuable upon exercise of the Warrants, as if
the Warrants had been exercised immediately prior to such events, less the
Exercise Price.
The Company may require payment of a sum
sufficient to pay all taxes, assessments or other governmental charges in
connection with the transfer or exchange of the Warrant Certificates pursuant
to Section 2.4 of the Warrant Agreement but not for any exchange or original
issuance (not involving a transfer) with
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respect to temporary Warrant Certificates, the exercise of the Warrants or the
Warrant Shares.
Upon any partial exercise of the Warrants,
there shall be issued to the Holder hereof a new Warrant Certificate in respect
of the shares of Common Stock as to which the Warrants shall not have been
exercised. This Warrant Certificate may be exchanged by presenting this
Warrant Certificate to the Company properly endorsed with a request to exchange
this Warrant Certificate for other Warrant Certificates evidencing an equal
number of Warrants. No fractional Warrant Shares will be issued upon the
exercise of the Warrants, but the Company shall pay an amount in cash equal to
the Current Market Value for one Warrant Share on the date the Warrant is
exercised, multiplied by such fraction, computed to the nearest whole cent.
The Warrants do not entitle any holder hereof
to any of the rights of a stockholder of the Company. All shares of Common
Stock issuable by the Company upon the exercise of the Warrants shall, upon
such issuance, be duly and validly issued and fully paid and non-assessable.
INFOGRAMES, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------
Name: Xxxxx X. Xxxxxx
Title: CFO
[SEAL]
Attest: /s/
------------
Secretary
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FORM OF ELECTION TO PURCHASE WARRANT SHARES
(to be executed only upon exercise of Warrants)
The undersigned hereby irrevocably elects to
exercise [ ] Warrants at an exercise price per Warrant (subject to
adjustment) of $0.01 to acquire an equal number of shares of Common Stock of
Infogrames, Inc. on the terms and conditions specified in the within Warrant
Certificate and the Warrant Agreement therein referred to, surrenders this
Warrant Certificate and all right, title and interest therein to Infogrames
Inc. and directs that the shares of Common Stock deliverable upon the exercise
of such Warrants be registered or placed in the name and at the address
specified below and delivered thereto.
Date: , 20
------------ -- ----------------------------------
(Signature of Owner)
----------------------------------
(Street Address)
----------------------------------
(City) (State) (Zip Code)
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
Any unexercised Warrants evidenced by the within Warrant Certificate to be
issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants") of
Infogrames, Inc. (the "Company")
This Certificate relates to __________
Warrants held in definitive form by _______________ (the "Transferor").
The Transferor has requested the Company by
written order to exchange or register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such Warrant, the
Transferor does hereby certify that the Transferor is familiar with the Warrant
Agreement relating to the above captioned Warrants and that the transfer of
this Warrant does not require registration under the Securities Act of 1933
(the "Securities Act"), because(1):
-----------------------------------
(1) Please check applicable box
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[ ] Such Warrant is being acquired for the
Transferor's own account without transfer.
[ ] Such Warrant is being transferred to the
Company.
[ ] Such Warrant is being transferred in a
transaction meeting the requirements of Rule 144 under the Securities Act.
[ ] Such Warrant is being transferred to a
qualified institutional buyer (as defined in Rule 144A under the Securities
Act), in reliance on Rule 144A.
[ ] Such Warrant is being transferred pursuant to
an offshore transaction in accordance with Rule 904 under the Securities Act.
[ ] Such Warrant is being transferred pursuant to
another available exemption from the registration
requirements under the Securities Act.
The Company is entitled to rely upon this
Certificate and are irrevocably authorized to produce this Certificate or a
copy hereof to any interested party in any administrative or legal proceedings
or official inquiry with respect to the matters covered hereby.
[INSERT NAME OF TRANSFEROR]
By
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Title:
Date
