EXHIBIT 4.2
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER THE
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND
SUCH LAWS.
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MIDWAY GAMES INC.
COMMON STOCK PURCHASE WARRANT
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This certifies that, for good and valuable consideration,
Midway Games Inc., a Delaware corporation (the "Company"), grants to Xxxxxx
Xxxxxx Xxxxxxxx & Co., Inc., or registered assigns (the "Warrantholder"), the
right to subscribe for and purchase from the Company _________ validly issued,
fully paid and nonassessable shares (the "Warrant Shares") of the Company's
Common Stock, par value $.01 per share (the "Common Stock"), at the purchase
price per share of $9.33 (the "Exercise Price"), from time to time, prior to
5:00PM Eastern Standard Time on May __, 2006 (the "Expiration Date"), all
subject to the terms, conditions and adjustments herein set forth. Capitalized
terms shall have the meanings set forth in Section 17 of this Warrant.
Certificate No.: ___________
Number of Warrant Shares: __________
Name of Warrantholder: Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
1. Duration and Exercise of Warrant; Limitation on Exercise; Payment of
Taxes.
1.1. Duration and Exercise of Warrant. Subject to the terms and
conditions set forth herein, the Warrant may be exercised, in whole or in part,
by the Warrantholder by:
(a) the surrender of this Warrant to the Company, with a duly
executed Exercise Form specifying the number of Warrant Shares to be purchased,
during normal business hours on any Business Day prior to the Expiration Date;
and
(b) the delivery of payment to the Company, for the account of
the Company, by cash, by wire transfer of immediately available funds or by
certified or bank cashier's check, of the Exercise Price for the number of
Warrant Shares specified in the Exercise Form in lawful money of the United
States of America. The Company agrees that such Warrant Shares shall be deemed
to be issued to the Warrantholder as the record holder of such Warrant Shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for the Warrant Shares as aforesaid (or as provided
in Section 1.2 below).
1.2. Conversion Right (Cashless Exercise).
(a) In lieu of the payment of the Exercise Price, the
Warrantholder shall have the right (but not the obligation), to require the
Company to convert this Warrant, in whole or in part, into shares of Common
Stock (the "Conversion Right") as provided for in this Section 1.2. Upon
exercise of the Conversion Right, the Company shall deliver to the Warrantholder
(without payment by the Warrantholder of any of the Exercise Price; provided,
however, that the Warrantholder shall be required to pay the par value for any
shares of Common Stock so delivered) that number of shares of Common Stock equal
to the quotient obtained by dividing (i) the value of the Warrant (or portion
thereof being converted) at the time the Conversion Right is exercised
(determined by subtracting the aggregate Exercise Price in effect immediately
prior to the exercise of the Conversion Right from the aggregate Fair Market
Value for the shares of Common Stock issuable upon exercise of the Warrant (or
portion thereof being converted) immediately prior to the exercise of the
Conversion Right) by (ii) the Fair Market Value of one share of Common Stock
immediately prior to the exercise of the Conversion Right.
(b) The Conversion Right may be exercised by the Warrantholder on
any Business Day on or before the Expiration Date by delivering the Warrant
Certificate, together with a duly executed Exercise Form (with the conversion
section completed), to the Company, exercising the Conversion Right and
specifying the total number of shares of Common Stock the Warrantholder will be
issued pursuant to such conversion.
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(c) Fair Market Value of a share of Common Stock as of a
particular date (the "Determination Date") shall mean:
(i) If the Common Stock is listed on a national securities
exchange, then the Fair Market Value shall be the average of the last ten
(10) "daily sales prices" of the Common Stock on the principal national
securities exchange on which the Common Stock is listed or admitted for
trading on the last ten (10) Business Days prior to the Determination Date,
or if not listed or traded on any such exchange, then the Fair Market Value
shall be the average of the last ten (10) "daily sales prices" of the
Common Stock on the National Market (the "National Market") of the National
Association of Securities Dealers Automated Quotations System ("Nasdaq") on
the last ten (10) Business Days prior to the Determination Date. The "daily
sales price" shall be the closing price of the Common Stock at the end of
each day; or
(ii) If the Common Stock is not so listed or admitted to
unlisted trading privileges or if no such sale is made on at least nine (9)
of such days, then the Fair Market Value shall be the higher of (x) the
Book Value per share and (y) the fair value as reasonably determined in
good faith by the Company's Board of Directors or a duly appointed
committee of the Board (which determination shall be described in detail in
the written notice delivered to the Warrantholder together with the Common
Stock certificates). If the Warrantholder objects to the fair value
determined by the Company's Board of Directors pursuant to clause (y)
above, the Warrantholder shall have the right to appoint an independent
appraiser (mutually consented to by the Company, such consent not to be
unreasonably withheld) to determine the fair value. The independent
appraiser shall be a nationally recognized investment banking firm or
nationally recognized expert experienced in the valuation of companies
engaged in the business conducted by the Company. The determination of such
independent appraiser as to the fair value shall be controlling. The fees
and expenses of the independent appraiser shall be paid by the Company
unless the fair value determined by the Company's Board of Directors equals
or exceeds the fair value determined by the independent appraiser.
1.3. Limitations on Exercise. Notwithstanding anything to the contrary
herein, this Warrant may be exercised only upon the delivery to the Company of
any certificates, opinions or other documents reasonably requested by the
Company to satisfy the Company that the proposed exercise of this Warrant may be
effected without registration under the Securities Act.
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1.4. Warrant Shares Certificate. A stock certificate or certificates
for the Warrant Shares specified in the Exercise Form shall be delivered to the
Warrantholder within ten (10) Business Days after receipt of the Exercise Form,
receipt of any certificates, opinions or other documents reasonably requested by
the Company pursuant to Section 1.3, and, if such exercise is not pursuant to
Section 1.2, receipt of payment of the purchase price. If this Warrant shall
have been exercised only in part, the Company shall, at the time of delivery of
the stock certificate or certificates, deliver to the Warrantholder a new
Warrant evidencing the rights to purchase the remaining Warrant Shares, which
new Warrant shall in all other respects be identical to this Warrant.
1.5. Payment of Taxes. The issuance of certificates for Warrant Shares
shall be made without charge to the Warrantholder for any stock transfer or
other issuance tax in respect thereto; provided, however, that the Warrantholder
shall be required to pay any and all taxes which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Warrantholder as reflected upon the books of the
Company.
1.6. Divisibility of Warrant; Transfer of Warrant.
(a) Subject to the provisions of this Section 1.6, this Warrant
may be divided into warrants of one thousand (1,000) shares or multiples
thereof, upon surrender at the principal office of the Company, without charge
to any Warrantholder. Upon such division, the Warrants may be transferred of
record as the then Warrantholder may specify without charge to such
Warrantholder (other than any applicable transfer taxes). In addition, subject
to the provisions of this Section 1.6, the Warrantholder shall also have the
right to transfer this Warrant in its entirety to any person or entity;
provided, however, that any such transfer is in compliance with any and all
applicable securities laws and is exempt from registration.
(b) Upon surrender of this Warrant to the Company with a duly
executed Assignment Form and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant or Warrants of
like tenor in the name of the assignee named in such Assignment Form, and this
Warrant shall promptly be canceled. Each Warrantholder agrees that prior to any
proposed transfer (whether as the result of a division or otherwise) of this
Warrant, such Warrantholder shall give written notice to the Company of such
Warrantholder's intention to effect such transfer. Each such notice shall
describe the manner and circumstances of the proposed transfer in sufficient
detail, and, if reasonably requested by the Company, shall be accompanied by a
written opinion of legal counsel, which opinion shall be addressed to the
Company and be reasonably satisfactory in form and substance to the Company's
counsel, to
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the effect that the proposed transfer of this Warrant may be effected without
registration under the Securities Act; provided, however, that no opinion of
counsel shall be necessary for a transfer of this Warrant by the Warrantholder
to its stockholders, officers, directors or employees. In addition, the
Warrantholder and the transferee shall execute any documentation reasonably
required by the Company to ensure compliance with the Securities Act. The term
"Warrant" as used in this Agreement shall be deemed to include any Warrants
issued in substitution or exchange for this Warrant.
2. Restrictions on Transfer;
Restrictive Legends.
Except as otherwise permitted by this Section 2, each Warrant shall
(and each Warrant issued upon direct or indirect transfer or in substitution for
any Warrant pursuant to Section 1.6 or Section 4 shall) be stamped or otherwise
imprinted with a legend in substantially the following form:
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY
INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND
SUCH LAWS.
Except as otherwise permitted by this Section 2, each stock certificate for
Warrant Shares issued upon the exercise of any Warrant and each stock
certificate issued upon the direct or indirect transfer of any such Warrant
Shares shall be stamped or otherwise imprinted with a legend in substantially
the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS
OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.
Notwithstanding the foregoing, the Warrantholder may require the
Company to issue a Warrant or a stock certificate for Warrant Shares, in each
case without a legend, if: (i) such Warrant or such Warrant Shares, as the case
may be, have been registered for resale under the Securities Act under a then
effective registration statement, (ii) the Warrantholder has delivered to the
Company an opinion of legal counsel, which opinion shall be addressed to the
Company and be reasonably satisfactory in form and substance to the Company's
counsel, to
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the effect that such registration is not required with respect to such Warrant
or such Warrant Shares, as the case may be, or (iii) such Warrant or Warrant
Shares, as the case may be, may be sold without restriction (including, without
limitation, as to volume) pursuant to Rule 144.
3. Company Representations, Warranties and Covenants.
The Company hereby represents, warrants, covenants and agrees as
follows:
3.1. All Warrant Shares which are issued upon the exercise of
this Warrant will, upon issuance, be validly issued, fully paid, and
nonassessable, not subject to any preemptive rights, and free from all taxes,
liens, security interests, charges, and other encumbrances with respect to the
issue thereof, other than taxes with respect to any transfer occurring
contemporaneously with such issue;
3.2. During the period within which this Warrant may be exercised, the
Company will at all times have authorized and reserved, and keep available free
from preemptive rights, a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this Warrant;
3.3. The Company will, from time to time, take all such action as may
be required to assure that the par value per share of the Warrant Shares is at
all times equal to or less than the then effective Exercise Price;
3.4. The Company shall not, by amendment of its certificate of
incorporation or through any reorganization, transfer of assets, spin-off,
consolidation, merger, dissolution, issue or sale of securities or any other
action or inaction, seek to avoid the observance or performance of any of the
terms of this Warrant, and shall at all times in good faith assist in performing
and giving effect to the terms hereof;
3.5. This Warrant has been duly authorized and executed by the Company
and is a valid and binding obligation of the Company enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting the enforcement of
creditors' rights;
3.6. The execution and delivery of this Warrant are not, and the
issuance of the Warrant Shares upon exercise of this Warrant in accordance with
the terms hereof will not be, in violation of the Company's certificate of
incorporation or bylaws, do not and will not contravene any law, governmental
rule or regulation, judgment or order applicable to the Company, and do not and
will not conflict with or contravene any provision of, or constitute a material
default under, any material indenture, mortgage, contract or other instrument of
which the Company is a
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party or by which it is bound or require the consent or approval of, the giving
of notice to, the registration or filing with or the taking of any action in
respect of or by, any federal, state or local government authority or agency
(other than such consents, approvals, notices, actions or filings as have
already been obtained or made and to the extent that stockholder approval may be
required pursuant to the rules of The New York Stock Exchange, Inc. (the "NYSE")
for the issuance of a number of Warrant Shares, together with common stock
issuable upon conversion or exercise of the Series B Convertible Preferred Stock
under the Certificate of Designations, Preferences and Rights of the Series B
Convertible Preferred Stock of Midway Games Inc., dated May 21, 2001 (the
"Certificate of Designations") and the related warrants, greater than 19.99% of
the number of shares of Common Stock outstanding immediately prior to the date
hereof (the "19.99% Rule")); and
3.7. The authorized capital stock of the Company consists of (a)
100,000,000 shares of Common Stock, of which 37,723,693 shares are issued and
outstanding and 1,178,500 shares are held in treasury, and (b) 5,000,000 shares
of Preferred Stock, par value $.01 per share, none of which are issued and
outstanding, except the preferred shares being issued on the date hereof. All
issued and outstanding shares of the Company have been duly authorized and
validly issued, and are fully paid and nonassessable, and such shares have been
issued in compliance with all applicable federal and state securities laws.
4. Loss or Destruction of Warrant.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant and, in the case
of loss, theft or destruction, of such bond or indemnification as the Company
may reasonably require, and, in the case of such mutilation, upon surrender and
cancellation of this Warrant, the Company will execute and deliver a new Warrant
of like tenor.
5. Ownership of Warrant.
The Company may deem and treat the person in whose name this Warrant
is registered as the holder and owner hereof (notwithstanding any notations of
ownership or writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration of transfer.
6. Certain Adjustments.
6.1. The number of Warrant Shares purchasable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment as follows:
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(a) Stock Dividends. If at any time after the date of the
issuance of this Warrant (i) the Company shall fix a record date for the
issuance of any stock dividend payable in shares of Common Stock or (ii) the
number of shares of Common Stock shall have been increased by a subdivision or
split-up of shares of Common Stock, then, on the record date fixed for the
determination of holders of Common Stock entitled to receive such dividend or
immediately after the effective date of such subdivision or split up, as the
case may be, the number of shares to be delivered upon exercise of this Warrant
will be increased so that the Warrantholder will be entitled to receive the
number of shares of Common Stock that such Warrantholder would have owned
immediately following such action had this Warrant been exercised in full
immediately prior thereto, and the Exercise Price will be adjusted as provided
below in paragraph (g).
(b) Combination of Stock. If the number of shares of Common Stock
outstanding at any time after the date of the issuance of this Warrant shall
have been decreased by a combination of the outstanding shares of Common Stock,
then, immediately after the effective date of such combination, the number of
shares of Common Stock to be delivered upon exercise of this Warrant will be
decreased so that the Warrantholder thereafter will be entitled to receive the
number of shares of Common Stock that such Warrantholder would have owned
immediately following such action had this Warrant been exercised in full
immediately prior thereto, and the Exercise Price will be adjusted as provided
below in paragraph(f).
(c) Reorganization, Merger, etc. If any capital reorganization of
the Company, any reclassification of the Common Stock, any consolidation of the
Company with or merger of the Company with or into any other person, or any sale
or lease or other transfer of all or substantially all of the assets of the
Company to any other person (each, a "Transaction"), shall be effected in such a
way that the holders of Common Stock shall be entitled to receive stock, other
securities or assets (whether such stock, other securities or assets are issued
or distributed by the Company or another person) with respect to or in exchange
for Common Stock, then, upon exercise of this Warrant, the Warrantholder shall
have the right to receive the kind and amount of stock, other securities or
assets receivable upon such Transaction by a holder of the number of shares of
Common Stock that such Warrantholder would have been entitled to receive upon
exercise of this Warrant had this Warrant been exercised in full immediately
before such Transaction. No Transaction shall be consummated unless adequate
provision (in the reasonable opinion of the Warrantholder) has been made in the
definitive agreement for the adjustments set forth herein and for the successor
entity in any such Transaction to assume the Company's obligations hereunder.
The provisions of this Section 6.1(c) shall similarly apply to successive
Transactions.
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(d) Fractional Shares. No fractional shares of Common Stock or
scrip shall be issued to any Warrantholder in connection with the exercise of
this Warrant. Instead of any fractional shares of Common Stock that would
otherwise be issuable to such Warrantholder, the Company will pay to such
Warrantholder a cash adjustment in respect of such fractional interest in an
amount equal to that fractional interest of the then current Fair Market Value
per share of Common Stock.
(e) Carryover. Notwithstanding any other provision of this
Section 6, no adjustment shall be made to the number of shares of Common Stock
to be delivered to the Warrantholder (or to the Exercise Price) if such
adjustment represents less than 1% of the number of shares to be so delivered,
but any lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which together with any
adjustments so carried forward shall amount to 1% or more of the number of
shares to be so delivered.
(f) Exercise Price Adjustment. Whenever the number of Warrant
Shares purchasable upon the exercise of this Warrant is adjusted as provided in
this Section 6.1 (other than pursuant to Section 6.1(g)), the Exercise Price
payable upon the exercise of this Warrant shall be adjusted by multiplying such
Exercise Price immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of Warrant Shares purchasable upon the exercise of
the Warrant immediately prior to such adjustment, and of which the denominator
shall be the number of Warrant Shares purchasable immediately thereafter.
(g) Adjustment of Number of Warrant Shares Purchasable. Upon any
adjustment of the Exercise Price as provided in this Section 6.1 (other than
pursuant to Section 6.1(f)), the holder hereof shall thereafter be entitled to
purchase, at the Exercise Price resulting from such adjustment, the number of
shares of Common Stock (calculated to the nearest .001 of a share) obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of shares of Common Stock purchasable hereunder immediately prior to
such adjustment and dividing the product thereof by the Exercise Price resulting
from such adjustment.
6.2. Notice of Adjustments. Whenever the number of Warrant Shares or
the Exercise Price of such Warrant Shares is adjusted, as herein provided, the
Company shall promptly mail by first class, postage prepaid, to the
Warrantholder, notice of such adjustment or adjustments setting forth in
reasonable detail the number of Warrant Shares and the Exercise Price of such
Warrant Shares after such adjustment, a brief statement of the facts requiring
such adjustment, and the computation by which such adjustment was made.
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6.3. Notice of Extraordinary Corporate Events. In case the Company
after the date hereof shall propose to (a) distribute any dividend (whether
stock or cash or otherwise) to the holders of shares of Common Stock or to make
any other distribution to the holders of shares of Common Stock, (b) offer to
the holders of shares of Common Stock rights to subscribe for or purchase any
additional shares of any class of stock or any other rights or options, or (c)
effect any reclassification of the Common Stock (other than a reclassification
involving merely the subdivision or combination of outstanding shares of Common
Stock), any capital reorganization, any consolidation or merger (other than a
merger in which no distribution of securities or other property is to be made to
holders of shares of Common Stock), any sale, transfer or other disposition of
all or substantially all of its property, assets and business, or the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall mail to each Warrantholder notice of such proposed action,
which notice shall specify the date on which (i) the books of the Company shall
close, or (ii) a record shall be taken for determining the holders of Common
Stock entitled to receive such stock dividends or other distribution or such
rights or options, or (iii) such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition, liquidation,
dissolution or winding up shall take place or commence, as the case may be, and
the date, if any, as of which it is expected that holders of record of Common
Stock shall be entitled to receive securities or other property deliverable upon
such action. Such notice shall be mailed at least 15 days prior to the record
date for determining holders of Common Stock for purposes of receiving such
payment, offer, securities or other property.
6.4. Effect of Failure to Notify. Failure to file any certificate or
notice or to mail any notice, or any defect in any certificate or notice,
pursuant to Sections 6.2 and 6.3 shall not affect the legality or validity of
the adjustment to the Exercise Price, the number of shares purchasable upon
exercise of this Warrant, or any transaction giving rise thereto.
7. Registration Rights.
7.1. Shelf Registration. Not later than 120 days from the date of this
Warrant, the Company shall effect registration of all Registrable Securities
under the Securities Act; provided, however, that each of the Holders may inform
the Company in writing that it wishes to exclude all or a portion of its
Registrable Securities from such registration, in which event such Holder's
rights under this Section 7.1 shall terminate with respect to that offering.
7.2. Incidental Registration.
(a) If at any time the Company proposes to register for its own
account any of its Common Stock under the
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Securities Act by registration on any form other than Form S-4 or S-8 (even if
other stockholders will participate in such registration), it shall each such
time give prompt written notice to all registered Holders of Registrable
Securities of its intention to do so and of such Holders' rights under this
Section 7.2. Upon the written request of any such Holder (a "Requesting Holder")
made as promptly as practicable after the receipt of any such notice (which
request shall specify the Registrable Securities intended to be disposed of by
such Requesting Holder and the intended method of disposition), the Company
shall use its reasonable best efforts to effect the registration under the
Securities Act of all Registrable Securities that the Company has been so
requested to register by the Requesting Holders thereof to the extent required
to permit the disposition of such Registrable Securities in accordance with the
intended methods thereof described as aforesaid; provided, however, that, in the
case of an underwritten offering, prior to the effective date of the
registration statement filed in connection with such registration, immediately
upon notification to the Company from the managing underwriter of the price at
which such securities are to be sold, if such price is below the price which any
Requesting Holder shall have indicated to be acceptable to such Requesting
Holder, the Company shall so advise such Requesting Holder of such price, and
such Requesting Holder shall then have the right to withdraw its request to have
its Registrable Securities included in such registration statement; provided
further, that if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Requesting Holder of Registrable Securities and (i) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from any obligation of the Company to pay the registration expenses in
connection therewith), without prejudice, however, to the rights of any Holder
or Holders of Registrable Securities under Section 7.1, and (ii) in the case of
a determination to delay registering, shall be permitted to delay registering
any Registrable Securities, for the same period as the delay in registering such
other securities. No registration effected under this Section 7.2 shall relieve
the Company of its obligations under Section 7.1. Notwithstanding the foregoing,
if registration pursuant to Section 7.1 is effective at the time the Company
proposes to effect a registration subject to this Section 7.2, the Company shall
have no obligation to notify the Holders of Registrable Securities or effect the
registration of any such securities under this Section 7.2 unless the securities
to be registered by the Company are to be disposed of in an underwritten
offering.
(b) If the managing underwriter of any underwritten offering
under this Section 7.2 shall inform the
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Company by letter that, in its opinion, the number or type of Registrable
Securities requested to be included in such registration would adversely affect
such offering, and the Company has so advised the Requesting Holders in writing,
then the Company will include in such registration, to the extent of the number
and type that the Company is so advised can be sold in (or during the time of)
such offering, first, all securities proposed by the Company to be sold for its
own account, second, any holders with contractual rights senior to the
Warrantholder, third, such Registrable Securities requested to be included in
such registration pursuant to this Warrant, pro rata among such Requesting
Holders on the basis of the estimated proceeds from the sale thereof and,
fourth, all other securities proposed to be registered.
8. Obligations of the Company. In connection with the registration of the
Registrable Securities as contemplated by Section 7.1 or 7.2, the Company shall:
8.1. Prepare and file promptly (and in any event, with respect to
Section 7.1, within forty-five (45) days of the date of this Warrant and, with
respect to Section 7.2, within forty-five (45) days of delivery of a written
request from a Requesting Holder to register Registrable Securities) with the
SEC a registration statement or statements or similar documents (the
"Registration Statement") with respect to (a) in the case of registration
contemplated by Section 7.1, all Registrable Securities, and thereafter use its
best efforts to cause the Registration Statement to become effective not later
than 120 days from the date of this Warrant and keep the Registration Statement
effective pursuant to Rule 415 at all times until the third anniversary of such
effective date, and (b) in the case of incidental registration pursuant to
Section 7.2, the securities to be sold by the Company together with the
Registrable Securities to be sold by the Requesting Holders, and thereafter use
its reasonable commercial efforts to cause the Registration Statement to become
effective, which Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein), in each case, shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein, or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
8.2. Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective and to comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement until such time as
all of such Registrable Securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
the
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Registration Statement or the expiration of three years from the date the
registration statement is declared effective by the SEC;
8.3. Furnish to each Holder whose Registrable Securities are included
in the Registration Statement (without charge to the Holders) such number of
copies of a prospectus, including a preliminary prospectus and all amendments
and supplements thereto and such other documents, as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Holder; the Company consents to the use of the prospectus and any
amendment or supplement thereto by each Holder in connection with the offering
and the sale of the Registrable Securities covered by the prospectus or any
amendment or supplement thereto;
8.4. Use its reasonable commercial efforts to (a) register and qualify
the Registrable Securities covered by the Registration Statement under such
other securities or Blue Sky laws of such jurisdictions as the Holders who hold
a majority in interest of the Registrable Securities reasonably request, (b)
prepare and file in those jurisdictions all required amendments (including
post-effective amendments) and supplements, (c) take such other reasonable
actions as may be necessary to maintain such registrations and qualifications in
effect at all times the Registration Statement is in effect and (d) take all
other reasonable actions necessary or advisable to enable the disposition of
such securities in all such jurisdictions; provided, however, that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 8.4;
8.5. (a) In the case of registration contemplated by Section 7.2, in
the event of an underwritten offering, enter into and perform its obligations
under an underwriting agreement with the managing underwriter of such offering,
in usual and customary form, including, without limitation, customary
indemnification and contribution obligations, and (b) in the case of any
non-underwritten offering, provide to broker-dealers participating in any
distribution of Registrable Securities reasonable indemnification substantially
similar to that provided by Section 11.1;
8.6. Promptly (and in any event within one (1) Business Day) notify
each Holder of the happening of any event of which the Company has knowledge, as
a result of which the prospectus included in the Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances then existing, not misleading, and use
its reasonable commercial efforts to prepare promptly a supplement or amendment
to the Registration Statement to correct such untrue statement or omission, and
deliver a number of copies of such
13
supplement or amendment to each Holder as such Holder may reasonably request;
8.7. Promptly (and in any event within one (1) Business Day) notify
each Holder who holds Registrable Securities being sold (and, in the event of an
underwritten offering, the managing underwriters) of the issuance by the SEC of
any stop order or other suspension of effectiveness of the Registration
Statement, and use its reasonable commercial efforts to obtain the withdrawal of
any order suspending the effectiveness of the Registration Statement at the
earliest possible time;
8.8. Permit a single firm of counsel designated as selling
stockholders' counsel by the Holders who hold a majority in interest of the
Registrable Securities being sold to review the Registration Statement and all
amendments and supplements thereto (excluding Exchange Act filings) a reasonable
period of time prior to their filing with the SEC, and shall not file any
document in a form to which such counsel reasonably objects;
8.9. Make generally available to its security holders as soon as
practicable, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the Securities Act) covering a twelve-month period beginning not
later than the first day of the Company's fiscal quarter next following the
effective date of the Registration Statement;
8.10. Make available for inspection by any Holder, any underwriter
participating in any disposition pursuant to the Registration Statement, and any
attorney, accountant, or other agent retained by any such Holder or underwriter
(collectively, the "Inspectors"), all pertinent financial and other records,
pertinent corporate documents and properties of the Company, as shall be
reasonably necessary to enable each Inspector to exercise its due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such Inspector in connection
with the Registration Statement;
8.11. Use its reasonable commercial efforts either to (a) cause all
the Registrable Securities covered by the Registration Statement to be listed on
a national securities exchange and on each additional national securities
exchange on which similar securities issued by the Company are then listed, if
any, if the listing of such Registrable Securities is then permitted under the
rules of such exchange or, (b) if similar securities issued by the Company are
not then listed on a national securities exchange, cause all the Registrable
Securities covered by the Registration Statement to be listed or included for
trading on the exchange or quotation system on which similar securities issued
by the Company are then listed or traded;
14
8.12. Provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the effective date of the
Registration Statement;
8.13. Cooperate with the Holders who hold Registrable Securities being
sold to facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legends) representing Registrable Securities to be sold
pursuant to the Registration Statement and enable such certificates to be in
such denominations or amounts, as the case may be, and registered in such names
as the Holders may reasonably request;
8.14. Promptly (and in any event within one (1) Business Day) notify
each Holder when the prospectus or any prospectus supplement or post-effective
amendment has been filed, and with respect to the Registration Statement or any
post-effective amendment thereto, when the same has become effective; and
8.15. Take all other reasonable actions necessary to expedite and
facilitate disposition by the Holders of the Registrable Securities pursuant to
the Registration Statement.
9. Obligations of the Holders.
9.1. It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Warrant with respect to each Holder
that such Holder shall furnish to the Company such information regarding itself,
the Registrable Securities held by it and the intended method of disposition of
such securities as shall be reasonably required to effect the registration of
the Registrable Securities and shall execute such documents and agreements in
connection with such registration as the Company may reasonably request, all in
a timely manner so as to enable the Company to comply with its obligations
hereunder. At least ten (10) days prior to the first anticipated filing date of
the Registration Statement, the Company shall notify each Holder of the
information the Company requires from each such Holder (the "Requested
Information") if such Holder elects to have any of its Registrable Securities
included in the Registration Statement. If within three (3) Business Days of the
filing date the Company has not received the Requested Information from a Holder
(a "Non-Responsive Holder") and the Company has properly notified such Holder in
accordance with the preceding sentence, then the Company may file the
Registration Statement without including Registrable Securities of such
Non-Responsive Holder;
9.2. Each Holder, by its acceptance of the Registrable Securities,
agrees to reasonably cooperate with the Company in connection with the
preparation and filing of any registration statement hereunder, unless, (a) in
the case of registration contemplated by Section 7.1, such Holder has
15
notified the Company in writing of his election to exclude all of its
Registrable Securities from the Registration Statement, or (b) in the case of
incidental registration pursuant to Section 7.2, such Holder has decided not to
participate;
9.3. In the case of registration contemplated by Section 7.2, in the
event of an underwritten offering, each Holder agrees to enter into and perform
its obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of the Registrable Securities, unless such Holder has decided not to
participate;
9.4. Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 8.6, such
Holder will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 8.6 and, if so directed by the Company, such
Holder shall deliver to the Company (at the expense of the Company) or destroy
(and deliver to the Company a certificate of such destruction) all copies, other
than permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Securities at the time of receipt of such notice; and
9.5. In the case of registration contemplated by Section 7.2, no
Holder may participate in any underwritten registration hereunder unless such
Holder (a) agrees to sell such Holder's Registrable Securities on the basis
provided in any underwriting arrangements approved by the Holders entitled
hereunder to approve such arrangements, (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and (c) agrees to pay such Holder's pro rata portion of all
underwriting discounts and commissions.
10. Expenses of Registration. All expenses (other than underwriting
discounts and commissions) incurred in connection with registration, filings or
qualifications pursuant to Section 7 and Section 8, including, without
limitation, all registration, listing, filing and qualification fees, printers
and accounting fees, the fees and disbursements of counsel for the Company and
the reasonable fees and disbursements (up to a maximum of $15,000 in the
aggregate) of one firm of counsel for the Holders, shall be borne by the
Company.
16
11. Indemnification. In the event any Registrable Securities are included
in a Registration Statement under this Agreement:
11.1. To the extent permitted by law, the Company will indemnify and
hold harmless each Holder who holds such Registrable Securities, the directors,
if any, of such Holder, the officers, if any, of such Holder, who sign the
Registration Statement, each person, if any, who controls such Holder, any
underwriter (as defined in the Securities Act) for the Holders, and each person,
if any, who controls any such underwriter within the meaning of the Securities
Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(each, an "Indemnified Holder"), against any losses, claims, damages, expenses,
liabilities (joint or several) (collectively, "Claims") to which any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such Claims (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively, a "Violation"): (a) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or any post-effective amendment thereof, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (b) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented if
the Company files any amendment thereof or supplement thereto with the SEC), or
the omission or alleged omission to state therein a material fact required to be
stated therein, or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, or (c) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law, or any rule or regulation promulgated
under the Securities Act, the Exchange Act, or any state securities law. Subject
to the restrictions set forth in Section 11.3 with respect to the number of
legal counsel, the Company shall reimburse the Holders and each such underwriter
or controlling person, promptly as such expenses are incurred and are due and
payable, for any legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim, whether or not such
claim, investigation or proceeding is brought or initiated by the Company or a
third party. If multiple claims are brought against an Indemnified Holder in an
arbitration proceeding, and indemnification is permitted under applicable law
and is provided for under this Section 11 with respect to at least one such
claim, the Company agrees that any arbitration award shall be conclusively
deemed to be based on claims as to which indemnification is permitted and
provided for, except to the extent the arbitration award expressly states that
the award, or any portion thereof, is based solely on a claim as to which
17
indemnification is not available. Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Section 11.1
(x) shall not apply to a Claim arising out of or based upon a Violation which
occurs solely in reliance upon and in conformity with information furnished in
writing to the Company by any Indemnified Holder expressly for use in connection
with the preparation of the Registration Statement or any such amendment thereof
or supplement thereto; and (y) shall not apply to amounts paid in settlement of
any Claim if such settlement is effected without the prior written consent of
the Company, which consent shall not be unreasonably withheld. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Indemnified Holder and shall survive the transfer of the
Registrable Securities by the Holders pursuant to Section 14.
11.2. In connection with any Registration Statement in which a Holder
is participating, each such Holder agrees to indemnify and hold harmless, to the
same extent and in the same manner set forth in Section 11.1, the Company, each
of its directors, each of its officers who sign the Registration Statement, each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act, any underwriter and any other stockholder selling
securities pursuant to the Registration Statement or any of its directors or
officers or any person who controls such stockholder or underwriter
(collectively and together with an Indemnified Holder, an "Indemnified Party"),
against any Claim to which any of them may become subject, under the Securities
Act, the Exchange Act or otherwise, insofar as such Claim arises out of or is
based upon any Violation, in each case to the extent (and only to the extent)
that such Violation occurs solely in reliance upon and in conformity with
written information furnished to the Company by such Holder expressly for use in
connection with such Registration Statement; and such Holder will reimburse any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 11.2 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such Holder, which consent shall not be unreasonably withheld;
provided, further, that the Holder shall in no event be liable under this
Section 11.2 for any amount of a Claim that exceeds the net proceeds to such
Holder as a result of the sale of Registrable Securities pursuant to such
Registration Statement.
11.3. Promptly after receipt by an Indemnified Party under this
Section 11 of notice of the commencement of any action (including any
governmental action), such Indemnified Party shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Section 11,
deliver to the indemnifying party a written notice of the commencement thereof,
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly
18
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel satisfactory to the Indemnified Parties; provided,
however, that an Indemnified Party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if, in
the reasonable opinion of counsel for the Indemnified Party, representation of
such Indemnified Party by the counsel retained by the indemnifying party would
be inappropriate due to actual or potential differing interests between such
Indemnified Party and any other party represented by such counsel in such
proceeding. The Company shall pay for only one legal counsel for the Holders;
such legal counsel shall be selected by the Holders holding a majority in
interest of the Registrable Securities. The failure by an Indemnified Party to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Party under this Section 11, except to the extent
that such failure to notify results in the forfeiture by the indemnifying party
of substantive rights or defenses. The indemnification required by this Section
11 shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.
12. Contribution. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 11 to the fullest extent permitted by law; provided,
however, that (a) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 11, (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation and (c)
contribution by any seller of Registrable Securities shall be limited in amount
to the net amount of proceeds received by such seller from the sale of such
Registrable Securities.
13. Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the SEC that may at
any time permit the Holders to sell securities of the Company to the public
without registration ("Rule 144"), the Company agrees to use commercially
reasonable efforts to:
(a) comply with the requirements of paragraph (c) of Rule 144
with respect to current public information about the Company;
19
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to each Holder so long as such Holder owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company as to whether it has complied with the requirements of said Rule 144(c)
and the reporting requirements of the Securities Act and the Exchange Act (at
any time after it has become subject to such reporting requirements), (ii) a
copy of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit the Holders to sell such securities
without registration.
14. Assignment of Registration Rights. The right to have the Company
register Registrable Securities pursuant to this Warrant shall be automatically
assigned by the Holders to transferees or assignees of this Warrant or such
Registrable Securities, provided that immediately following such transfer or
assignment, the further disposition of such securities by the transferee or
assignee would be subject to restrictions under the Securities Act. The term
"Holders" as used herein shall include permitted assignees and transferees.
15. Amendments. Any provision of this Warrant (including registration
rights) may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holders who
hold a majority in interest of the Registrable Securities. Any amendment or
waiver effected in accordance with this Section 15 shall be binding upon each
Holder and the Company.
16. Expiration of the Warrant. The right to exercise this Warrant shall
terminate on the Expiration Date. All terms of this Warrant applicable to the
Warrant Shares, including, without limitation, Sections 7 through 14, inclusive,
shall survive exercise and/or expiration of this Warrant.
17. Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:
19.99% Rule: the meaning specified in Section 3.6.
Anniversary Date: the 365 day anniversary of the date of this Warrant.
Assignment Form: an Assignment Form in the form annexed hereto as
Exhibit B.
Bloomberg: Bloomberg Financial Markets.
20
Book Value: per share of Common Stock as of any date herein shall mean the
Consolidated Net Worth of the Company and its Subsidiaries as of such date
divided by the number of shares of Common Stock outstanding as of such date.
Business Day: any day other than a Saturday, Sunday or a day on which
national banks are authorized by law to close in The City of Chicago, State of
Illinois.
Certificate of Designations: the meaning specified in Section 3.6.
Claims: the meaning specified in Section 11.1.
Common Stock: the meaning specified on the cover of this Warrant.
Company: the meaning specified on the cover of this Warrant.
Consolidated Net Worth: as of any date herein specified, the total
consolidated assets of the Company and its Subsidiaries minus the total
consolidated liabilities of the Company and its Subsidiaries (exclusive of any
liabilities associated with this Warrant) as determined from the consolidated
balance sheet of the Company and its Subsidiaries from the most recent fiscal
quarter, which consolidated balance sheet shall be prepared in accordance with
generally accepted accounting principles, shall be in reasonable detail, and
shall be certified as complete and correct by the chief financial or accounting
officer of the Company.
Determination Date: the meaning specified in Section 1.2(c).
Exchange Act: the meaning specified in Section 11.1 or any similar Federal
statute, and the rules and regulations of the SEC thereunder, all as the same
shall be in effect at the time. Reference to a particular section of the
Exchange Act shall include a reference to a comparable section, if any, of any
such similar Federal statute.
Exercise Form: an Exercise Form in the form annexed hereto as Exhibit A.
Exercise Price: the meaning specified on the cover of this Warrant.
Expiration Date: the meaning specified on the cover of this Warrant.
Fair Market Value: the meaning specified in Section 1.2(c).
21
Holder(s): holder(s) of Registrable Securities.
Indemnified Holder: the meaning specified in Section 11.1.
Indemnified Party: the meaning specified in Section 11.2.
Inspectors: the meaning specified in Section 8.10.
Nasdaq: the meaning specified in Section 1.2(c)(i).
National Market: the meaning specified in Section 1.2(c)(i).
NYSE: The New York Stock Exchange, Inc.
Non-Responsive Holder: the meaning specified in Section 9.1.
Other Securities: any stock and other securities of the Company (other than
Common Stock) or of any other entity which shall become subject to issue or sale
upon the conversion or exchange of any stock or other securities of the Company.
Principal Market: The New York Stock Exchange, Inc., or if the Common Stock
is not traded on The New York Stock Exchange, Inc., then the principal
securities exchange or trading market for the Common Stock.
Registrable Securities: (i) the Warrant Shares and other securities issued
or issuable upon exercise of the Warrants and (ii) any securities issued or
issuable with respect to any Common Stock or other securities referred to in
subdivision (i) by way of stock dividend or stock split or in connection with a
combination or other reorganization or otherwise.
Registration Statement: the meaning specified in Section 8.1.
Requested Information: the meaning specified in Section 9.1.
Requesting Holder: the meaning specified in Section 7.2(a).
Rule 144: the meaning specified in Section 13.
Rule 415: Rule 415 under the Securities Act or any successor rule providing
for offering securities on a continuous basis.
SEC: the Securities and Exchange Commission or any other Federal agency at
the time administering the Securities Act
22
or the Exchange Act, whichever is the relevant statute for the particular
purpose.
Securities Act: the meaning specified on the cover of this Warrant, or any
similar Federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect at the time. Reference to a particular
section of the Securities Act shall include a reference to the comparable
section, if any, of any such similar Federal statute.
Subsidiary: the meaning specified in Rule 405 under the Securities Act.
Transaction: the meaning specified in Section 6.1(c).
Violation: the meaning specified in Section 11.1.
Warrantholder: the meaning specified on the cover of this Warrant.
Warrant Shares: the meaning specified on the cover of this Warrant.
Weighted Average Price: for any security as of any date, the dollar
volume-weighted average price for such security on the Principal Market during
the period beginning at 9:30 a.m., New York City Time, and ending at 4:00 p.m.,
New York City Time, as reported by Bloomberg through its "Volume at Price"
function or, if the foregoing does not apply, the dollar volume-weighted average
price of such security in the over-the-counter market on the electronic bulletin
board for such security during the period beginning at 9:30 a.m., New York City
Time, and ending at 4:00 p.m., New York City Time, as reported by Bloomberg, or,
if no dollar volume-weighted average price is reported for such security by
Bloomberg for such hours, the average of the highest closing bid price and the
lowest closing ask price of any of the market makers for such security as
reported in the "pink sheets" by the National Quotation Bureau, Inc. If the
Weighted Average Price cannot be calculated for such security on such date on
any of the foregoing bases, the Weighted Average Price of such security on such
date shall be the Fair Market Value as determined in accordance with Section
1.2(c). All such determinations to be appropriately adjusted for any stock
dividend, stock split or other similar transaction during such period.
18. Miscellaneous.
18.1. Entire Agreement. This Warrant constitutes the entire agreement
between the Company and the Warrantholder with respect to the Warrants.
18.2. Binding Effects; Benefits. This Warrant shall inure to the
benefit of and shall be binding upon the
23
Company and the Warrantholder and their respective heirs, legal representatives,
successors and assigns. Nothing in this Warrant, expressed or implied, is
intended to or shall confer on any person other than the Company and the
Warrantholder, or their respective heirs, legal representatives, successors or
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Warrant.
18.3. Section and Other Headings. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or interpretation
of this Warrant.
18.4. Pronouns. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
18.5. Further Assurances. Each of the Company and the Warrantholder
shall do and perform all such further acts and things and execute and deliver
all such other certificates, instruments and documents as the Company or the
Warrantholder may, at any time and from time to time, reasonably request in
connection with the performance of any of the provisions of this Agreement.
18.6. Notices. All notices and other communications required or
permitted to be given under this Warrant shall be in writing and shall be deemed
to have been duly given if delivered personally or sent by United States mail,
postage prepaid, to the parties hereto at the following addresses or to such
other address as any party hereto shall hereafter specify by notice to the other
party hereto:
(a) if to the Company, addressed to:
Midway Games Inc.
0000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
(b) if to the Warrantholder, addressed to:
the address of such Warrantholder
appearing on the books of the Company.
Except as otherwise provided herein, all such notices and communications shall
be deemed to have been received on the date of delivery thereof, if delivered
personally, or on the third Business Day after the mailing thereof.
18.7. Separability. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to
24
the extent of such invalidity or unenforceability without rendering invalid or
unenforceable the terms and provisions of this Warrant or affecting the validity
or enforceability of any of the terms or provisions of this Warrant in any other
jurisdiction.
18.8. Governing Law. This Warrant shall be deemed to be a contract
made under the laws of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to such
agreements made and to be performed entirely within such State.
18.9. No Rights or Liabilities as Stockholder. Nothing contained in
this Warrant shall be determined as conferring upon the Warrantholder any rights
as a stockholder of the Company or as imposing any liabilities on the
Warrantholder to purchase any securities whether such liabilities are asserted
by the Company or by creditors or stockholders of the Company or otherwise.
[remainder of page intentionally left blank]
25
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
MIDWAY GAMES INC.
By:
--------------------------------
Name:
Title:
Dated: May __, 2001
26
Exhibit A
EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant, to purchase __________ of the Warrant Shares and
herewith tenders (i) payment for such Warrant Shares to the order of Midway
Games Inc. in the amount of $_________ or (ii) Warrants to purchase __________
shares of Common Stock in order to exercise the Conversion Right (as defined in
Section 1.2 of the Warrant) and payment of the par value for ________ of the
Warrant Shares, in either case, in accordance with the terms of this Warrant.
The undersigned requests that a certificate for such Warrant Shares be
registered in the name of __________ and that such certificates be delivered to
__________ whose address is __________.
Dated:
------------------------
Signature
-------------------------------------
-------------------------------------
(Print Name)
-------------------------------------
(Street Address)
-------------------------------------
(City) (State) (Zip Code)
Signed in the Presence of:
---------------------------
Exhibit B
ASSIGNMENT FORM
(To be executed only upon transfer of this Warrant)
For value received, the undersigned registered holder of the within
Warrant hereby sells, assigns and transfers unto ______________________ the
right represented by such Warrant to purchase ______________ shares of Common
Stock of Midway Games Inc. to which such Warrant relates and all other rights of
the Warrantholder under the within Warrant (including, without limitation, the
registration rights provided in Section 7 of the within Warrant), and appoints
___________________ Attorney to make such transfer on the books of Midway Games
Inc. maintained for such purpose, with full power of substitution in the
premises.
Dated:
------------------------
Signature
-------------------------------------
-------------------------------------
(Print Name)
-------------------------------------
(Street Address)
-------------------------------------
(City) (State) (Zip Code)
Signed in the Presence of:
---------------------------
