EXHIBIT 4.2
ACCLAIM ENTERTAINMENT, INC.
and
American Securities Transfer & Trust, Inc.
Warrant Agent
WARRANT AGREEMENT
Dated as of ______, 1999
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of _________________ ___, 1999,
between ACCLAIM ENTERTAINMENT, INC., a Delaware corporation (the "Company"), and
AMERICAN SECURITIES TRANSFER & TRUST, INC. (the "Warrant Agent").
WHEREAS, the Company proposes to issue [ ] ([ ]) common stock
purchase warrants (the "Warrants"), each to purchase one share of its common
stock, par value $.02 per share (the "Common Stock") (the shares of Common Stock
issuable on exercise of the Warrants being referred to herein as the "Warrant
Shares"), in connection with the settlement of a class action lawsuit (the
"Action") previously pending against the Company and certain officers of the
Company, in the Federal District Court in the Eastern District of New York (the
"Court") in accordance with a Stipulation of Settlement dated February 25, 1998
(the "Stipulation") between the Company and the participants in such settlement,
following the Effective Date (as defined in the Stipulation) and concurrently
with the effectiveness of the Company's registration statement referred to in
Section 2.3 hereof;
WHEREAS, the Company proposes to issue certificates evidencing
the Warrants (the "Warrant Certificates");
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act, in connection
with the issuance, registration, division, transfer, exchange, redemption and
surrender of the Warrants, the issuance of certificates representing the
Warrants, the exercise of the Warrants, and the rights of the registered holders
thereof;
WHEREAS, a registration statement covering the issuance of the
Warrant Shares has been filed by the Company with the United States Securities
and Exchange Commission (the "SEC") pursuant to Section 2.3 hereof.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained and for the purpose of defining the terms and
provisions of the Warrants, the Warrant Certificates and the respective rights
and obligations thereunder of the Company, the registered holders of the
Warrants and the Warrant Agent, the parties hereto hereby agree as follows:
Article I
DISTRIBUTION OF WARRANT CERTIFICATES
Section 1.1 Appointment of Warrant Agent. The Company hereby
appoints the Warrant Agent to act on behalf of the Company in accordance with
the instructions hereinafter set forth, and the Warrant Agent hereby accepts
such appointment.
Section 1.2 Form of Warrant Certificates. The Warrant
Certificates shall be issued in registered form only and, together with the
forms of election to purchase Warrant Shares and of assignment to be printed on
the reverse thereof, shall be substantially in the form of Exhibit A attached
hereto and, in addition, may have such letters, numbers or other marks of
identification or designation and such legends, summaries, or endorsements
stamped, printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as, in any particular case, may be required in the opinion of counsel for the
Company, to comply with any law or with any rule or regulation of any securities
exchange, regulatory authority or agency, or to conform to customary usage. The
Warrant Certificates shall be dated the date of issuance thereof (whether upon
initial issuance, transfer, exchange or in lieu of mutilated, lost, stolen or
destroyed Warrant Certificates) and shall be numbered serially with the letter
"W".
Section 1.3 Execution of Warrant Certificates. The Warrant
Certificates shall be executed on behalf of the Company by its Chairman or
President or any Executive Vice President and attested to by its Secretary or
Assistant Secretary, either manually or by facsimile signature printed thereon.
The Warrant Certificates shall be manually countersigned and (except as set
forth in Sections 1.4 and 2.2 hereof) dated the date of countersignature by the
Warrant Agent and shall not be valid for any purpose unless so countersigned and
dated. In case any authorized officer of the Company who shall have signed any
of the Warrant Certificates shall cease to be such officer of the Company either
before or after delivery thereof by the Company to the Warrant Agent, the
signature of such person on such Warrant Certificates, nevertheless, shall be
valid and such Warrant Certificates may be countersigned by the Warrant Agent,
and issued and delivered to those persons entitled to receive the Warrants
represented thereby with the same force and effect as though the person who
signed such Warrant Certificates had not ceased to be such officer of the
Company.
Section 1.4 Registration. Prior to the 10th business day
following the delivery of directions relating to the Warrants by Plaintiffs'
Lead Counsel (as that term is defined in the Court order dated June 6, 1996
relating to the Action) or the settlement administrator to the Company, the
Company shall deliver to the Warrant Agent an adequate supply of Warrant
Certificates executed on behalf of the Company as described in Section 1.3
hereof. The Warrant Certificates shall initially be registered in the names of
those persons who are finally entitled as Authorized Claimants (as defined in
the Stipulation) and plaintiffs' counsel in the Action, as directed by the Court
to receive Warrant Certificates (the "Authorized Warrant Holders"). Each such
Warrant Certificate shall have imprinted on its face the commencement date (the
"Commencement Date"), which date shall be the 10th business day following the
date of delivery of directions by Plaintiffs' Lead Counsel or the settlement
administrator to the Company of a list containing the names of the Authorized
Warrant Holders and the number of Warrants to be issued to each. On or prior to
the Commencement Date, the Warrant Agent shall have mailed or caused to have
been mailed such Warrant Certificates to the Authorized Warrant Holders.
The Warrant Agent shall maintain books for the transfer and
registration of the Warrant Certificates in accordance with its regular
practice. The Warrant Certificates shall be registered in a Warrant Register as
they are issued. The Company and the Warrant Agent shall be entitled to treat
the registered owner(s) of the Warrant Certificates (the "Holder(s)") as the
owner(s) in fact thereof (notwithstanding any notation of ownership or other
writing on the Warrant Certificates made by anyone other than the Company or the
Warrant Agent), for the purpose of any exercise thereof and for all other
purposes, and neither the Company nor the Warrant Agent shall be affected by any
notice to the contrary.
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Section 1.5 Transfer of Warrants. The Warrant Certificates
shall be transferable only on the books of the Company maintained at the office
of the Warrant Agent designated for such purpose upon delivery thereof duly
endorsed by the Holder or by his duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment or authority to
transfer, which endorsement shall be guaranteed by a member firm of a national
securities exchange, a commercial bank (not a savings bank or a savings and loan
association) or trust company located in the United States or a member of the
National Association of Securities Dealers, Inc. (hereafter, "Signatures
Guaranteed"). In all cases of transfer by an attorney, the original power of
attorney, duly approved, or a copy thereof, duly certified, shall be deposited
and remain with the Warrant Agent. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited and remain with the Warrant Agent in its discretion.
A reasonable service charge may be imposed by the Warrant
Agent upon the Holder for any exchange or registration of transfer of Warrant
Certificates. The Company may require payment by a Holder of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith.
Article II
WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS
Section 2.1 Exercise Price. Each Warrant Certificate shall, when signed and
countersigned as provided in Section 1.3, entitle the Holder thereof to purchase
from the Company one share of Common Stock for each Warrant evidenced thereby,
at the purchase price of [ ] ([$ ]) per share (the "Exercise Price"), calculated
pursuant to the terms of Article I, Section 27 of the Stipulation. Except as the
context otherwise requires, the term "Exercise Price" as used in this Agreement
shall mean the purchase price of one share of Common Stock, reflecting all
appropriate adjustments made in accordance with the provisions of Article III
hereof.
Section 2.2 Exercisability of Warrants.
(a) Each Warrant may be exercised at any time after the
Commencement Date, provided that, at such time, such other action as may be
required by Federal or state law relating to the issuance or distribution of
securities shall have been taken, until 5:00 p.m., New York City time, on the
third anniversary of the Commencement Date (the "Exercise Deadline") unless
extended as provided herein. If the Warrants are not exercisable on the
Commencement Date by reason of any action required by Federal or state law, the
Exercise Deadline shall be extended for such period of time as shall be
necessary to permit the Warrants to be exercisable for a full three year period.
After the Exercise Deadline, any unexercised Warrants will be void and all
rights of Holders shall cease. Each Warrant Certificate shall have the Exercise
Deadline imprinted on its face. Subject to Section 2.3 hereof, the Company shall
use reasonable good faith efforts to keep available for delivery upon the
exercise of Warrants a prospectus that meets the requirements of Section 10 of
the Securities Act of 1933, as amended (the "Securities Act"), until the earlier
of the date by which all Warrants are exercised or the Exercise Deadline, unless
the Company determines that, by virtue of an amendment of the Securities Act or
otherwise, the effectiveness
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of such registration or the delivery of such prospectus is not required at the
time Warrant Shares are to be issued.
(b) In the event that, in the reasonable, good faith judgment
of the Company, it is advisable to suspend use of the prospectus described in
this Section 2.2, due to any request by the SEC or any other Federal or state
governmental authority for amendments or supplements to a registration statement
or related prospectus or for additional information; (ii) the issuance by the
SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of a registration statement or the initiation or
threat of any proceedings for that purpose; (iii) the receipt by the Company of
any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Common Stock for sale in any
jurisdiction or the initiation or threat of any proceeding for such purpose;
(iv) the existence of any fact or the happening of any event which makes any
statement of a material fact in such registration statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue or which would require the making of any changes in the
registration statement or prospectus in order that, in the case of the
registration statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; (v) the Company's
determination that a post-effective amendment to a registration statement would
be appropriate; or (vi) pending material corporate developments or similar
material events that have not yet been publicly disclosed and as to which the
Company believes public disclosure will be prejudicial to the Company, the
Company shall give written notice to the Warrant Agent to the effect of the
foregoing and to the effect that the Warrants may not be exercised during such
time period (the "Blackout Period"). In the event that a Holder seeks to
exercise a Warrant during the Blackout Period, the Warrant Agent will notify the
Holder, in accordance with Section 6.15 hereof, that a Blackout Period is in
effect. In no event shall the Company call more than two (2) sixty (60) day
Blackout Periods in any calendar year, nor may it call a Blackout Period sixty
(60) days prior to the Exercise Deadline. If the Company exercises its right to
call one or more Blackout Periods in accordance with this Section 2.2(b), the
Exercise Deadline shall be extended for a period of time equal to the aggregate
number of days in all such Blackout Periods so that the Warrants shall be
exercisable for a full three year period.
(c) If the Exercise Deadline shall be extended pursuant to
Section 2.2(a) or (b) above, notice of such extension shall be provided to the
Holders not later than 15 days prior to the Exercise Deadline appearing on the
face of the Warrants.
Section 2.3 Registration of Warrant Shares.
(a) The Company, at its sole cost and expense (other than the
fees and disbursements of counsel for the Holders and the underwriting
discounts, if any), has prepared and filed with the SEC a registration statement
on Form S-3 or any other available form approved by the SEC and available for
use by the Company (the "Registration Statement") registering the issuance by
the Company of the Warrant Shares. The Registration Statement was declared
effective by the SEC on ________ __, 1999. The Company shall use its reasonable
efforts through its officers, directors, auditors and counsel to cause the
Registration Statement to
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remain effective until the earlier of the date by which all Warrants are
exercised or the Exercise Deadline, unless the Company determines that, by
virtue of an amendment of the Securities Act or otherwise, the effectiveness of
the Registration Statement is not required at the time Warrant Shares are to be
issued.
(b) Subject to the conditions set forth below, the Company
agrees to indemnify and hold harmless the Holders, its officers, directors,
partners, employees, agents, counsel, Plaintiffs' Lead Counsel and each person,
if any, who controls any such person within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), from and against any and all loss, liability,
charge, claim, damage and expense whatsoever (which shall include, for all
purposes of this Section 2.3, but not be limited to, attorneys' fees and any and
all reasonable expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation) as and when incurred, arising out of, based upon or in connection
with any untrue statement or alleged untrue statement of a material fact
contained (A) in any Registration Statement, preliminary prospectus or final
prospectus (as from time to time amended and supplemented) or any amendment or
supplement thereto, relating to the sale of any of the Warrant Shares or (B) in
any application or other document or communication (in this Section 2.3
collectively called an "application") executed by or on behalf of a Holder or
based upon written information furnished by or on behalf of a Holder filed in
any jurisdiction in order to register or qualify any of the Warrant Shares under
the securities or blue sky laws thereof or filed with the SEC or any securities
exchange; or any omission or alleged omission to state a material fact required
to be stated therein or necessary to make the statements made therein not
misleading, unless (x) such statement or omission was made in reliance upon and
in conformity with written information furnished to the Company with respect to
a Holder by or on behalf of such Holder expressly for inclusion in any
Registration Statement, preliminary prospectus or final prospectus, or any
amendment or supplement thereto, or in any application, as the case may be, or
(y) such loss, liability, charge, claim, damage or expense arises out of a
Holder's failure to comply with the terms and provisions of this Agreement, or
(ii) any breach of any representation, warranty, covenant or agreement of a
Holder contained in this Agreement. The foregoing agreement to indemnify shall
be in addition to any remedy a Holder may otherwise have, including remedies
arising under this Agreement.
If any action is brought against a Holder or any of its
officers, directors, partners, employees, agents, counsel or Plaintiffs' Lead
Counsel (as that term is defined in the Stipulation), if any, or any controlling
persons of such person (an "Indemnified Party") in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
Indemnified Party or Parties shall promptly notify the Company in writing of the
institution of such action (but the failure so to notify shall not relieve the
Company from any liability other than pursuant to this Section 2.3(b)) and the
Company shall promptly assume the defense of such action, including the
employment of counsel (reasonably satisfactory to such Indemnified Party or
Parties) provided that the Indemnified Party shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party or Parties unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action or the Company shall not have
promptly employed counsel reasonably satisfactory to such Indemnified Party or
Parties to have charge of the defense of such action or such Indemnified Party
or Parties
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shall have reasonably concluded that there may be one or more legal defenses
available to it or them or to other Indemnified Parties which are different from
or in addition to those available to the Company, in any of which events such
fees and expenses shall be borne by the Company and the Company shall not have
the right to direct the defense of such action on behalf of the Indemnified
Party or Parties. Anything in this Section 2.3 to the contrary notwithstanding,
the Company shall not be liable for any settlement of any such claim or action
effected without its written consent. The Company shall not, without the prior
written consent of each Indemnified Party that is not released as described in
this sentence, settle or compromise any action, or permit a default or consent
to the entry of judgment in or otherwise seek to terminate any pending or
threatened action, in respect of which indemnity may be sought hereunder
(whether or not any Indemnified Party is a party thereto) unless such
settlement, compromise, consent or termination includes an unconditional release
of each Indemnified Party from all liability in respect of such action. The
Company agrees to notify the Holders promptly of the commencement of any
litigation or proceedings against the Company or any of it officers or directors
in connection with the sale of any Warrant Shares or any preliminary prospectus,
final prospectus, Registration Statement, or amendment or supplement thereto, or
any application relating to any sale of any Warrant Shares.
(c) The Holders agree to indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who shall
have signed any Registration Statement covering the Warrant Shares held by the
Holders, each other person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act and its
or their respective counsel and Plaintiffs' Co-Lead Counsel (as that term is
defined in the Stipulation), to the same extent as the foregoing indemnity from
the Company to the Holders in Section 2.3(b) hereof but only with respect to
statements or omissions, if any, made in any Registration Statement, preliminary
prospectus, or final prospectus (as from time to time amended and supplemented),
or any amendment or supplement thereto or in any application, in reliance upon
and in conformity with written information furnished to the Company with respect
to the Holders by or on behalf of a Holder, expressly for inclusion in any such
Registration Statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto or in any application, as the case may be. If
any action shall be brought against the Company or any other person to be so
indemnified based on any such Registration Statement, preliminary prospectus, or
final prospectus, or any amendment or supplement thereto or in any application,
and in respect of which indemnity may be sought against a Holder pursuant to
this Section 2.3(c), a Holder shall have the rights and duties given to the
Company, and the Company and each other person so indemnified shall have the
rights and duties given to the Indemnified Parties, by the provisions of Section
2.3(b).
(d) To provide for just and equitable contribution, if an
Indemnified Party makes a claim for indemnification pursuant to Section 2.3(b)
or 2.3(c) (subject to the limitations thereof) but it is found in a final
judicial determination, not subject to further appeal, that such indemnification
may not be enforced in such case, even though this Agreement expressly provides
for indemnification in such case, or (ii) any Indemnified Party or indemnifying
party seeks contribution under the Securities Act, the Exchange Act or
otherwise, then the Company (including for this purpose any contribution made by
or on behalf of any director of the Company, any officer of the Company who
signed any such Registration Statement, any controlling person of the Company,
and its or their respective counsel) as one entity, and the Holders (including
for this purpose any contribution by or on behalf of an Indemnified Party) as
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a second entity, shall contribute to the losses, liabilities, claims, damages
and expenses whatsoever to which any of them may be subject, on the basis of
relevant equitable considerations such as the relative fault of the Holders and
the Company in connection with the facts which resulted in such losses,
liabilities, claims, damages and expenses. The relative fault, in the case of an
untrue statement, alleged untrue statement, omission or alleged omission shall
be determined by, among other things, whether such statement, alleged statement,
omission or alleged omission relates to information supplied by a Holder or the
Company, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement, alleged statement, omission or
alleged omission. Each Holder and the Company agree that it would be unjust and
inequitable if the respective obligations of the Holders and the Company for
contribution were determined by pro rata or per capita allocation of the
aggregate losses, liabilities, claims, damages and expenses (even if the Holders
and the other Indemnified Parties were treated as one entity for such purpose)
or by any other method of allocation that does not reflect the equitable
considerations referred to in this Section 2.3(d). No person guilty of a
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation. For purposes of this Section
2.3(d), each person, if any, who controls a Holder within the meaning of Section
15 of the Securities Act or Section 20(a) of the Exchange Act and each officer,
director, partner, employee, agent and counsel of a Holder or control person
shall have the same rights to contribution as the Company or control person and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20(a) of the Exchange Act, each officer of the
Company who shall have signed any such Registration Statement, each director of
the Company, and its or their respective counsel shall have the same rights to
contribution as the Company, subject in each case to the provisions of this
Section 2.3(d). Anything in this Section 2.3(d) to the contrary notwithstanding,
no party shall be liable for contribution with respect to the settlement of any
claim or action effected without its written consent. This Section 2.3(d) is
intended to supersede any right to contribution under the Securities Act, the
Exchange Act or otherwise.
(e) Notwithstanding the foregoing provisions of this
Section 2.3, in the event the Stipulation shall be the subject of appeal by
members of the Class (as defined in the Stipulation) or other persons, the
Company may in its sole discretion, cease its efforts to file, or to cause the
declaration of effectiveness of, the Registration Statement and/or cause the
withdrawal of such Registration Statement. Upon resolution of such appeal, the
Company shall forthwith use its reasonable best efforts to file or cause the
declaration of effectiveness of the Registration Statement.
Section 2.4 Procedure for Exercise of Warrants. (a) During the
period specified in and subject to the provisions and limitations set forth in
Section 2.2 hereof, Warrants may be exercised by surrendering the Warrant
Certificates representing such Warrants to the Warrant Agent at 000 Xxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000 attention: Trust Department (the
"Principal Office") or at such other location as the Warrant Agent may specify
in writing to the Holders with the election to purchase form set forth on the
reverse side of the Warrant Certificate duly completed and executed, with
Signatures Guaranteed under certain circumstances as set forth in the purchase
form, accompanied by payment in full to the Warrant Agent for the account of the
Company of the Exercise Price in effect at the time of such exercise, together
with such taxes as are specified in Section 6.1 hereof, for each share of Common
Stock with respect to which such Warrants are being exercised. Such Exercise
Price and taxes shall be
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paid in full by certified or official bank check, or by United States Postal
Service money order, payable in United States currency to the order of the
Warrant Agent for the account of the Company.
(b) In lieu of any cash payment to be made by a Holder of the
Exercise Price pursuant to the preceding paragraph, during the period specified
in and subject to the provisions and limitations set forth in Section 2.2
hereof, the Holder may, at its option, exchange his Warrant, in whole or in part
(a "Warrant Exchange"), into the number of Warrant Shares determined in
accordance with this paragraph, by surrendering the Warrant to the Warrant Agent
accompanied by a notice stating such Holder's intent to effect such exchange,
the number of Warrant Shares to be exchanged and the date on which the Holder
requests that such Warrant Exchange occur (the "Notice of Exchange"). The
Warrant Exchange shall take place on the date specified in the Notice of
Exchange or, if later, the date the Notice of Exchange is received by the
Company (the "Exchange Date"). Certificates for the Common Stock issuable upon
such Warrant Exchange and, if applicable, a new warrant of like tenor evidencing
the balance of the Warrant Shares remaining subject to such Warrant, shall be
issued as of the Exchange Date and delivered to the Holder within seven (7) days
following the Exchange Date. In connection with any Warrant Exchange, a Warrant
shall represent the right to subscribe for and acquire the number of Warrant
Shares (rounded to the next highest integer) equal to (i) the number of Warrant
Shares specified by the Holder in its Notice of Exchange (the "Total Number")
less (ii) the number of Warrant Shares equal to the quotient obtained by
dividing (A) the product of the Total Number times the existing Exercise Price
by (B) the then Market Price of a share of Common Stock. As used in this
Agreement, the term "Market Price" shall mean the average closing price of the
Company's Common Stock on the Nasdaq National Market System or the Nasdaq
SmallCap Market, or, if the Company's Common Stock is not so listed on the
Nasdaq National Market or the Nasdaq SmallCap Market, then on the domestic
over-the-counter market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization, during the twenty (20)
consecutive business days (as such term is used on the Nasdaq National Market
System or a domestic over-the-counter market, as the case may be) ending three
days prior to the date of the "Notice of Exchange" or if later the "Exchange
Date" (as such terms are defined in Section 2.4 hereof). Upon request of the
Warrant Agent, the Company shall provide to the Warrant Agent a written
presentation of the Market Price for the period requested by the Warrant Agent.
(c) The date on which a Warrant is exercised in accordance
with this Section 2.4 is sometimes referred to herein as the "Date of Exercise"
of such Warrant. In the event that a Blackout Period, as described in Section
2.2 hereof is in effect, the Warrant Agent will notify the Holder, in accordance
with Section 6.15 hereof, that a Blackout Period is in effect and that the
Warrants surrendered may not be exercised during the Blackout Period. In this
event, the date that the Company notifies the Warrant Agent that the Blackout
Period has ended will be the Date of Exercise unless the Holder notifies the
Warrant Agent, in writing, prior to the end of the Blackout Period that he
withdraws his surrender of the Warrant Certificates.
Section 2.5 Issuance of Warrant Shares. As soon as practicable
after the Date of Exercise of any Warrant, the Warrant Agent shall deposit the
proceeds received, if any, from the exercise of the Warrants, and promptly,
after clearance of checks received in payment of the Exercise Price pursuant to
such Warrants, shall issue a certificate or certificates for the number of full
Warrant Shares to which the Holder thereof is entitled, registered in accordance
with the
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instructions set forth in the election to purchase. The Company covenants that
the Warrant Shares which shall be issuable upon exercise of the Warrants and
payment, if any, of the Exercise Price in compliance with this Agreement and the
Warrant Certificate shall, pursuant to and in accordance with the terms of this
Agreement, be validly authorized and issued, fully paid and nonassessable, and
free from all taxes, liens and charges created by the Company in respect of the
issue thereof. Certificates representing such Warrant Shares shall be delivered
by the Warrant Agent in such names and denominations as are required for
delivery to, or in accordance with the instructions of, the Holder. Each person
in whose name any such certificate for Warrant Shares issued shall for all
purposes be deemed to have become the holder of record of the Warrant Shares
represented thereby on the Date of Exercise of the Warrants resulting in the
issuance of such Warrant Shares, irrespective of the date of issuance or
delivery of such certificate for Warrant Shares; provided, however, that if, at
the date of the surrender of such Warrants and payment of the Exercise Price,
the transfer books for the Warrant Shares purchasable upon the exercise of such
Warrants shall be closed, the certificates for the Warrant Shares in respect of
which such Warrants are then exercised shall be issuable as of the date on which
such books shall next be opened (whether before or after the Exercise Deadline)
and until such date the Warrant Agent shall be under no duty to deliver any
certificate for such Warrant Shares; provided, further, that the transfer books
of record, unless otherwise required by law, shall not be closed at any one time
for a period longer than twenty (20) days.
Section 2.6 Certificates for Unexercised Warrants. Subject to Section 2.4(b)
hereof, if less than all of the Warrants represented by a Warrant Certificate
are exercised, the Warrant Agent shall execute and mail, by first-class mail,
within thirty (30) days of the Date of Exercise, to the Holder of such Warrant
Certificate, or such other person as shall be designated in the election to
purchase, a new Warrant Certificate representing the number of Warrants not
exercised. In no event shall a fraction of a Warrant be exercised, and the
Warrant Agent shall distribute no Warrant Certificates representing fractions of
Warrants under this or any other Section of this Agreement.
Section 2.7 Reservation of Shares. The Company shall at all
times reserve and keep available for issuance upon the exercise of Warrants a
number of its authorized but unissued shares or treasury shares, or both, of
Common Stock that will be sufficient to permit the exercise in full of all
outstanding Warrants. The transfer agent for the Common Stock and every
subsequent transfer agent for the Company's capital stock issuable upon the
exercise of Warrants, will be irrevocably authorized and directed at all times
to reserve a number of authorized shares as shall be required for such purpose.
The Company will keep a copy of this Agreement on file with the transfer agent
for the Common Stock and with every subsequent transfer agent for any shares of
the Company's capital stock issuable upon the exercise of the Warrants. The
Warrant Agent is hereby irrevocably authorized to requisition from time to time
from such transfer agent the stock certificates required to honor outstanding
Warrants upon exercise thereof in accordance with the terms of this Agreement.
The Company shall supply such transfer agent with duly executed stock
certificates for such purposes and will provide or otherwise make available any
cash which may be payable as provided in Section 3.9 hereof. All Warrant
Certificates surrendered in the exercise of the rights thereby evidenced shall
be canceled by the Warrant Agent and retained by the Warrant Agent pursuant to
Section 5.2 hereof.
Section 2.8 Disposition of Proceeds. Upon the exercise of any
Warrant, the Warrant Agent shall promptly deposit all funds received by it for
the purchase of Warrant Shares
9
into a non-interest-bearing escrow account as directed in writing by the
Company. All funds deposited in the escrow account shall be disbursed on a
weekly basis to the Company, or as otherwise requested by the Company in
writing. A detailed accounting statement relating to the number of Warrants
exercised, names of Holders of such exercised Warrants and the net amount of
funds remitted will be given to the Company with each such disbursement.
Article III
ADJUSTMENTS AND NOTICE PROVISIONS
Section 3.1 Adjustment of Exercise Price. Subject to the
provisions of this Article III, the Exercise Price in effect from time to time
shall be subject to adjustment, as follows:
(a) In case the Company shall declare a dividend payable in
stock or make some other distribution on the outstanding shares of its Common
Stock in shares of its Common Stock, (ii) subdivide or reclassify the
outstanding shares of its Common Stock into a greater number of shares or (iii)
combine or reclassify the outstanding shares of its Common Stock into a smaller
number of shares, the Exercise Price, in effect immediately after the record
date for such dividend or distribution or the effective date of such division,
reclassification or combination shall be proportionately adjusted by multiplying
the then Exercise Price by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such event and
the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such event, and the product so obtained shall
thereafter be the Exercise Price then in effect. Such adjustment shall be made
successively whenever any event specified above shall occur.
(b) All calculations under this Section 3.1 shall be made to
the nearest thousandth of a cent.
Section 3.2 No Adjustments to Exercise Price. No adjustment
in the Exercise Price in accordance with the provisions of paragraph (a) of
Section 3.1 hereof need be made if such adjustment would amount to a change in
such Exercise Price of less than ten cents; provided, however, that the amount
by which any adjustment is not made by reason of the provision of this Section
3.2 shall be carried forward and taken into account at the time of any
subsequent adjustment in the Exercise Price.
Section 3.3 Adjustment to Number of Shares. Upon each
adjustment of the Exercise Price pursuant to Paragraph (a) of Section 3.1, each
Warrant shall thereupon evidence the right to purchase that number of shares of
Common Stock (calculated to the nearest hundredth of a share) obtained by
multiplying the number of shares of Common Stock purchasable immediately prior
to such adjustment upon exercise of the Warrant by the Exercise Price in effect
immediately prior to such adjustment and dividing the product so obtained by the
Exercise Price in effect immediately after such adjustment.
Section 3.4 Reorganizations. In case of any capital
reorganization, consolidation or merger of the Company (other than in the cases
referred to in Section 3.1 hereof, and other than the consolidation or merger of
the Company with or into another corporation in which the
10
Company is the continuing corporation and which does not result in any
reclassification of the outstanding shares of Common Stock or the conversion of
such outstanding shares of Common Stock into shares of other stock or other
securities or property) or the sale of all or substantially all of the Company's
stock or property (any of the foregoing events hereinafter referred to as a
"Reorganization"), all outstanding Warrants which have not been exercised prior
to the closing of any such transaction shall be deemed to have been exercised
and converted concurrently with the closing and the holders shall be entitled to
receive the kind and amount of consideration receivable by holders of Common
Stock less the Exercise Price of the Warrants deemed exercised. Additionally, in
the event of sale or conveyance or other transfer of all or substantially all of
the assets of the Company as a part of a plan for liquidation of the Company,
all rights to exercise any Warrant shall terminate thirty (30) days after the
Company gives written notice to each Holder that such sale or conveyance or
other transfer has been consummated in the manner specified in Section 6.15
hereof.
Section 3.5 Exercise Price Not Less Than Par Value. In no
event shall the Exercise Price be adjusted below the par value per share of the
Common Stock.
Section 3.6 Notice of Certain Action. In the event the Company
shall:
(a) declare any dividend payable in stock to the holders of
its Common Stock or make any other distribution in property other than cash to
the holders of its Common Stock; or
(b) offer to the holders of its Common Stock as such rights to
subscribe for or purchase any shares of any class of stock or any other rights
or opinions; or
(c) effect any reclassification of its Common Stock (other
than a reclassification involving merely the subdivision or combination of
outstanding shares of Common Stock), Reorganization or the liquidation,
dissolution or winding up of the Company;
then, in each such case, the Company shall cause notice of such proposed action
to be mailed to the Warrant Agent. Such notice shall specify the date on which
the books of the Company shall close, or a record be taken, for determining
holders of Common Stock entitled to receive such stock dividend or other
distribution or such rights or options, or the date on which such
reclassification, Reorganization, liquidation, dissolution or winding up shall
take place or commence, as the case may be, and the date as of which it is
expected that holders shall be entitled to receive securities or other property
deliverable upon such action, if any such date has been fixed. The Company shall
also cause copies of such notice to be mailed to each Holder of a Warrant
Certificate in the manner specified in Section 6.15 hereof. Such notice shall be
mailed, in the case of any action covered by Subsection 3.6(a) or 3.6(b) above,
at least ten (10) days prior to the record date for determining holders of the
Common Stock for purposes of receiving such payment or offer, and in the case of
any action covered by Subsection 3.6(c) above, at least ten (10) days prior to
the earlier of the date upon which such action is to take place or any record
date to determine holders of Common Stock entitled to receive such securities or
other property.
Section 3.7 Notice of Adjustments. Whenever any adjustment is
made pursuant to this Article III, the Company shall cause notice of such
adjustment to be mailed to the Warrant Agent within fifteen (15) days
thereafter, such notice to include in reasonable detail (i) the events
precipitating the adjustment, (ii) the computation of any adjustments and (iii)
the Exercise Price,
11
the number of shares or the securities or other property purchasable upon
exercise of each Warrant after giving effect to such adjustment. The Warrant
Agent shall be entitled to rely on such notice and any adjustment therein
contained and shall not be deemed to have knowledge of any such adjustment
unless and until it shall have received such notice. The Warrant Agent shall
within fifteen (15) days after receipt of such notice from the Company cause a
similar notice to be mailed to each Holder.
Section 3.8 Warrant Certificate Amendments. Irrespective of
any adjustments pursuant to this Article III, Warrant Certificates theretofore
or thereafter issued need not be amended or replaced, but certificates
thereafter issued shall bear an appropriate legend or other notice of any
adjustments.
Section 3.9 Fractional Shares. The Company shall not be
required upon the exercise of any Warrant to issue fractional shares of Common
Stock which may result from adjustments in accordance with this Article III to
the Exercise Price or number of shares of Common Stock purchasable under each
Warrant. If more than one Warrant is exercised at one time by the same Holder,
the number of full shares of Common Stock which shall be deliverable shall be
computed based on the number of shares deliverable in exchange for the aggregate
number of Warrants exercised. With respect to any final fraction of a share
called for upon the exercise of any Warrant or Warrants, the Company, at its
option, shall either (i) issue a full share of Common Stock to the Holder in
respect of such fraction or (ii) pay a cash adjustment in respect of such final
fraction in an amount equal to the same fraction of the market value of a share
of Common Stock, as determined by the Warrant Agent on the basis of the market
price per share of Common Stock on the business day next preceding the date of
such exercise. For the purposes of this Section 3.9, the market price per share
of Common Stock for such day shall mean (i) the average of the high and low bid
and ask prices of the Common Stock on the Nasdaq National Market System for such
day; or (ii) if the Common Stock is not then traded on such exchange, then the
last known price paid per share by a purchaser of such stock in an arm's-length
transaction.
Article IV
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
Section 4.1 Rights of Warrant Holders. No Warrant Certificate
shall entitle the registered holder thereof, as such, to any of the rights of a
stockholder of the Company, including, without limitation, the right to vote, to
receive dividends and other distributions, to receive any notice of, or to
attend, meetings of stockholders or any other proceedings of the Company.
Section 4.2 Lost, Stolen, Mutilated or Destroyed Warrant
Certificates. If any Warrant Certificate shall be mutilated, apparently lost,
stolen or destroyed, the Company in its discretion may direct the Warrant Agent
to execute and deliver, in exchange and substitution for and upon cancellation
of a mutilated Warrant Certificate, or in lieu of or in substitution for an
apparently lost, stolen or destroyed Warrant Certificate, a new Warrant
Certificate for the number of Warrants represented by the Warrant Certificate so
mutilated, apparently lost, stolen or destroyed but only upon receipt of
evidence of such loss, theft or destruction of such Warrant
12
Certificate, and of the ownership thereof, and indemnity, if requested, all
satisfactory to the Company and the Warrant Agent. Applicants for such
substitute Warrant Certificates shall also comply with such other reasonable
regulations and pay such other reasonable charges incidental thereto as the
Company or Warrant Agent may prescribe. Any such new Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
allegedly mutilated, lost or stolen or destroyed Warrant Certificate shall be at
any time enforceable by anyone.
Article V
SPLIT UP, COMBINATION, EXCHANGE, TRANSFER
AND CANCELLATION OF WARRANT CERTIFICATES
Section 5.1 Split-Up, Combination, Exchange and Transfer of
Warrant Certificates. Prior to the Exercise Deadline, Warrant Certificates,
subject to the provisions of Section 5.2, may be split-up, combined or exchanged
for other Warrant Certificates representing a like aggregate number of Warrants
or may be transferred in whole or in part. Any Holder desiring to split-up,
combine or exchange a Warrant Certificate or Warrant Certificates shall make
such request in writing delivered to the Warrant Agent at its Principal Office
and shall surrender the Warrant Certificate or Warrant Certificates so to be
split-up, combined or exchanged at said office. Subject to any applicable laws,
rules or regulations restricting transferability, any restriction on
transferability that may appear on a Warrant Certificate in accordance with the
terms hereof, or any "stop-transfer" instructions the Company may give to the
Warrant Agent to implement any such restriction (which instructions the Company
is expressly authorized to give), transfer of outstanding Warrant Certificates
may be effected by the Warrant Agent from time to time upon the books of the
Company to be maintained by the Warrant Agent for that purpose, upon a surrender
of the Warrant Certificate to the Warrant Agent at its Principal Office, with
the assignment form set forth in the Warrant Certificate duly executed and with
Signature Guaranteed. Upon any such surrender for split-up, combination,
exchange or transfer, the Warrant Agent shall execute and deliver to the person
entitled thereto a Warrant Certificate or Warrant Certificates, as the case may
be, as so requested. The Warrant Agent shall not be required to effect any
split-up, combination, exchange or transfer which will result in the issuance of
a Warrant Certificate evidencing a fraction of a Warrant. The Warrant Agent may
require the holder to pay a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any split-up, combination,
exchange or transfer of Warrant Certificates prior to the issuance of any new
Warrant Certificate.
Section 5.2 Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered upon the exercise of Warrants or for split-up,
combination, exchange or transfer, or purchased or otherwise acquired by the
Company, shall be canceled and shall not be reissued by the Company; and, except
as provided in Section 2.6 in case of the exercise of less than all of the
Warrants evidenced by a Warrant Certificate or in Section 5.1 in case of a
split-up, combination, exchange or transfer, no Warrant Certificate shall be
issued hereunder in lieu of such canceled Warrant Certificates. Any Warrant
Certificate so canceled shall be held by the Warrant Agent (unless otherwise
directed by the Company) and destroyed not earlier than seven (7) years after
such cancellation. The Warrant Agent shall furnish to the Company written
confirmation of the destruction of the Warrant Certificates so canceled.
13
Article VI
PROVISIONS CONCERNING THE
AGENT AND OTHER MATTERS
Section 6.1 Payment of Taxes and Charges. The Company will
from time to time promptly pay to the Warrant Agent, or make provisions
satisfactory to the Warrant Agent for the payment of, all taxes and charges that
may be imposed by the United States or any state upon the Company or the Warrant
Agent in connection with the issuance or delivery of any Warrant Shares, but any
transfer taxes in connection with the issuance of Warrant Certificates or
certificates for Warrant Shares in any name other than that of the Holder of the
Warrant Certificates surrendered shall be paid by such Holder; and, in such
case, the Company shall not be required to issue or deliver any Warrant
Certificate or certificate for Warrant Shares until such taxes shall have been
paid or it has been established to the Company's satisfaction that no tax is
due.
Section 6.2 Resignation or Removal of Warrant Agent. The
Warrant Agent may resign its duties and be discharged from all further duties
and liabilities hereunder after giving at least thirty (30) days' notice in
writing to the Company, except that such shorter notice may be given as the
Company shall, in writing, accept as sufficient. Upon comparable notice to the
Warrant Agent, the Company may remove the Warrant Agent; provided, however, that
in such event the Company shall appoint a new Warrant Agent, as hereinafter
provided, and the removal of the Warrant Agent shall not be effective until a
new Warrant Agent has been appointed and has accepted such appointment. If the
office of Warrant Agent becomes vacant by resignation or incapacity to act or
otherwise, the Company shall appoint in writing a new Warrant Agent. If the
Company shall fail to make such appointment within a period of thirty (30) days
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Warrant Agent or by the Holder of any Warrant
Certificate, then the Holder of any Warrant Certificate may apply to any court
of competent jurisdiction for the appointment of a new Warrant Agent. Any new
Warrant Agent, whether appointed by the Company or by such a court, shall be a
bank which is a member of the Federal Reserve System. Any new Warrant Agent
appointed hereunder shall execute, acknowledge and deliver to the former Warrant
Agent last in office, and to the Company, an instrument accepting such
appointment under substantially the same terms and conditions as are contained
herein, and thereupon such new Warrant Agent without any further act or deed
shall become vested with the rights, powers, duties and responsibilities of the
Warrant Agent and the former Warrant Agent shall cease to be the Warrant Agent;
but if for any reason it becomes necessary or expedient to have the former
Warrant Agent execute and deliver any further assurance, conveyance, act or
deed, the same shall be done at the expense of the Company and shall be legally
and validly executed and delivered by the former Warrant Agent.
Section 6.3 Notice of Appointment. Not later than the
effective date of the appointment of a new Warrant Agent the Company shall cause
notice thereof to be mailed to the former Warrant Agent and the transfer agent
for the Common Stock, and shall forthwith cause a copy of such notice to be
mailed to each Holder of a Warrant Certificate. Failure to mail such notice, or
any defect contained therein, shall not affect the legality or validity of the
appointment of the successor Warrant Agent.
14
Section 6.4 Merger of Warrant Agent. Any company into which
the Warrant Agent may be merged or with which it may be consolidated or any
company resulting from any merger or consolidation to which the Warrant Agent
shall be a party, or any company to which the Warrant Agent may transfer its
stockholder services business, shall be the successor Warrant Agent under this
Agreement without further act, provided that such company would be eligible for
appointment as a successor Warrant Agent under the provisions of Section 6.2
hereof. Any such successor Warrant Agent may adopt the prior countersignature of
any predecessor Warrant Agent and distribute Warrant Certificates countersigned
but not distributed by such predecessor Warrant Agent, or may countersign the
Warrant Certificates in its own name.
Section 6.5 Company Responsibilities. The Company agrees that
it shall (i) pay the Warrant Agent the agreed upon remuneration for its services
as Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for
all expenses, advances, and expenditures that the Warrant Agent may reasonably
incur in the execution of its duties hereunder (including reasonable fees and
expenses of its counsel); (ii) provide the Warrant Agent, upon request, with
sufficient funds to pay any cash due pursuant to Section 3.9 upon exercise of
Warrants; and (iii) perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all further and other acts,
instruments and assurances as may reasonably be required by the Warrant Agent
for the carrying out or performing by the Warrant Agent of the provisions of
this Agreement.
Section 6.6 Purchase of Warrants by the Company. The Company
shall have the right, except as limited by law, other agreement or herein, to
purchase or otherwise acquire Warrants at such times, in such manner and for
such consideration as it may deem appropriate.
Section 6.7 Certification for the Benefit of Warrant Agent.
Whenever in the performance of its duties under this Agreement the Warrant Agent
shall deem it necessary or desirable that any matter be proved or established or
that any instructions with respect to the performance of its duties hereunder be
given by the Company prior to taking or suffering any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established, or such
instructions may be given, by a certificate or instrument signed by the Chairman
of the Board, the President, an Executive Vice President, the Secretary or the
Treasurer of the Company and delivered to the Warrant Agent. Such certificate or
instrument may be relied upon by the Warrant Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement; but in its
discretion the Warrant Agent may in lieu thereof accept other evidence of such
matter or may require such further or additional evidence as it may deem
reasonable.
Section 6.8 Liability of Warrant Agent. The Warrant Agent
shall be liable hereunder solely for its own negligence or willful misconduct.
The Warrant Agent shall act hereunder solely as an agent in a ministerial
capacity for the Company and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Warrant Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only. The Warrant Agent will not incur any
liability or responsibility to the Company or to any Holder of any Warrant
Certificate for any action taken, or any failure to take action, in reliance on
any paper, document or instrument reasonably believed by the Warrant Agent to be
genuine and to
15
have been signed, sent or presented by the proper party or parties. The Warrant
Agent shall not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof by the Company or in respect of
the validity or execution of any Warrant Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Warrant Certificate or the Stipulation; nor shall it be responsible for the
making of any adjustment required under the provisions of Article III hereof or
responsible for the manner, method or amount of any such adjustment or the facts
that would require any such adjustment; nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock or other securities to be issued
pursuant to this Agreement or any Warrant Certificate or as to whether any
shares of Common Stock or other securities will when issued be validly
authorized and issued and fully paid and nonassessable.
Section 6.9 Use of Attorneys, Agents and Employees. The
Warrant Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself or by or through its
attorneys, agents or employees.
Section 6.10 Indemnification. The Company agrees to indemnify
the Warrant Agent and save it harmless against any and all losses, expenses or
liabilities, including judgments, costs and reasonable counsel fees arising out
of or in connection with its acceptance of its position hereunder and in
carrying out the terms hereof, except as a result of the negligence or willful
misconduct of the Warrant Agent.
Section 6.11 Acceptance of Agency. The Warrant Agent hereby
accepts the agency established by this Agreement and agrees to perform the same
upon the terms and conditions herein set forth.
Section 6.12 Instructions from the Company. The Warrant Agent
is hereby authorized and directed to accept instructions with respect to the
performance of its duties hereunder from the Chairman of the Board, the
President, an Executive Vice President, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and shall not be liable for any action taken or suffered to be
taken by it in good faith in accordance with instructions of any such officer or
officers.
Section 6.13 Changes to Agreement. The Warrant Agent may,
without the consent or concurrence of any Holder, by supplemental agreement or
otherwise, join with the Company in making any changes or corrections in this
Agreement that shall in the judgment of the Company (i) be required to cure any
ambiguity or to correct any defective or inconsistent provision or clerical
omission or mistake or manifest error herein contained, (ii) add to the
covenants and agreements of the Company or the Warrant Agent in this Agreement
such further covenants and agreements thereafter to be observed, or (iii) result
in the surrender of any right or power reserved to or conferred upon the Company
or the Warrant Agent in this Agreement, but which changes or corrections do not
or will not adversely affect, alter or change the rights, privileges or
immunities of the Holders of Warrant Certificates. The Warrant Agent shall be
entitled to rely on such Company counsel's written advice. Otherwise the
Agreement may be amended by the written consent of the Company and the
affirmative vote or written consent of Holders holding not less than two-thirds
of the then outstanding Warrants.
16
Section 6.14 Assignment. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Warrant Agent shall
bind and inure to the benefit of their respective successors and assigns.
Section 6.15 Notices. Any notice or demand required by this
Agreement to be given or made by the Warrant Agent or by the Holder to or on the
Company shall be sufficiently given or made if sent by first-class or registered
mail, postage prepaid, addressed (until another address is filed in writing by
the Company with the Warrant Agent) as follows:
Acclaim Entertainment, Inc.
Xxx Xxxxxxx Xxxxx
Xxxx Xxxx, Xxx Xxxx 00000
Attention: Secretary
Any notice or demand required by this Agreement, to be given or made by the
registered Holder of any Warrant Certificate or by the Company to or on the
Warrant Agent shall be sufficiently given or made if sent by first-class or
registered mail, postage prepaid, addressed (until another address is filed in
writing with the Company by the Warrant Agent), as follows:
American Securities Transfer & Trust, Inc.
000 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Trust Department (Acclaim Entertainment, Inc.)
Any notice or demand required by this Agreement to be given or made by the
Company or the Warrant Agent to or on the Holder of any Warrant Certificate
shall be sufficiently given or made, whether or not such Holder receives the
notice, if sent by first-class or registered mail, postage prepaid, addressed to
such Holder at his last address as shown on the books of the Company maintained
by the Warrant Agent.
Section 6.16 Defects in Notice. Failure to file any
certificate or notice or to mail any notice, or any defect in any certificate or
notice pursuant to this Agreement shall not affect in any way the rights of any
Holder or the legality or validity of any adjustment made pursuant to Section
3.1 hereof, or any transaction giving rise to any such adjustment, or the
legality or validity of any action taken or to be taken by the Company.
Section 6.17 Governing Law. The validity, interpretation and
performance of this Agreement, of each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by the internal
laws of the State of Delaware, without reference to principles of conflict of
laws.
Section 6.18 Standing. Nothing in this Agreement expressed and
nothing that may be implied from any of the provisions hereof is intended, or
shall be construed, to confer upon, or give to, any person or corporation other
than the Company, the Warrant Agent, and the Holders any right, remedy or claim
under or by reason of this Agreement or of any covenant, condition, stipulation,
promise or agreement contained herein; and all covenants, conditions,
17
stipulations, promises and agreements contained in this Agreement shall be for
the sole and exclusive benefit of the Company and the Warrant Agent and their
successors, and the Holders.
Section 6.18 Headings. The descriptive headings of the
articles and sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
Section 6.19 Counterparts. This Agreement may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original; but such counterparts shall together constitute but one and the same
instrument.
Section 6.20 Conflicts of Interest. The Warrant Agent and any
stockholder, director, officer or employee of the Warrant Agent may buy, sell or
deal in any of the Warrant Certificates or other securities of the Company or
become pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though the Warrant Agent were not Warrant Agent under this
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.
Section 6.21 Availability of the Agreement. The Warrant Agent
shall keep copies of this Agreement available for inspection by holders of
Warrants during normal business hours at its stock transfer department. Copies
of this Agreement may be obtained upon written request addressed to the Company
at the address set forth in Section 6.15.
18
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, and their corporate seals affixed and attested,
all as of the day and year first above written.
ACCLAIM ENTERTAINMENT, INC.
By: _____________________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: Co-Chairman, Chief Executive Officer
and President
[Corporate Seal]
Attest:
__________________________________________
Name: Xxxxx X. Xxxxxxxxxx
Title: Co-Chairman, Senior Executive
Vice President; Acting Chief
Financial Officer; Secretary and
Treasurer
19
AMERICAN SECURITIES TRANSFER & TRUST, INC.
By: ______________________________________
Name:
Title:
[Corporate Seal]
Attest:
__________________________
Name:
Title:
20
