EXHIBIT 4.2
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ACCLAIM ENTERTAINMENT, INC.
and
American Securities Transfer & Trust, Inc.
Warrant Agent
WARRANT AGREEMENT
Dated as of March 22, 1999
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WARRANT AGREEMENT
WARRANT AGREEMENT dated as of March 22, 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 $0.02 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 Federal District Court in the Eastern District of
New York in accordance with a Stipulation and Agreement of Compromise and
Settlement dated April 15, 1998 (the "Stipulation") between the Company and
the participants in such settlement, following the Effective Date (as defined
in the Stipulation) and following effectiveness of the registration statement
referred 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 to so 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 Warrant
Shares is to be 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 and the certificates representing the Warrants
and the respective rights and obligations thereunder of the Company, the
registered holders of the Warrants and the Warrants 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 Warrants
Certificates shall be dated the date of issuance thereof (whether upon initial
issuance, transfer, exchange or in lieu of mutilated, lost, stolen or
destroyed Warrants 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
Second Valuation Date (as defined in the Stipulation), 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. These
Warrant Certificates, shall initially be registered in the names of those
persons who are finally entitled as Authorized Claimants (as defined in the
Stipulation) to receive Warrant Certificates (the "Authorized Warrant
Holders"). Each such Warrant Certificate shall have imprinted on its face the
date of March 22, 1999 (the "Commencement Date"). On or prior to the 10th
business day following the Second Valuation 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.
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
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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 for any exercise of Warrants, which charge will be borne by the Company.
The Warrant Agent may also impose a reasonable service charge for any exchange
or registration of transfer of Warrant Certificates, which charge will be
borne by the Holders. 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 [______________ Dollars] ([$___________])
per share (the "Exercise Price"), calculated pursuant to the terms of Section
II.D. 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 and Registration of Warrant
Shares.
(a) Each Warrant may be exercised at any time after (i) the Commencement
Date provided that at such time the Warrant Shares have been effectively
registered under the Securities Act of 1933, as amended (the "Securities Act")
pursuant to a Registration Statement (as hereinafter defined) filed with and
declared effective by the SEC, as provided in Section 2.3 hereof, and 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, 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
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Securities Act or otherwise, the effectiveness 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 (i) 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) forty-five (45) day Blackout Periods in any
calendar year, nor may it call a Blackout Period forty-five (45) 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.
Section 2.3 Registration of Warrant Shares.
(a) The Company has, as contemplated by Section IV.A. of the Stipulation,
at the Company's sole cost and expense (other than the fees and disbursements
of counsel for the Holders and the underwriting discounts, if any) prepared
and filed with the SEC a registration statement on Form S-3 (the "Registration
Statement"), to be declared effective by the SEC on March 22, 1999,
registering the Warrant Shares and will use its best efforts through its
officers, directors, auditors and counsel to cause such Registration Statement
to remain effective until the earlier of the date referenced in the last
sentence of Section 2.2(a) hereof.
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(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' Settlement Counsel (as that term is
defined in the Stipulation) 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 (i) 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, it
being acknowledged by the Company that the only such written information
furnished consists of the names and/or descriptions of the Holders set forth
under the heading "Selling Securityholders" in the Registration Statement and
the information set forth under the heading "Plan of Distribution" in the
Registration Statement (the "Holder Information"), 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 or counsel, 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 shall have reasonably concluded that
there may be one or more legal defenses
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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' Settlement 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, it being acknowledged by the Company that the only such
furnished information consists of the Holder Information. 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 (i) 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 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
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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 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 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 938 Quail Street, Suite 101, Lakewood, Colorado 80215,
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 Signature Guaranteed under certain circumstances as
set forth in the purchase
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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 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 the last quoted price, or if not so quoted, the average of the high bid
and low asked price in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor
organization, for each of the days on which the Common Stock is actually
traded, 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.
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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 or receipt of good same day funds by Federal funds wire
transfer, 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 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 ten (10) 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 Company's 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 Company's 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
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will 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 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 (i) 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 five (5) 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
10
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 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 or concurrently with the closing of any such transaction will
terminate immediately upon the closing. 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 twenty (20) 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
11
twenty (20) 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 ten (10) 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, 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 ten (10) 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
12
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 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.
13
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.
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
14
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
Company's 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.
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
15
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 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.
16
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.
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.
One Acclaim Plaza
Glen Cove, New York 11542
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.
938 Quail Street
Suite 101
Lakewood, Colorado 80215
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
17
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, 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 6.19 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 6.20 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 6.21 Conflict 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 6.22 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:
-------------------------------
Title:
-------------------------------
[Corporate Seal]
Attest:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
AMERICAN SECURITIES TRANSFER & TRUST, INC.
By:
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Name:
-------------------------------
Title:
-------------------------------
[Corporate Seal]
Attest:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------