WARRANT AGREEMENT
BETWEEN
ATLANTIC COAST ENTERTAINMENT HOLDINGS, INC.
AND
AMERICAN STOCK TRANSFER AND TRUST COMPANY
DATED AS OF JULY 22, 2004
TABLE OF CONTENTS
PAGE
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ARTICLE I DISTRIBUTION OF WARRANT CERTIFICATES........................................................... 1
Section 1.1 Appointment of Warrant Agent.................................................. 1
Section 1.2 Form of Warrant Certificates.................................................. 1
Section 1.3 Execution of Warrant Certificates............................................. 1
Section 1.4 Issuance and Distribution of Warrant Certificates............................. 2
Section 1.5 Conditions to Distribution of Warrant Certificates............................ 2
ARTICLE II WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS................................................ 2
Section 2.1 Exercise Price................................................................ 2
Section 2.2 Registration of Common Stock and Exercisability of Warrants................... 2
Section 2.3 Procedure for Exercise of Warrants............................................ 3
Section 2.4 Issuance of Common Stock...................................................... 3
Section 2.5 Certificates for Unexercised Warrants......................................... 3
Section 2.6 Reservation of Shares......................................................... 3
Section 2.7 Disposition of Proceeds....................................................... 3
Section 2.8 Cancellation of Warrants...................................................... 3
ARTICLE III ADDITIONAL SECURITIES AND NOTICE PROVISIONS.................................................... 4
Section 3.1 Additional Securities......................................................... 4
Section 3.2 Deferral of Adjustments to Warrant Shares..................................... 4
Section 3.3 Adjustment to Number of Warrant Shares........................................ 4
Section 3.4 Reorganizations............................................................... 4
Section 3.5 Verification of Computations.................................................. 5
Section 3.6 Exercise Price Not Less Than Par Value........................................ 5
Section 3.7 Notice of Certain Actions..................................................... 5
Section 3.8 Notice of Certain Actions..................................................... 5
Section 3.9 Warrant Certificate Amendments................................................ 5
Section 3.10 Fractional Shares............................................................. 5
Section 3.11 Current Market Price.......................................................... 6
Section 3.12 Right to Adjust Exercise Price and Exercise Deadline.......................... 6
ARTICLE IV OTHER PROVISIONS RELATING TO RIGHTS OF REGISTERED HOLDERS OF WARRANT CERTIFICATES............... 6
Section 4.1 Rights of Warrant Holders...................................................... 6
Section 4.2 Lost, Stolen, Mutilated, or Destroyed Warrant Certificates..................... 6
ARTICLE V SPLIT UP, COMBINATION, EXCHANGE, TRANSFER, AND CANCELLATION OF WARRANT CERTIFICATES............ 6
Section 5.1 Split Up, Combination, Exchange, and Transfer of Warrant Certificates......... 6
Section 5.2 Cancellation upon Surrender of Warrant Certificates........................... 7
Section 5.3 Agreement of Warrant Certificate Holders...................................... 7
ARTICLE VI PROVISIONS CONCERNING THE WARRANT AGENT AND OTHER MATTERS...................................... 7
Section 6.1 Payment of Taxes and Charges.................................................. 7
Section 6.2 Resignation or Removal of Warrant Agent....................................... 7
Section 6.3 Notice of Appointment......................................................... 8
Section 6.4 Merger of Warrant Agent....................................................... 8
Section 6.5 Company Responsibilities...................................................... 8
Section 6.6 Certification for the Benefit of Warrant Agent................................ 8
Section 6.7 Books and Records............................................................. 8
Section 6.8 Liability of Warrant Agent.................................................... 8
Section 6.9 Use of Attorneys, Agents, and Employees....................................... 9
Section 6.10 Indemnification............................................................... 9
Section 6.11 Acceptance of Agency.......................................................... 9
Section 6.12 Changes to Agreement.......................................................... 9
Section 6.13 Assignment.................................................................... 9
Section 6.14 Successor to Company.......................................................... 9
Section 6.15 Notices....................................................................... 9
Section 6.16 Defects in Notice............................................................. 10
Section 6.17 Governing Law................................................................. 10
Section 6.18 Standing...................................................................... 10
Section 6.19 Headings...................................................................... 10
Section 6.20 Counterparts.................................................................. 10
Section 6.21 Conflict of Interest.......................................................... 10
Section 6.22 Availability of the Agreement................................................. 11
EXHIBIT A FORM OF WARRANT CERTIFICATE
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WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of July 22, 2004, between ATLANTIC COAST
ENTERTAINMENT HOLDINGS, INC., a Delaware corporation (the "Company") and
American Stock Transfer and Trust Company, as warrant agent (the "Warrant
Agent").
WITNESSETH:
WHEREAS, the Company is a wholly owned subsidiary of GB Holdings, Inc., a
Delaware corporation (the "Parent");
WHEREAS, the Company proposes to enter into the transaction (the
"Transaction") described in that certain Proxy Statement and Registration
Statement on Form S-4 (the "Form S-4") pursuant to which the Company shall
distribute to the stockholders of Parent (the "Distribution") 10 million
warrants (the "Warrants") to purchase common stock, par value $.01 per share the
("Common Stock") of the Company, each Warrant entitling the holder thereof to
purchase .275 shares of Common Stock;
WHEREAS, the Company proposes to issue certificates evidencing the
Warrants (such Warrant certificates issued pursuant to this Agreement being
hereinafter called the "Warrant Certificates");
WHEREAS, the Company desires the Warrant Agent, and the Warrant Agent
agrees, to act on behalf of the Company in connection with the issuance,
transfer, exchange, replacement, redemption, and surrender of the Warrant
Certificates; and
WHEREAS, the Company and the Warrant Agent desire to set forth in this
Warrant Agreement, among other things, the form and provisions of the Warrant
Certificates and the terms and conditions under which they may be issued,
transferred, exchanged, replaced, redeemed, and surrendered in connection with
the exercise and redemption of the Warrants;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto 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 purchase and assignment
forms to be printed on the reverse thereof, shall be substantially in the form
of Exhibit A attached hereto. The Warrant Certificates 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 regulatory
authority or agency, or to conform to customary usage.
Section 1.3 Execution of Warrant Certificates. The Warrant Certificates
shall be executed on behalf of the Company by its Chairman, Vice Chairman,
President, or any Vice President and by its Chief Financial Officer, Treasurer,
Assistant Treasurer, Secretary, or Assistant Secretary, either manually or by
facsimile signature printed thereon. The Warrant Certificates shall be manually
countersigned and dated the date of countersignature by the Warrant Agent and
shall not be valid for any purpose unless so countersigned and dated. If 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 Issuance and Distribution of Warrant Certificates. Upon
completion of the Distribution, 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. Upon receipt of an order from the Company, the
Warrant Agent shall within three business days complete and countersign Warrant
Certificates representing the total number of Warrants to be issued hereunder
and shall deliver such Warrant Certificates pursuant to written instructions of
the Company.
Section 1.5 Conditions to Distribution of Warrant Certificates. If the
Distribution or the Transaction is not consummated for any reason, no Warrant
Certificates shall be distributed and this Agreement shall terminate and be of
no further force or effect.
ARTICLE II
WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS
Section 2.1 Exercise Price. Each Warrant Certificate shall, when signed
by the Chairman, Vice Chairman, President, or any Vice President and by the
Chief Financial Officer, Treasurer, Assistant Treasurer, Secretary, or Assistant
Secretary of the Company and countersigned by the Warrant Agent, entitle the
registered holder thereof to purchase from the Company .275 shares (each a
"Warrant Share") of Common Stock for each Warrant evidenced thereby, at the
purchase price of $.01 per share, or such adjusted number of shares at such
adjusted purchase price as may be established from time to time pursuant to the
provisions of Article III hereof, payable in full at the time of exercise of the
Warrant. Except as the context otherwise requires, the term "Exercise Price" as
used in this Agreement shall mean the purchase price of $.01 per share of Common
Stock upon exercise of a Warrant, reflecting all appropriate adjustments made in
accordance with the provisions of Article III hereof.
Section 2.2 Registration of Common Stock and Exercisability of Warrants.
Each Warrant may be exercised at any time after the earliest to occur of the
following events (the first date on which any such event occurs being referred
to as the "Vesting Date"):
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(a) the payment of the entire principal amount and accrued interest on
any of the Company's outstanding 3% Notes due 2008 issued by the
Company (the "New Notes"), pursuant to and in accordance with the
terms thereof whether such payment is in the form of cash or by
issuance of shares of Common Stock to the holder thereof in lieu of
cash payment or any conversion of any of such notes into common
stock pursuant to and in accordance with the terms thereof;
(b) a determination by a majority of the board of directors of the
Company (the "Board") (including at least one independent director)
that the Warrants may be exercised; and
(c) payment in full by the Parent of principal and accrued, but unpaid
interest on all outstanding 11% Notes due 2005 issued by the Parent
which have not been exchanged for the New Notes in the Transaction.
Promptly after the Vesting Date, the Company shall send written notice to
the Warrant Agent that such Vesting Date has occurred (the "Vesting Notice").
The Warrant Agent shall within ten days after receipt of the Vesting Notice
cause a similar notice to be mailed to each registered holder of a Warrant
Certificate.
The latest time and date at which the Warrants may be exercised (the
"Exercise Deadline") shall be 5:00 P.M. New York City time on the earlier of (i)
the date that is the seventh anniversary of the completion of the Distribution;
or (ii) the Cancellation Date (as defined in Section 2.8 below).
The Company shall use its reasonable efforts to secure the effective
registration of the Warrant Shares under the Securities Act of 1933, as amended
(the "Securities Act"), and register or qualify such shares under applicable
state laws; provided, however, that the Company shall have no obligation to
register the Warrant Shares in the event that, by amendment to the Securities
Act or otherwise, such registration or qualification or the delivery of such
prospectus is not required at the time said Warrant Shares are to be issued; and
further that, if by amendment to the Securities Act or otherwise, some other or
different requirement shall be imposed by act of the Congress of the United
States which shall relate to the issuance of the Warrant Shares upon exercise of
the Warrants, the Company shall use its reasonable efforts to comply with such
requirements so long as the same shall not be more burdensome to the Company
than the registration statement under the Securities Act. Promptly after a
registration statement under the Securities Act covering the aforementioned
Warrant Shares has become effective, or such other action as contemplated hereby
and as may be required has been taken, as the case may be, the Company shall
cause notice thereof or a copy of the prospectus covering the Warrant Shares to
be mailed to each registered holder of a Warrant Certificate.
Section 2.3 Procedure for Exercise of Warrants. During the period
specified in and subject to the provisions of Section 2.2 hereof, Warrants may
be exercised by surrendering the Warrant Certificates representing such Warrants
to the Warrant Agent at the principal office of its corporate trust department
(the "Principal Office"), which is presently at 59 Maiden Lane Plaza Level, New
York, NY 10038, with the election to purchase form set forth on the Warrant
Certificate duly completed and executed, with medallion signatures guaranteed by
a member of a medallion guarantee program ("Signatures Guaranteed"), accompanied
by payment in full of the Exercise Price as provided for in Section 2.1 hereof
in effect at the time of such exercise, together with such taxes as are
specified in Section 6.1 hereof, for each Warrant Share with
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respect to which such Warrant is being exercised. Such Exercise Price and taxes
shall be paid in full by certified check or money order, payable in United
States currency to the order of the Company. The date on which Warrants are
exercised in accordance with this Section 2.3 is sometimes referred to herein as
the "Date of Exercise" of such Warrants.
Section 2.4 Issuance of Common Stock. As soon as practicable after the
Date of Exercise of any Warrants, the Company shall issue, or cause the transfer
agent for the Common Stock, if any, to issue, a certificate or certificates for
the number of full shares of Common Stock to which such holder is entitled,
registered in accordance with the instructions set forth in the election to
purchase. All Warrant Shares shall 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. Each person in whose name any such
certificate for shares of Common Stock is issued shall for all purposes be
deemed to have become the holder of record of the Common Stock represented
thereby on the Date of Exercise of the Warrants resulting in the issuance of
such shares, irrespective of the date of issuance or delivery of such
certificate for shares of Common Stock.
Section 2.5 Certificates for Unexercised Warrants. 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 30 days of the Date of
Exercise, to the registered 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 full 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. Final fractions of shares shall be
treated as provided in Section 3.11 hereof.
Section 2.6 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 of Common Stock that will be sufficient to permit
the exercise in full of all outstanding Warrants.
Section 2.7 Disposition of Proceeds. The Warrant Agent shall account
promptly to the Company with respect to Warrants exercised and concurrently
deliver to the Company all proceeds from such exercise.
Section 2.8 Cancellation of Warrants. At any time after the Vesting Date,
the Company by action of the Board, may at its option, cancel all, but not less
than all of the Warrants provided that the Company is in compliance with its
obligations under Section 2.2 hereof to register the Warrant Shares under the
Securities Act. Notice of such cancellation shall be promptly given to the
Warrant Agent by the Company and such notice (the "Cancellation Notice") shall
be mailed to all registered holders of Warrant Certificates, specifying a date
(the "Cancellation Date") established by the Board which shall be at least 90
days after the date of such notice. The Cancellation Notice will specify the
Cancellation Date and will also state that the right to exercise the Warrants
will terminate at 5:00 p.m., New York City time on the Cancellation Date. The
Company will also make a prompt public announcement of the determination by the
Board of the Cancellation Date by news release and by notice to any national
securities exchange on which the Warrants are listed for trading.
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ARTICLE III
ADDITIONAL SECURITIES AND NOTICE PROVISIONS
Section 3.1 Additional Securities. In addition to the Warrant Shares
issuable upon the exercise of this Warrant as contemplated in Section 2.1 above:
(a) In case the Company shall, at any time after the date hereof and
on or prior to the Date of Exercise (i) declare a dividend or make
a distribution on the Common Stock in shares of the Common Stock,
(ii) subdivide the outstanding shares of the Common Stock into a
greater number of shares, (iii) combine the outstanding shares of
its Common Stock into a smaller number of shares, or (iv) issue
any shares of its capital stock by reclassification of the Common
Stock (including any such reclassification in connection with a
consolidation or merger of the Company), then upon the exercise of
a Warrant the holder of such Warrant shall be entitled to receive
the aggregate number and kind of shares which, if such Warrant had
been exercised immediately prior to such time, such holder would
have been entitled to receive by virtue of such dividend,
subdivision, combination, or reclassification.
(b) In case the Company shall, at any time after the date hereof and
on or prior to the Date of Exercise, issue to all holders of the
Common Stock rights, options, or warrants to subscribe for or
purchase the Common Stock (or securities convertible into or
exchangeable for the Common Stock), and if the same are not issued
or otherwise provided to the holders of Warrants at such time pro
rata on a fully-diluted basis as if all warrants, other rights,
options or convertible securities in respect of Common Stock, and
as if all such securities were exercised or paid, then upon the
exercise of the Warrant, the holder of such Warrant exercised
shall be entitled to receive the aggregate number and kind of
rights, options, or warrants to subscribe for or purchase the
Common Stock (or securities convertible into or exchangeable for
the Common Stock) which if, such holder would have received by
virtue of such issuance of rights, options, or warrants to
subscribe for or purchase the Common Stock (or securities
convertible into or exchangeable for the Common Stock), if such
Warrant had been exercised immediately prior to such time.
Section 3.2 Deferral of Adjustments to Warrant Shares. In any case in
which this Article III shall require that an adjustment in the Warrant Shares be
made effective as of a record date for a specified event, the Company may elect
to defer, until the occurrence of such event, issuing to the holders of the
Warrants, if any holder has exercised a Warrant after such record date, the
shares of Common Stock, if any, issuable upon such exercise over and above the
Warrant Shares; provided, however, that the Company shall deliver to such
exercising holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment. All calculations under this Article III shall
be made to the nearest cent or one-hundredth of a share, as the case may be.
Section 3.3 Adjustment to Number of Warrant Shares. Upon each action set
forth in Section 3.1 that requires an adjustment in the number of Warrant
Shares, each Warrant shall thereupon evidence the right to purchase that number
of Warrant Shares (calculated to the nearest hundredth of a share) obtained by
multiplying the number of shares of Common Stock
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purchasable immediately prior, after giving effect to Section 3.1, to such
adjustment upon exercise of the Warrant by the Exercise Price in effect
immediately prior to such adjustment.
Section 3.4 Reorganizations. In case of any consolidation or merger of
the Company with or into another corporation (other than a merger or
consolidation 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) (such actions being hereinafter
collectively referred to as "Mergers"), there shall thereafter be deliverable
upon exercise of any Warrant (in lieu of the number of shares of Common Stock
theretofore deliverable) the number of shares of stock or other securities or
property to which a holder of the number of shares of Common Stock which would
otherwise have been deliverable upon the exercise of such Warrant would have
been entitled upon such Merger if such Warrant had been exercised in full
immediately prior to such Merger. In case of any Merger, appropriate adjustment,
as determined in good faith by the Board shall be made in the application of the
provisions herein set forth with respect to the rights and interests of Warrant
holders so that the provisions set forth herein shall thereafter be applicable,
as nearly as possible, in relation to any shares or other property thereafter
deliverable upon exercise of Warrants. Any such adjustment shall be made by and
set forth in a supplemental agreement between the Company, or any successor
thereto, and the Warrant Agent and shall for all purposes hereof conclusively be
deemed to be an appropriate adjustment. The Company shall not effect any such
Merger unless upon or prior to the consummation thereof the successor
corporation, or if the Company shall be the surviving corporation in any such
Merger and is not the issuer of the shares of stock or other securities or
property to be delivered to holders of shares of the Common Stock outstanding at
the effective time thereof, then such issuer, shall assume by written instrument
the obligation to deliver to the registered holder of any Warrant Certificate
such shares of stock, securities, cash, or other property as such holder shall
be entitled to purchase in accordance with the foregoing provisions.
Section 3.5 Verification of Computations. Whenever the Warrant Shares are
adjusted as provided pursuant to Section 3.1 hereof, the Company will promptly
obtain a certificate of a firm of independent public accountants of recognized
standing selected by the Board (who may be the regular auditors of the Company)
setting forth the Warrant Shares as so adjusted and a brief statement of the
facts accounting for such adjustment, and will make available a brief summary
thereof to the holders of the Warrant Certificates, at their addresses listed on
the register maintained for that purpose by the Warrant Agent.
Section 3.6 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 3.7 Notice of Certain Actions. In the event the Company shall
publicly announce its intention to:
(a) pay any dividend or make any distribution on shares of Common Stock
in shares of Common Stock or make any other distribution (other
than regularly scheduled cash dividends which are not in an amount
per share greater than the most recent such cash dividend) to all
holders of Common Stock;
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(b) issue any rights, warrants, or other securities to all holders of
Common Stock entitling them to purchase any additional shares of
Common Stock or any other rights, warrants, or other securities;
(c) effect any reclassification of its Common Stock (other than a
reclassification involving merely the subdivision or combination of
outstanding shares of Common Stock) or Merger (other than a merger
in which no distribution of securities or other property is made to
holders of Common Stock); or
(d) take any other action which would result in the issuance of
additional consideration to the holders of Warrants;
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, consolidation, merger, sale, transfer, other
disposition, liquidation, dissolution, winding up, or exchange or other action
shall take place or commence, as the case may be, and the date as of which it is
expected that holders of record of Common Stock shall be entitled to receive
securities or other property deliverable upon such action, if any such date has
been fixed. The Company shall cause copies of such notice to be mailed to each
registered holder of a Warrant Certificate not later than 30 days after such
action.
Section 3.8 Notice of Certain Actions. Whenever any additional
consideration or adjustment is required to be made pursuant to this Article III,
the Company shall cause notice of same to be mailed to the Warrant Agent within
15 days thereafter, such notice to include in reasonable detail (a) the events
precipitating the adjustment, (b) the computation of any such adjustment, and
(c) the Exercise Price and the number of shares or the securities or other
property purchasable upon exercise of each Warrant, after giving effect thereto.
The Warrant Agent shall within 15 days after receipt of such notice from the
Company cause a similar notice to be mailed to each registered holder of a
Warrant Certificate.
Section 3.9 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 3.10 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 registered 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 shall pay a
cash adjustment in respect of such final fraction in an amount equal to the same
fraction of the Current Market Price (as defined below) of a share of Common
Stock calculated in accordance with Section 3.12 hereof.
Section 3.11 Current Market Price. The "Current Market Price" per share
at any date shall be the average of the "closing prices" for the 30 consecutive
trading days ending on the trading
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day immediately preceding the date in question, where the "closing price" on any
day is (a) the last reported sales price regular way, in either case on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading (including, for purposes hereof, the Nasdaq National
Market), if on such date the Common Stock is not listed or admitted to trading
on any national securities exchange, the highest reported bid price for the
Common Stock as furnished by the National Association of Securities Dealers,
Inc. through Nasdaq or a similar organization if Nasdaq is no longer reporting
such information, or (c) if on such date the Common Stock is not listed or
admitted to trading on any national securities exchange and is not quoted by
Nasdaq or any similar organization, as determined by reference to the "pink
sheets" published by National Quotation Bureau or, if not so published, by such
other method of determining market value as the Board shall in good faith from
time to time deem to be fair and such other method shall be conclusive.
Section 3.12 Right to Adjust Exercise Price and Exercise Deadline. The
Company may at any time, by notice to the Warrant Agent, reduce the Exercise
Price to such price, or extend the Exercise Deadline to such date, as the
Company may set forth in such notice or, following the Vesting Date, upon
receipt of the aggregate exercise price for all outstanding Warrants, deem all
such Warrants to have been exercised. Any such reduction shall remain in effect
for such period as may be set forth in such notice. The Warrant Agent shall
promptly after receipt of any such notice from the Company cause a similar
notice to be mailed to each registered holder of a Warrant Certificate.
ARTICLE IV
OTHER PROVISIONS RELATING TO
RIGHTS OF REGISTERED HOLDERS OF WARRANT CERTIFICATES
Section 4.1 Rights of Warrant Holders. No Warrant Certificate shall
entitle the registered holder thereof to any of the rights of a stockholder of
the Company, including without limitation the right to vote, to receive
dividends and other distributions, or 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, 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 a lost, stolen, or destroyed
Warrant Certificate, a new Warrant Certificate for the number of Warrants
represented by the Warrant Certificate so mutilated, 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 the Warrant Agent may prescribe. Any such new Warrant Certificate
shall constitute an original contractual obligation of the Company, whether or
not the allegedly lost, stolen, mutilated, or destroyed Warrant Certificate
shall be at any time enforceable by anyone.
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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 restrictions (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
Signatures 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 upon Surrender 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 cancelled and shall not be reissued by the Company; and,
except as provided in Section 2.5 hereof in case of the exercise of less than
all of the Warrants evidenced by a Warrant Certificate or in Section 5.1 hereof
in case of a split up, combination, exchange, or transfer, no Warrant
Certificate shall be issued hereunder in lieu of such cancelled Warrant
Certificate. Any Warrant Certificate so cancelled shall be destroyed by the
Warrant Agent unless otherwise directed by the Company.
Section 5.3 Agreement of Warrant Certificate Holders. Every holder of a
Warrant Certificate by accepting the same consents and agrees with the Company
and the Warrant Agent and with every other holder of a Warrant Certificate that:
(a) transfer of the Warrant Certificates shall be registered on the
books of the Company maintained for that purpose by the Warrant
Agent only if surrendered at the Principal Office of the Warrant
Agent, duly endorsed or accompanied by a proper instrument of
transfer, with Signatures Guaranteed; and
(b) prior to due presentment for registration of transfer, the Company
and the Warrant Agent may deem and treat the person in whose name
the Warrant Certificate is
9
registered as the absolute owner thereof and of the Warrants
evidenced thereby (notwithstanding any notations of ownership or
writing on the Warrant Certificates made by anyone other than the
Company or the Warrant Agent) for all purposes whatsoever, and
neither the Company nor the Warrant Agent shall be affected by any
notice to the contrary.
ARTICLE VI
PROVISIONS CONCERNING THE WARRANT
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 shares of Common Stock upon the
exercise of any Warrants, but any transfer taxes in connection with the issuance
of Warrant Certificates or certificates for shares of Common Stock in any name
other than that of the registered holder of the Warrant Certificate surrendered
shall be paid by such registered holder; and, in such case, the Company shall
not be required to issue or deliver any Warrant Certificate or certificate for
shares of Common Stock 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 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 30 days after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Warrant Agent or by the registered holder of any Warrant Certificate, then the
registered 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
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
10
Agent and the transfer agent for the Common Stock, and shall forthwith cause a
copy of such notice to be mailed to each registered 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, 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
(a) pay the Warrant Agent reasonable 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 fees and expenses of its
counsel); and (b) 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 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, any Vice Chairman,
the President, any Vice President, the Secretary, any Assistant Secretary, the
Chief Financial Officer, Treasurer, or any Assistant 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 6.7 Books and Records. The Warrant Agent shall maintain the
Company's books and records for registration and registration of transfer of the
Warrant Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Warrant Certificates, the number of
Warrants evidenced on its face by each Warrant Certificate, and the date of each
Warrant Certificate.
Section 6.8 Liability of Warrant Agent. The Warrant Agent shall be liable
hereunder for its own negligence or willful misconduct. The Warrant Agent shall
act hereunder solely as an agent 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
11
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 notice, resolution, waiver, consent, order, certificate, or other 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; 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 counsel fees arising out of or in connection
with its agency under this Agreement, 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 Changes to Agreement. The Warrant Agent may, without the
consent or concurrence of any registered holder of a Warrant Certificate, by
supplemental agreement or otherwise, join with the Company in making any changes
or corrections in this Agreement that they shall have been advised by counsel
(a) are required to cure any ambiguity or to correct any defective or
inconsistent provision or clerical omission or mistake or manifest error herein
contained, (b) 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 (c) 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 registered holders of Warrant
Certificates.
Section 6.13 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 6.14 Successor to Company. The Company will not merge or
consolidate with or into any other corporation or sell or otherwise transfer its
property, assets, and business substantially as an entirety to a successor
corporation unless the corporation resulting from such
12
merger, consolidation, sale, or transfer (if not the Company) shall expressly
assume, by supplemental agreement satisfactory in form and substance to the
Warrant Agent and delivered to the Warrant Agent, the due and punctual
performance and observance of each and every covenant and condition of this
Agreement to be performed and observed by the Company.
Section 6.15 Notices. Any notice or demand required by this Agreement to
be given or made by the Warrant Agent or by the registered holder of any Warrant
Certificate to or on the Company shall be sufficiently given if made in writing
and shall be mailed by certified mail, return receipt requested or sent by
Federal Express, Express Mail, or similar overnight delivery or courier service
or delivered (in person or by telecopy, telex, or similar telecommunications
equipment) against receipt to the party to whom it is to be given as follows:
if to the Company:
Atlantic Coast Entertainment Holdings, Inc.
c/o Sands Hotel & Casino
Indiana Avenue & Brighton Park
Atlantic City, New Jersey 08401
Phone: (609) 441-4432
Attention: Douglas S. Niethold.
If to the Warrant Agent:
American Stock Transfer and Trust Company
59 Maiden Lane
Plaza Level
New York, NY 10038
Phone: 1-800-937-5449
Attention: Office of General Counsel
Any notice or demand required by this Agreement to be given or made by the
Company or the Warrant Agent to or on the registered 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 registered holder at his last address as shown on the books of
the Company maintained by the Warrant Agent. Otherwise such notice or demand
shall be deemed given when received by the party entitled thereto.
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 registered holder
of a Warrant Certificate 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. This Agreement and the Warrant Certificates
shall be governed by and construed in accordance with the laws of the State of
New York, without regard
13
to principles of conflicts of law. Each of the parties submits to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement or
any of the transactions contemplated hereby, and hereby waives, to the maximum
extent permitted by law, any objection, including an objections based on forum
non conveniens, to the bringing of any such proceeding in such jurisdictions.
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 registered holders of the Warrant
Certificates 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 registered holders of the
Warrant Certificates.
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, including, without limitation, as trustee under any
indenture or as transfer agent for any securities of the Company or for any
other 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 Corporate Trust Department. Copies of this
Agreement may be obtained upon written request addressed to:
Douglas S. Niethold
c/o Sands Hotel & Casino
Indiana Avenue & Brighton Park
Atlantic City, New Jersey 08401
(609) 441-4432
14
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
ATLANTIC COAST ENTERTAINMENT HOLDINGS, INC.
BY: /s/ Douglas S. Niethold
----------------------------------------------
Name: Douglas S. Niethold
Title: Vice-President, Finance, Chief Financial
Officer, and Principal Accounting Officer
AMERICAN STOCK TRANSFER AND TRUST COMPANY
BY: _______________________________________________
Name:
Title:
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
NO.
CERTIFICATE FOR _____ WARRANTS
ATLANTIC COAST ENTERTAINMENT HOLDINGS, INC.
COMMON STOCK PURCHASE WARRANT CERTIFICATE
THIS CERTIFIES that ____________________________________ or registered
assigns is the registered holder (the "Registered Holder") of the number of
Warrants set forth above, each of which represents the right to purchase .275
fully paid and nonassessable share of Common Stock, par value $.01 per share
(the "Common Stock"), of Atlantic Coast Entertainment Holdings, Inc., (the
"Company"), a Delaware corporation, at the initial exercise price (the "Exercise
Price") of $.01, at any time after the shares of Common Stock issuable upon
exercise of the Warrants evidenced hereby have been registered under the
Securities Act of 1933, as amended, or such other action as may be required by
Federal or state law relating to the issuance or distribution of securities
shall have been taken, but not before the Vesting Date hereinafter referred to,
and not after the Exercise Deadline hereinafter referred to, by surrendering
this Warrant Certificate, with the form of election to purchase set forth hereon
duly executed with signatures guaranteed as provided below, at the office
maintained pursuant to the Warrant Agreement hereinafter referred to for that
purpose by American Stock Transfer and Trust Company, or its successor as
warrant agent (any such warrant agent being herein called the "Warrant Agent"),
and by paying in full the Exercise Price, plus transfer taxes, if any. Payment
of the Exercise Price shall be made in United States currency, by certified
check or money order payable to the order of the Company. Capitalized terms used
herein, but not otherwise defined shall have the meaning set forth in the
Warrant Agreement, (the "Warrant Agreement") dated as of July 22, 2004 by and
between the Company and the Warrant Agent.
Upon certain events provided for in the Warrant Agreement, the number of
shares of Common Stock issuable upon the exercise of each Warrant is required to
be adjusted.
Each Warrant may be exercised at any time after the earliest to occur of
the following events (the first date on which any such event occurs being
referred to as the "Vesting Date") :
(a) the payment of the entire principal amount and accrued interest on
any of the Company's outstanding 3% Notes due 2008 issued by the
Company (the "New Notes"), pursuant to and in accordance with the
terms thereof whether such payment
is in the form of cash or by issuance of shares of Common Stock to
the holder thereof in lieu of cash payment or any conversion of
any of such notes into common stock pursuant to and in accordance
with the terms thereof;
(b) a determination by a majority of the board of directors of the
Company (the "Board") (including at least one independent director)
that the Warrants may be exercised; and
(c) payment in full by the Parent of principal and accrued, but unpaid
interest on all outstanding 11% Notes due 2005 issued by the Parent
which have not been exchanged for the New Notes in the Transaction.
Promptly after the Vesting Date, the Company shall send written notice to
the Warrant Agent that such Vesting Date has occurred (the "Vesting Notice").
The Warrant Agent shall within ten days after receipt of the Vesting Notice
cause a similar notice to be mailed to each registered holder of a Warrant
Certificate.
The latest time and date at which the Warrants may be exercised (the
"Exercise Deadline") shall be 5:00 P.M. New York City time on the earlier of (i)
the date that is the seventh anniversary of the completion of the Distribution;
or (ii) the Cancellation Date (as defined below).
At any time after the Vesting Date, the Company by action of the Board,
may at its option, cancel all, but not less than all of the Warrants provided
that the Company uses reasonable efforts to register the Warrant Shares under
the Securities Act. Notice of such cancellation shall be promptly given to the
Warrant Agent by the Company and such notice (the "Cancellation Notice") shall
be mailed to all registered holders of Warrant Certificates, not less than 90
days prior to the date established by the Board (the "Cancellation Date"). The
Cancellation Notice will specify the Cancellation Date and will also state that
the right to exercise the Warrants will terminate at 5:00 p.m., New York City
time on the Cancellation Date. The Company will also make a prompt public
announcement by news release and by notice to any national securities exchange
on which the Warrants are listed for trading.
After the Exercise Deadline, all Warrants evidenced hereby shall
thereafter become void.
Prior to the Exercise Deadline, subject to any applicable laws, rules, or
regulations restricting transferability and to any restriction on
transferability that may appear on this Warrant Certificate in accordance with
the terms of the Warrant Agreement, the Registered Holder shall be entitled to
transfer this Warrant Certificate in whole or in part upon surrender of this
Warrant Certificate at the office of the Warrant Agent maintained for that
purpose with the form of assignment set forth hereon duly executed, with
signatures guaranteed by a member firm of a national securities exchange, a
commercial bank (not a savings bank or a savings and loan association) or a
trust company located in the United States, a member of the National Association
of Securities Dealers, Inc., or other eligible guarantor institution which is a
participant in a signature guarantee program (as such terms are defined in Reg.
240.17Ad-15 under the Securities Exchange Act of 1934, as amended) acceptable to
the Warrant Agent. Upon any such transfer, a new Warrant Certificate or Warrant
Certificates representing the same aggregate number of Warrants will be issued
in accordance with instructions in the form of assignment.
Upon the exercise of less than all of the Warrants evidenced by this
Warrant Certificate, there shall be issued to the Registered Holder a new
Warrant Certificate in respect of the Warrants not exercised.
Prior to the Exercise Deadline, the Registered Holder shall be entitled
to exchange this Warrant Certificate, with or without other Warrant
Certificates, for another Warrant Certificate or Warrant Certificates for the
same aggregate number of Warrants, upon surrender of this Warrant Certificate at
the office maintained for such purpose by the Warrant Agent.
No fractional shares will be issued upon the exercise of Warrants. As to
any final fraction of a share which the registered holder of one or more Warrant
Certificates, the rights under which are exercised in the same transaction,
would otherwise be entitled to purchase upon such exercise, the Company shall
pay the cash value thereof determined as provided in the Warrant Agreement.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement and is subject to the terms and provisions contained in said
Warrant Agreement, to all of which terms and provisions the Registered Holder
consents by acceptance hereof.
This Warrant Certificate shall not entitle the registered holder of such
Certificate to any of the rights of a stockholder of the Company, including,
without limitation, the right to vote, to receive dividends and other
distributions, or to attend or receive any notice of meetings of stockholders or
any other proceedings of the Company.
This Warrant Certificate shall not be valid for any purpose until it
shall have been countersigned by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its facsimile corporate seal.
ATLANTIC COAST ENTERTAINMENT HOLDINGS,
INC.
BY: ________________________________________
Vice-President
Seal Attest:
_______________________________________
Secretary
Countersigned:
AMERICAN STOCK TRANSFER AND TRUST COMPANY
BY: ________________________________________
Dated
[FORM OF]
ELECTION TO PURCHASE
The undersigned hereby irrevocably elects to exercise __________ of the
Warrants represented by this Warrant Certificate and to purchase the shares of
Common Stock issuable upon the exercise of said Warrants, and requests that
certificates for such shares be issued and delivered as follows:
ISSUE TO:
(NAME)
(ADDRESS, INCLUDING ZIP CODE)
(SOCIAL SECURITY OR OTHER TAX IDENTIFICATION NUMBER)
DELIVER TO:
(NAME)
at
(ADDRESS, INCLUDING ZIP CODE)
If the number of Warrants hereby exercised is less than all the Warrants
represented by this Warrant Certificate, the undersigned requests that a new
Warrant Certificate representing the number of full Warrants not exercised be
issued and delivered as set forth below.
In full payment of the purchase price with respect to the Warrants
exercised and transfer taxes, if any, the undersigned hereby tenders payment of
$_________ by certified check or money order payable in United States currency
to the order of the Company.
Dated____________________, 20__
Name of Warrant Holder:
-----------------------------------------------------
Address:
-------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Signature:
-----------------------------------------------------------------
[FORM OF] ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
unto the Assignee named below all of the rights of the undersigned represented
by the within Warrant Certificate, with respect to the number of Warrants set
forth below:
NAME OF ASSIGNEE ADDRESS NO. OF WARRANTS
- ---------------- ------- ----------------
and does hereby irrevocably constitute and appoint ___________ Attorney to make
such transfer on the books of Atlantic Coast Entertainment Holdings, Inc.
maintained for that purpose, with full power of substitution in the premises.
Dated: ___.
-----------------------------------
Signature
-----------------------------------
SIGNATURE(S) GUARANTEED Signature
NOTICE: The signature(s) on this
assignment must correspond with
the name(s) as written upon the
face of the Certificate, in every
particular, without alteration or
enlargement or any change
By ________________________________________ whatever.
THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION.
(Banks, Stock Brokers, Savings and Loan
Associations, and Credit Unions) WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM PURSUANT TO
S.E.C. RULE 17Ad-15.