Exhibit 10.36
Form of Amended and Restated Warrant issued November 2, 1998
to Certain Members of Management and Several Employees.
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE SUCH A REGISTRATION IS
IN EFFECT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT.
AUTOTOTE CORPORATION
(formerly UNITED TOTE, INC.)
COMMON STOCK PURCHASE WARRANT
Issued October 31, 1991
Amended and Restated
Effective as of November 2, 1998
[No. ]
Autotote Corporation, a Delaware corporation (the "Company"), for value
received, hereby certifies that ____________, or registered assigns, is entitled
to purchase from the Company _________ duly authorized, validly issued, fully
paid and nonassessable shares (as such number of shares may be adjusted pursuant
to Sections 2 through 4 below, the "Warrant Shares") of Class A Common Stock,
par value $.01 per share (the "Common Stock"), of the Company at the initial
purchase price per share of $1.6875 (the "Initial Warrant Price"), at any time
or from time to time prior to 5:00 p.m., eastern standard time, on October 31,
2002, (the "Expiration Date"), but, except in the event of a Change in Control
(as hereinafter defined), no earlier than November 1, 1999 (the "November
Date"), all subject to the terms, conditions and adjustments set forth below in
this Warrant. Certain capitalized terms used in this Warrant are defined in
Section 11 hereof.
1. EXERCISE OF WARRANT
1.1. Manner of Exercise; Payment
1.1.1. Exercise and Payment. This Warrant may be exercised by the holder
hereof, in whole or in part, during normal business hours on any
Business Day on or prior to the Expiration Date, but, except in the
event of a Change in Control, no earlier than the November Date, by
surrender of this Warrant to the Company at its office maintained
pursuant to Section 10.2(a) hereof, accompanied by the purchase form
attached to this Warrant (or a reasonable facsimile thereof) duly
executed by such holder and accompanied by payment, in cash or by
certified or official bank check payable to the order of the Company
(or by any combination of such methods), in the amount obtained by
multiplying (a) the number of Warrant Shares (without giving effect
to any adjustment thereof) designated in the purchase form by (b)
the Initial Warrant Price, and such holder shall thereupon
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be entitled to receive the number of duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock (or
Other Securities) determined as provided in Sections 2 through 4
hereof.
1.1.2. Cashless Exercise. The holder may, in lieu of delivery of the check
or cash described in Section 1.1.1. above, exercise this Warrant on
a "cashless" basis and pay the purchase price by delivering to the
Company a duly completed and executed purchase form providing for
payment of the Warrant Price by cancellation of a number of Warrant
Shares having a Current Market Price equal to the Warrant Price of
the Warrant Shares being purchased.
1.2. When Exercise Effective. Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
Business Day on which this Warrant shall have been surrendered to the Company as
provided in Section 1.1 hereof, and at such time the Person or Persons in whose
name or names any certificate or certificates for shares of Common Stock (or
Other Securities) shall be issuable upon such exercise as provided in Section
1.3 hereof shall be deemed to have become the holder or holders of record
thereof.
1.3. Delivery of Stock Certificates, etc. As soon as practicable after
each exercise of this Warrant, in whole or in part, and in any event within five
Business Days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the holder hereof or, subject to Section 6 hereof, as such holder
(upon payment by such holder of any applicable transfer taxes) may direct:
(a) a certificate or certificates for the number of duly authorized,
validly issued, fully paid and nonassessable shares of Common Stock
(or Other Securities) to which such holder shall be entitled upon
such exercise plus, in lieu of any fractional share to which such
holder would otherwise be entitled, cash in an amount equal to the
same fraction of the Market Price per share on the Business Day next
preceding the date of such exercise; and
(b) in case such exercise is in part only, a new Warrant or Warrants of
like tenor, dated the date hereof and calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock
equal (without giving effect to any adjustment thereof) to the
number of such shares called for on the face of this Warrant minus
the number of such shares designated by the holder upon such
exercise as provided in Section 1.1 hereof.
2. ADJUSTMENT OF COMMON STOCK ISSUABLE UPON EXERCISE.
2.1. General; Number of Shares; Warrant Price. The number of shares of
Common Stock which the holder of this Warrant shall be entitled to receive upon
each exercise hereof shall be determined by multiplying the number of shares of
Common Stock which would otherwise (but for the provisions of this Section 2) be
issuable upon such exercise, as designated by the holder hereof pursuant to
Section 1.1 hereof, by the fraction of which (a) the numerator is the Initial
Warrant Price and (b) the denominator is the Warrant Price in effect on the date
of such exercise. The "Warrant Price" shall initially be the Initial Warrant
Price, shall be adjusted and readjusted from time to time as provided in this
Section 2 and, as so adjusted or readjusted, shall remain in effect until a
further adjustment or readjustment thereof is required by this Section 2.
2.2. Adjustment of Warrant Price; Issuance of Additional Shares of Common
Stock. In case the Company at any time or from time to time after the date
hereof shall issue or sell Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued pursuant to Section 2.3 or
2.4 hereof) without consideration or for a consideration per share less than the
Current Market Price in effect immediately prior to such issue or sale, then,
and in each such case, subject to Section 2.7 hereof, such
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Warrant Price shall be reduced, concurrently with such issue or sale, to a price
(calculated to the nearest .001 of a cent) determined by multiplying such
Warrant Price by a fraction:
(a) the numerator of which shall be (i) the number of shares of Common
Stock outstanding immediately prior to such issue or sale price plus
(ii) the number of shares of Common Stock which the aggregate
consideration received by the Company for the total number of such
Additional Shares of Common Stock so issued or sold would purchase
at the Current Market Price; and
(b) the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such issue or sale.
2.3 Treatment of Options and Convertible Securities. In case the Company
at any time or from time to time after the date hereof shall issue, sell, grant
or assume, or shall fix a record date for the determination of holders of any
class of securities entitled to receive, any Options or Convertible Securities,
then, and in each such case, the maximum number of Additional Shares of Common
Stock (as set forth in the instrument relating thereto, without regard to any
provisions contained therein for a subsequent adjustment of such number the
purpose of which is to protect against dilution) at any time issuable upon the
exercise of such Options or, in the case of Convertible Securities and Options
therefor, the conversion or exchange of such Convertible Securities, shall be
deemed to be Additional Shares of Common Stock issued as of the time of such
issue, sale, grant or assumption or, in case such a record date shall have been
fixed, as of the close of business on such record date (or, if the Common Stock
trades on an ex-dividend basis, on the date prior to the commencement of
ex-dividend trading); provided, however, that such Additional Shares of Common
Stock shall not be deemed to have been issued unless the consideration per share
(determined pursuant to Section 2.5 hereof) of such shares would be less than
the Current Market Price in effect on the date of and immediately prior to such
issue, sale, grant or assumption or immediately prior to the close of business
on such record date (or, if the Common Stock trades on an ex-dividend basis, on
the date prior to the commencement of ex-dividend trading), as the case may be;
and provided, further, that in any such case in which Additional Shares of
Common Stock are deemed to be issued:
(a) no further adjustment of the Warrant Price shall be made upon the
exercise of such options or the conversion or exchange of such
Convertible Securities and the consequent issue or sale of
Convertible Securities or shares of Common Stock;
(b) if such options or Convertible Securities by their terms provide,
with the passage of time or otherwise, for any increase in the
consideration payable to the Company, or decrease in the number of
Additional Shares of Common Stock issuable, upon the exercise,
conversion or exchange thereof (by change of rate or otherwise), the
Warrant Price computed upon the original issue, sale, grant or
assumption thereof (or upon the occurrence of the record date, or
date prior to the commencement of ex-dividend trading, as the case
may be, with respect thereto), and any subsequent adjustments based
thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease
insofar as it affects such options, or the rights of conversion or
exchange under such Convertible Securities, which are outstanding at
such time;
(c) upon the expiration (or purchase by the Company and cancellation or
retirement) of any such options which shall not have been exercised,
or the expiration of any rights of conversion or exchange under any
such Convertible Securities which (or purchase by the Company and
cancellation or retirement of any such Convertible Securities the
rights of conversion or exchange under which) shall not have been
exercised, the Warrant Price computed upon the original issue, sale,
grant or assumption thereof (or upon the occurrence of the record
date, or date prior to the commencement of ex-dividend trading, as
the case may be, with respect thereto), and any subsequent
adjustments based thereon, shall, upon
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(and effective as of) such expiration (or such cancellation or
retirement, as the case may be), be recomputed as if:
(i) in the case of Options or Convertible Securities, the only
Additional Shares of Common Stock issued or sold were the
Additional Shares of Common Stock, if any, actually issued or
sold upon the exercise of such Options or the conversion or
exchange of such Convertible Securities and the consideration
received therefor was the consideration actually received by
the Company for the issue, sale, grant or assumption of all
such Options, whether or not exercised, plus the consideration
actually received by the Company upon such exercise, or for
the issue or sale of all such Convertible Securities which
were actually converted or exchanged, plus the additional
consideration, if any, actually received by the Company upon
such conversion or exchange, and
(ii) in the case of Options for Convertible Securities, only the
Convertible Securities, if any, actually issued or sold upon
the exercise of such Options were issued at the time of the
issue, sale, grant or assumption of such Options, and the
consideration received by the Company for the Additional
Shares of Common Stock deemed to have then been issued was the
consideration actually received by the Company for the issue,
sale, grant or assumption of all such Options, whether or not
exercised, plus the consideration deemed to have been received
by the Company (pursuant to Section 2.5 hereof) upon the issue
or sale of such Convertible Securities with respect to which
such Options were actually exercised; and
If the consideration provided for in any Option or the additional consideration,
if any, payable upon the conversion or exchange of any Convertible Security
shall be reduced, or the rate at which any option is exercisable or any
Convertible Security is convertible into or exchangeable for shares of Common
Stock shall be increased, at any time under or by reason of provisions with
respect thereto designed to protect against dilution, then, effective
concurrently with each such change, the Warrant Price then in effect shall first
be adjusted to eliminate the effects (if any) of the issuance (or deemed
issuance) of such Option or Convertible Security on the Warrant Price and then
readjusted as if such Option or Convertible Security had been issued on the date
of such change with the terms in effect after such change, but only if as a
result of such adjustment the Warrant Price then in effect hereunder is thereby
reduced.
2.4. Treatment of Stock Dividends, Stock Splits, etc. In case the Company
at any time or from time to time after the date hereof shall declare or pay any
dividend on the Common Stock payable in Common Stock, or shall effect a
subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock), then, and in each such case, Additional Shares of
Common Stock shall be deemed to have been issued (a) in the case of any such
dividend, immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to receive such
dividend, or (b) in the case of any such subdivision, at the close of business
on the day immediately prior to the day upon which such corporate action becomes
effective.
2.5. Computation of Consideration. For the purposes of this Section 2:
(a) the consideration for the issue or sale of any Additional Shares of
Common Stock shall, irrespective of the accounting treatment of such
consideration:
(i) insofar as it consists of cash, be computed without deducting
any expenses paid or incurred by the Company or any
commissions or compensations paid or concessions or discounts
allowed to underwriters, dealers or others performing similar
services in connection with such issue or sale;
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(ii) insofar as it consists of property (including securities)
other than cash, and insofar as it consists neither of cash
nor of other property, be computed at the fair value thereof
at the time of such issue or sale, as determined in good faith
by the Board of Directors of the Company; and
(iii) in case Additional Shares of Common Stock are issued or sold
together with other stock or securities or other assets of the
Company for a consideration which covers both, be the portion
of such consideration so received, computed as provided in
clauses (i) and (ii) above, allocable to such Additional
Shares of Common Stock, all as determined in good faith by the
Board of Directors of the Company;
(b) Additional Shares of Common Stock deemed to have been issued
pursuant to Section 2.3 hereof shall be deemed to have been issued
for a consideration per share determined by dividing:
(i) the total amount of cash and other property, if any, received
and receivable by the Company as direct consideration for the
issue, sale, grant or assumption of the Options or Convertible
Securities in question, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments
relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such consideration the
purpose of which is to protect against dilution) payable to
the Company upon the exercise in full of such Options or the
conversion or exchange of such Convertible Securities or, in
the case of Options for Convertible Securities, the exercise
of such Options for Convertible Securities and the conversion
or exchange of such Convertible Securities, in each case
computing such consideration as provided in the foregoing
clause (a), by
(ii) the maximum number of shares of Common Stock (as set forth in
the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of
such number the purpose of which is to protect against
dilution) issuable upon the exercise of such Options or the
conversion or exchange of such Convertible Securities; and
(c) Additional Shares of Common Stock deemed to have been issued
pursuant to Section 2.4 hereof shall be deemed to have been issued
for no consideration.
2.6. Adjustments for Combinations, etc. In case the outstanding shares of
Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Warrant Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.
2.7. Minimum Adjustment of Warrant Price. If the amount of any adjustment
of the Warrant Price required pursuant to this Section 2 would be less than
one-tenth (1/10) of one percent (1%) of the Warrant Price in effect at the time
such adjustment is otherwise so required to be made, such amount shall be
carried forward and adjustment with respect thereto made at the time of and
together with any subsequent adjustment which, together with such amount and any
other amount or amounts so carried forward, shall aggregate at least one tenth
(1/10) of one percent (1%) of such Warrant Price.
2.8. Shares Deemed Outstanding. For all purposes of the computations to be
made pursuant to this Section 2, (i) there shall be deemed to be outstanding all
shares of Common Stock issuable pursuant to the exercise of Options and
conversion of Convertible Securities outstanding on October 31, 1998, (ii)
immediately after any Additional Shares of Common Stock are deemed to have been
issued pursuant to
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Section 2.3 or 2.4 hereof, such Additional Shares shall be
deemed to be outstanding, (iii) treasury shares shall not be deemed to be
outstanding, and (iv) no adjustment shall be made in the Warrant Price upon the
issuance of shares of Common Stock pursuant to Options and Convertible
Securities so deemed to be outstanding, but this Section 2.8 shall not prevent
other adjustments in the Warrant Price arising by virtue of such outstanding
Options or Convertible Securities pursuant to the provisions of Section 2.3
hereof; provided, however, that, for purposes of calculating adjustments to the
Warrant Price, there shall be deemed to be outstanding immediately after giving
effect to any issuance of shares of Common Stock, Options or Convertible
Securities all shares of Common Stock issuable upon the exercise of Options and
conversion of Convertible Securities then outstanding (including without
limitation the Warrants) after giving effect to anti-dilution provisions
contained in all such outstanding options and Convertible Securities which cause
an adjustment in the number of shares of Common Stock so issuable, either by
virtue of such issuance of shares of Common Stock, Options or Convertible
Securities or by virtue of the operation of such anti-dilution provisions.
Notwithstanding the foregoing, no adjustment in the number of shares of Common
Stock into which this Warrant is exercisable shall be made upon the issuance of
shares of Common Stock upon exercise of options granted under the Company's 1984
Stock Option Plan, as amended, 1992 Equity Incentive Plan, as amended, 1995
Equity Incentive Plan, as amended, or 1997 Incentive Compensation Plan, or upon
the grant or exercise of Options or Convertible Securities or issuance of Common
Stock, to officers, employees and directors of, or consultants or lenders to,
the Company or its subsidiaries pursuant to arrangements, contracts or plans
approved by the Board of Directors of the Company (and by an independent
committee thereof with respect to grants and issuances to directors) for
compensatory purposes.
3. CONSOLIDATION, MERGER, ETC.
3.1. Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc. In case the Company after the date hereof (a) shall
consolidate with or merge into any other Person and shall not be the continuing
or surviving corporation of such consolidation or merger, or (b) shall permit
any other Person to consolidate with or merge into the Company and the Company
shall be the continuing or surviving Person but, in connection with such
consolidation or merger, the Common Stock or Other Securities shall be changed
into or exchanged for stock or Other Securities of any other Person or cash or
any other property, or (c) shall transfer all or substantially all of its
properties or assets to any other Person, or (d) shall effect a capital
reorganization or reclassification of the Common Stock or Other Securities
(other than a capital reorganization or reclassification to the extent that such
capital reorganization or reclassification results in the issue of Additional
Shares of Common Stock for which adjustment in the Warrant Price is provided in
Section 2.2 hereof), then, and in the case of each such transaction, proper
provision shall be made so that, upon the basis and the terms and in the manner
provided in this Warrant, the holder of this Warrant, upon the exercise hereof
at any time after the consummation of such transaction, shall be entitled to
receive (at the aggregate Warrant Price in effect at the time of such
consummation for all Common Stock or Other Securities issuable upon such
exercise immediately prior to such consummation), in lieu of the Common Stock or
Other Securities issuable upon such exercise prior to such consummation, the
greatest amount of securities, cash or other property to which such holder would
actually have been entitled as a shareholder upon such consummation if such
holder had exercised the rights represented by this Warrant immediately prior
thereto, subject to adjustments (subsequent to such consummation) as nearly
equivalent as possible to the adjustments provided for in Sections 2, 3 and 4
hereof.
3.2. Assumption of Obligations. Notwithstanding anything contained in the
Warrants to the contrary, the Company will not effect any of the transactions
described in clauses (a) through (d) of Section 3.1 hereof unless, prior to the
consummation thereof, each Person (other than the Company) which may be required
to deliver any stock, securities, cash or property upon the exercise of this
warrant as provided herein shall assume, by written instrument delivered to, and
reasonably satisfactory to, the Company, (a) the obligations of the Company
under this Warrant (and if the Company shall survive the consummation of such
transaction, such assumption shall be in addition to, and shall not release the
Company from, any continuing obligations of the Company under this Warrant) and
(b) the obligation to deliver to such holder such shares of
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stock, securities, cash or property as, in accordance with the foregoing
provisions of this Section 3, such holder may be entitled to receive.
4. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
certificate of incorporation or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issue or sale of securities or
any other voluntary action, intentionally avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the holder of this Warrant against dilution or other impairment. Without
limiting the generality of the foregoing, the Company (a) will not permit the
par value of any shares of stock receivable upon the exercise of this Warrant to
exceed the amount payable therefor upon such exercise, (b) will take all such
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable shares of stock on the exercise
of the Warrants from time to time outstanding, and (c) will not take any action
which results in any adjustment of the Warrant Price if the total number of
shares of Common Stock (or Other Securities) issuable after the action upon the
exercise of all of the Warrants would exceed the total number of shares of
Common Stock (or Other Securities) then authorized by the Company's certificate
of incorporation and available for the purpose of issue upon such exercise.
5. NOTICES OF CORPORATE ACTION. In the event of
(a) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any
right to subscribe for, purchase or otherwise acquire any shares of
stock of any class or any Other Securities or property, or to
receive any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any
consolidation or merger involving the Company and any other Person
or any transfer of all or substantially all the assets of the
Company to any other Person, or
(c) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company, or
(d) any issuance of any Common Stock, Convertible Security or Option by
the Company requiring an adjustment of the Warrant Price pursuant to
Section 2.2 hereof,
the Company will mail to each holder of a Warrant a notice specifying (i) the
date or expected date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, (ii) the date or expected date on which any
such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place, the time, if
any such time is to be fixed, as of which the holders of record of Common Stock
(or Other Securities) shall be entitled to exchange their shares of Common Stock
(or Other Securities) for the securities or other property deliverable upon such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up and a description in reasonable
detail of the transaction, and (iii) the date of such issuance, together with a
description of the security so issued and the consideration received by the
Company therefor. Such notice shall be mailed at least 10 days prior to the date
therein specified.
6. [Deleted].
7. RESTRICTIONS ON TRANSFER.
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7.1. Restrictive Legends. Except as otherwise permitted by this Section 7,
each certificate for Common Stock (or Other Securities) issued upon the exercise
of any Warrant, each certificate issued upon the direct or indirect transfer of
any such Common Stock (or Other Securities), and each Warrant issued upon direct
or indirect transfer or in substitution for any Warrant pursuant to Section 10
hereof shall be transferable only upon satisfaction of the conditions specified
in this Section 7 and shall be stamped or otherwise imprinted with appropriate
legends referring to such restrictions and any other legend referred by law.
7.2 Notice of Proposed Transfer; Opinions of Counsel. Prior to any
transfer of any Restricted Securities which are not registered under an
effective registration statement under the Securities Act, the holder thereof
will give written notice to the Company of such holder's intention to effect
such transfer and to comply in all other respects with this Section 7.2. Each
such notice (a) shall describe the manner and circumstances of the proposed
transfer in sufficient detail to enable counsel to render the opinions referred
to below, and (b) shall designate counsel for the holder giving such notice. The
Company will promptly submit a copy thereof to its counsel. The following
provisions shall then apply:
(i) If in the opinion of both such counsel the proposed transfer
may be effected without registration of such Restricted
Securities under the Securities Act, such holder shall
thereupon be entitled to transfer such Restricted Securities
in accordance with the terms of the notice delivered by such
holder to the Company. Each certificate representing such
Restricted Securities issued upon or in connection with such
transfer shall bear the restrictive legends required by
Section 7.1 hereof. If for any reason counsel for the Company
(after having been furnished with the information required to
be furnished by clause (a) of this Section 7.2) shall fail to
deliver an opinion to the Company as aforesaid within 15 days
after such information has been furnished, then for all
purposes of this Agreement the opinion of counsel for the
Company shall be deemed to be the same as the opinion of
counsel for such holders.
(ii) If in the opinion of either of or both such counsel the
proposed transfer may not legally be effected without
registration of such Restricted Securities under the
Securities Act (such opinion or opinions to state the basis of
the legal conclusions reached therein), the Company will
promptly so notify the holder thereof and thereafter such
holder shall not be entitled to transfer such Restricted
Securities until either (x) receipt by the Company of a
further notice from such holder pursuant to the foregoing
provisions of this Section 7.2 and fulfillment of the
provisions of clause (i) above or (y) such Restricted
Securities have been effectively registered under the
Securities Act.
The Company will pay the reasonable fees and disbursements of counsel for the
Company in connection with all opinions rendered by them pursuant to this
Section 7.2 and pursuant to Section 7.3 hereof.
7.3. Termination of Restrictions. The restrictions imposed by this Section
7 upon the transferability of Restricted Securities shall cease and terminate as
to any particular Restricted Securities (a) when such Restricted Securities
shall have been effectively registered under the Securities Act, or (b) when, in
the opinions of both counsel for the holder thereof and counsel for the Company,
such restrictions are no longer required in order to insure compliance with the
Securities Act. Whenever such restrictions shall cease and terminate as to any
Restricted Securities, the holder thereof shall be entitled to receive from the
Company, without expense (other than applicable transfer taxes, if any), new
securities of like tenor not bearing the applicable legends required by Section
7.1 hereof.
8. AVAILABILITY OF INFORMATION. The Company will comply with the reporting
requirements of Sections 13 and 15(d) of the Exchange Act and will comply with
all other public information reporting
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requirements of the Commission (including Rule 144 promulgated by the Commission
under the Securities Act) from time to time in effect and relating to the
availability of an exemption from the Securities Act for the sale of any
Restricted Securities. The Company will also cooperate with each holder of any
Restricted Securities in supplying such information as may be necessary for such
holder to complete and file any information reporting forms presently or
hereafter required by the Commission as a condition to the availability of an
exemption from the Securities Act for the sale of any Restricted Securities. The
Company will furnish to each holder of any Warrants, promptly upon their
becoming available, copies of all financial statements, reports, notices and
proxy statements sent or made available generally by the Company to its
stockholders, and copies of all regular and periodic reports and all
registration statements and prospectuses filed by the Company with any
securities exchange or with the Commission.
9. RESERVATION OF STOCK, ETC. The Company will at all times reserve and keep
available, solely for issuance and delivery upon exercise of the Warrants, the
number of shares of Common Stock of each class (or Other Securities) from time
to time issuable upon exercise of all Warrants at the time outstanding. All
shares of Common Stock (or Other Securities) issuable upon exercise of any
Warrants shall be duly authorized and, when issued upon such exercise, shall be
validly issued and, in the case of shares, fully paid and nonassessable with no
liability on the part of the holders thereof.
10. OWNERSHIP, TRANSFER AND SUBSTITUTION OF WARRANTS.
10.1. Ownership of Warrants. The Company may treat the person in whose
name any Warrant is registered on the register kept at the office of the Company
maintained pursuant to Section 10.2(a) hereof as the owner and holder thereof
for all purposes, notwithstanding any notice to the contrary, except that, if
and when any Warrant is properly assigned in blank, the Company may (but shall
not be obligated to) treat the bearer thereof as the owner of such Warrant for
all purposes, notwithstanding any notice to the contrary. Subject to Section 7
hereof, a Warrant, if properly assigned, may be exercised by a new holder
without a new Warrant first having been issued.
10.2. Office; Transfer and Exchange of Warrants.
(a) The Company will maintain an office (which may be an agency
maintained at a bank) in Newark, Delaware where notices,
presentations and demands in respect of this Warrant may be made
upon it. Such office shall be maintained at 220 S. Continental
Drive, Suite 407, Newark, Delaware, 19713 until such time as the
Company shall notify the holders of the Warrants of any change of
location of such office.
(b) The Company shall cause to be kept at its office maintained pursuant
to Section 10.2(a) hereof a register for the registration and
transfer of the Warrants. The names and addresses of holders of
Warrants, the transfers thereof and the names and addresses of
transferees of Warrants shall be registered in such register. The
Person in whose name any Warrant shall be so registered shall be
deemed and treated as the owner and holder thereof for all purposes
of this Warrant, and the Company shall not be affected by any notice
or knowledge to the contrary.
(c) Upon the surrender of this Warrant to the Company, at the office
maintained pursuant to Section 10.2(a) hereof, for transfer or
exchange by the holder, with, in the case of a transfer, the
Assignment Form attached hereto (or a reasonable facsimile thereof)
duly executed by such holder, the Company at its expense will
(subject to compliance with Section 7 hereof, if applicable) execute
and deliver a new Warrant or Warrants of like tenor in the name, as
the case may be, of the assignee(s) (upon payment by the holder of
any applicable transfer taxes), or the holder, calling in the
aggregate on the face or faces thereof for the number of shares of
Common Stock called for on the face or faces of the Warrant or
Warrants so surrendered.
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10.3. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction of any Warrant,
upon delivery of indemnity reasonably satisfactory to the Company in form and
amount or, in the case of any such mutilation, upon surrender of such warrant
for cancellation at the office of the Company maintained pursuant to Section
10.2(a) hereof, the Company at its expense will execute and deliver, in lieu
thereof, a new Warrant of like tenor and dated the date hereof.
11. DEFINITIONS. As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:
Additional Shares of Common Stock: All shares (including treasury shares)
of Common Stock issued or sold (or, pursuant to Section 2.3 or 2.4 hereof,
deemed to be issued) by the Company after the date hereof, whether or not
subsequently reacquired or retired by the Company, other than the shares of
Common Stock issued upon the exercise of Warrants.
Business Day: Any day other than a Saturday or a Sunday or a day on which
commercial banking institutions in New York, New York or Newark, Delaware are
authorized by law to be closed. Any reference to "days" (unless Business Days
are specified) shall mean calendar days.
Change in Control: A Change in Control shall be deemed to occur if:
(i) any "person" as defined in Section 3(a)(9) of the Exchange
Act, and as used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) of the
Exchange Act but excluding the Company and any subsidiary and
any employee benefit plan sponsored or maintained by the
Company or any subsidiary (including any trustee of such plan
acting as trustee), directly or indirectly, becomes the
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of securities of the Company representing at
least 40% of the combined voting power of the Company's
then-outstanding securities;
(ii) the stockholders of the Company approve a merger,
consolidation, recapitalization, or reorganization of the
Company, or a reverse stock split of any class of voting
securities of the Company, or the consummation of any such
transaction if stockholder approval is not obtained, other
than any such transaction which would result in at least 60%
of the total voting power represented by the voting securities
of the Company or the surviving entity outstanding immediately
after such transaction being beneficially owned by persons who
together beneficially owned at least 80% of the combined
voting power of the voting securities of the Company
outstanding immediately prior to such transaction; provided
that, for purposes of this paragraph (ii), such continuity of
ownership (and preservation of relative voting power) shall be
deemed satisfied if the failure to meet such 60% threshold is
due solely to the acquisition of voting securities by an
employee benefit plan of the Company or such surviving entity
or of any subsidiary of the Company or such surviving entity;
(iii) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of its
assets (or any transaction having a similar effect); or
(iv) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors
of the Company, together with any new director (other than a
director designated by a person who has entered into an
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agreement with the Company to effect a transaction described
in paragraph (i), (ii), or (iii) hereof) whose election by the
Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for
any reason to constitute at least a majority of the Board of
Directors."
Commission: The Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.
Common Stock: As defined in the introduction to this Warrant, such term to
include any stock into which such Common Stock shall have been changed or any
stock resulting from any reclassification of such Common Stock, and all other
stock of any class or classes (however designated) of the Company the holders of
which have the right, without limitation as to amount, either to all or to a
share of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference.
Company: As defined in the introduction to this Warrant, such term to
include any corporation which shall succeed to or assume the obligations of the
Company hereunder in compliance with Section 3 hereof.
Convertible Securities: Any evidences of indebtedness, shares of stock
(other than Common Stock) or other securities directly or indirectly convertible
into or exchangeable for Additional Shares of Common Stock.
Current Market Price: On any date specified herein, the average daily
Market Price during the period of the most recent 20 days, ending on such date,
on which the national securities exchanges were open for trading, except that if
no class of the Common Stock is then listed or admitted to trading on any
national securities exchange or quoted in the over-the-counter market, the
Current Market Price shall be the Market Price on such date.
Exchange Act: The Securities Exchange Act of 1934, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
Expiration Date: As defined in the introduction to this Warrant.
Market Price: On any date specified herein, the amount per share of Common
Stock equal to (a) the last sale price of Common Stock, regular way, on such
date or, if no such sale takes place on such date, the average of the closing
bid and asked prices thereof on such date, in each case as officially reported
on the principal national securities exchange on which Common Stock is then
listed or admitted to trading, or (b) if Common Stock is not then listed or
admitted to trading on any national securities exchange but is designated as a
national market system security by the NASD, the last trading price of Common
Stock on such date, or (c) if there shall have been no trading on such date or
if Common Stock is not so designated, the average of the closing bid and asked
prices of Common Stock on such date as shown by the NASD automated quotation
system, or (d) if Common Stock is not then listed or admitted to trading on any
national exchange or quoted in the over-the-counter market, the fair value
thereof determined in good faith by the Board of Directors of the Company as of
a date which is within 15 days of the date as of which the determination is to
be made; provided, however, that notwithstanding the foregoing, in the case of
the issuance of Additional Shares of Common Stock to a third party in an arm's
length transaction, such price shall be the price at which such shares are
issued.
NASD: The National Association of Securities Dealers, Inc.
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Options: Rights, options or warrants to subscribe for, purchase or
otherwise acquire either Additional Shares of Common Stock or Convertible
Securities.
Other Securities: Any stock (other than Common Stock) and other securities
of the Company or any other person (corporate or otherwise) which the holders of
the Warrants at any time shall be entitled to receive, or shall have received,
upon the exercise of the Warrants, in lieu of or in addition to Common Stock, or
which at any time shall be issuable or shall have been issued in exchange for or
in replacement of Common Stock or Other Securities pursuant to Section 3 hereof
or otherwise.
Person: A corporation, an association, a partnership, an organization, a
business, an individual, a government or political subdivision thereof or a
governmental agency.
Purchasers: As defined in the introduction to this Warrant.
Register, Registered, and Registration: A registration effected by
preparing and filing a registration statement or similar document in compliance
with the Securities act, and the automatic effectiveness or the declaration or
ordering of effectiveness of such registration statement or document.
Restricted Securities: All of the following: (a) any Warrants bearing the
applicable legend or legends referred to in Section 7.1 hereof, (b) any shares
of Common Stock (or Other Securities) which have been issued upon the exercise
of Warrants and which are evidenced by a certificate or certificates bearing the
applicable legend or legends referred to in such Section, (c) unless the context
otherwise requires, any shares of Common Stock (or Other Securities) which are
at the time issuable upon the exercise of Warrants and which, when so issued,
will be evidenced by a certificate or certificates bearing the applicable legend
or legends referred to in such Section.
Securities Act: The Securities Act of 1933, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time.
Warrant Price: As defined in Section 2.1 hereof.
Warrants: This Warrant, together with all other warrants initially issued
as of October 31, 1991 to the holders of the Company's Subordinated Debentures,
originally due January 1, 1998, in connection with such holders entering into a
modification agreement with the Company with respect to reducing the principal
amount of, and accrued interest on, the Subordinated Debentures, which
Debentures are no longer outstanding as of the date of this Amended and Restated
Warrant.
12. REMEDIES. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company in
the performance of or compliance with any of the terms of this Warrant are not
and will not be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein by an injunction against a violation of any of
the terms hereof or otherwise.
13. NO RIGHTS OR LIABILITIES AS STOCKHOLDER. Nothing contained in this Warrant
shall be construed as conferring upon the holder hereof of any rights as a
stockholder of the Company or as imposing any obligation on such holder to
purchase any securities or as imposing any liabilities on such holder as a
stockholder of the Company, whether such obligation or liabilities are asserted
by the Company or by creditors of the Company.
14. NOTICES. Any notice or other communication in connection with this Warrant
shall be deemed to be delivered if in writing (or in the form of a telex or
telecopy) addressed as hereinafter provided and if either (x) actually delivered
at said address (evidenced in the case of a telex by receipt of the correct
answerback and evidenced in the case of a telecopy by a telecopy back to the
sender) or (y) in the case of a letter, three
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Business days shall have elapsed after the same shall have been deposited in the
United States mails, postage prepaid and registered or certified:
(a) if to any holder, to the address set forth in the register
kept at the office of the Company maintained pursuant to
Section 10.2(a) hereof; and
(b) if to the Company, to the attention of its Treasurer at
its office maintained pursuant to Section 10.2(a) hereof,
provided, however, that the exercise of any Warrant shall be
effective in the manner provided in Section 1 hereof.
15. MISCELLANEOUS. Each reference in the Warrant to "this Agreement,"
"hereunder," "hereof," "herein," or words of like import referring to the
Warrant, shall mean and be a reference to the Warrant. This Warrant and any term
hereof may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of such change, waiver,
discharge or termination is sought. This Warrant shall be construed and enforced
in accordance with and governed by the laws of the State of Delaware. The
section headings in this Warrant are for purposes of convenience only and shall
not constitute a part hereof.
AUTOTOTE CORPORATION
By:___________________________
Martin E. Schloss
Vice President & Secretary
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PURCHASE FORM
(To be executed only upon exercise of Warrant)
To Autotote Corporation
The undersigned registered holder of the within Warrant hereby irrevocably
exercises such Warrant for, and purchases thereunder, ______________(1) shares
of the Common Stock and herewith makes payment:
Option 1
of $______________ therefor, or
Option 2
by cancellation of a number of Warrant Shares having a Current
Market Price equal to the Warrant Price of the Warrant Shares being
purchased,
and requests that the shares of Common Stock be issued to:
Registration Instructions
Name: _________________________________________________
Address: _________________________________________________
Date:____________ ____________________________________________
(Signature)(must conform in all respects to
name of holder as specified on the face
of Warrant)
____________________________________________
(Street Address)
____________________________________________
(City) (State) (Zip Code)
- --------
(1) Insert the number of shares called for on the face of this Warrant (or, in
the case of a partial exercise, the portion thereof as to which this Warrant is
being exercised), in either case without making any adjustment for Additional
Shares of Common Stock or any other stock or other securities or property or
cash which, pursuant to the adjustment provisions of this Warrant, may be
delivered upon exercise. In the case of a partial exercise, a new Warrant or
Warrants will be issued and delivered, representing the unexercised portion of
the Warrant, to the holder surrendering the Warrant.
ASSIGNMENT FORM
(To be executed only upon transfer of Warrant)
FOR VALUE RECEIVED, the undersigned registered holder of the within
Warrant hereby sells, assigns and transfers unto:
Name: _________________________________________________
Address: _________________________________________________
the right represented by such Warrant to purchase ___________(1) shares of
Common Stock of Autotote Corporation to which such Warrant relates, and appoints
______________ Attorney to make such transfer on the books of Autotote
Corporation maintained for such purpose, with full power of substitution in the
premises.
Date:____________ ____________________________________________
(Signature)(must conform in all respects to
name of holder as specified on the face
of Warrant)
____________________________________________
(Street Address)
____________________________________________
(City) (State) (Zip Code)
Signed in the presence of:
________________________________
- ----------
(1) Insert the number of shares called for on the face of this Warrant (or, in
the case of a partial assignment, the portion thereof as to which this Warrant
is being assigned), in either case without making any adjustment for Additional
Shares of Common Stock or any other stock or other securities or property or
cash which, pursuant to the adjustment provisions of this Warrant, may be
delivered upon exercise. In the case of a partial assignment, a new Warrant or
Warrants will be issued and delivered, representing the unassigned portion of
the Warrant, to the holder surrendering the Warrant.