________________________________
Warrant Agreement
Dated As of February 26, 1998
among
Aladdin Gaming Enterprises, Inc.,
Aladdin Gaming Holdings, Inc.
and
State Street Bank and Trust Company,
as Warrant Agent
__________________________________
WARRANT AGREEMENT ("Agreement"), dated as of February 26, 1998, by and
between Aladdin Gaming Enterprises, Inc. a Nevada corporation ("Enterprises"),
Aladdin Gaming Holdings, LLC, a Nevada limited-liability company ("Holdings"),
and State Street Bank and Trust Company, as warrant agent (the "Warrant Agent").
WHEREAS, Aladdin Gaming Holdings, LLC, a Nevada limited-liability
company ("Holdings"), Aladdin Capital Corp., a Nevada corporation ("Capital"
and, together with Enterprises and Holdings, the "Aladdin Parties"),
Enterprises, Aladdin Holdings, LLC, a Delaware limited liability company, the
Trust Under Article Sixth u/w/o Sigmund Sommer and London Clubs International,
plc, a United Kingdom public limited company under the laws of England and
Wales, have entered into a Purchase Agreement (the "Purchase Agreement") dated
February 18, 1998, with Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Credit Suisse First Boston Corporation, CIBC Oppenheimer Corp. and Scotia
Capital Markets (USA) Inc. (collectively, the "Initial Purchasers") under which
the Aladdin Parties have agreed to sell to the Initial Purchasers 221,500 Units
(the "Units"), each Unit consisting of (i) $1,000 principal amount at maturity
of 13 1/2% Senior Discount Notes due 2010 of Holdings and Capital (the "Notes")
to be issued under an Indenture, dated as of the date hereof (the "Indenture"),
among Holdings, Capital and State Street Bank and Trust Company, as trustee (the
"Trustee") and (ii) 10 Warrants (the "Warrants") to purchase 10 shares (the
"Warrant Shares") of Class B non-voting Common Stock, no par value, of
Enterprises (the "Class B Stock");
WHEREAS, Enterprises desires the Warrant Agent to assist Enterprises in
connection with the issuance, exchange, cancellation, replacement and exercise
of the Warrants, and in this Agreement wishes to set forth, among other things,
the terms and conditions on which the Warrants may be issued, exchanged,
canceled, replaced and exercised;
WHEREAS, the holders of outstanding membership interests of Holdings
desire for Enterprises to have the benefit of certain anti-dilution protections;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1. Appointment of Warrant Agent. Enterprises hereby appoints
the Warrant Agent to act as agent for Enterprises in accordance with the
instructions set forth hereinafter in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 2. Warrant Certificates. The certificates evidencing the
Warrants (the "Warrant Certificates") shall be in registered form only and shall
be substantially in the form set forth in Exhibit A attached hereto. Each
Warrant Certificate shall, prior to the Separation Date (as defined herein),
bear the legend set forth in Exhibit B attached hereto.
All of the Warrants initially will be issued in global form (the
"Global Warrant"), substantially in the form of Exhibit A attached hereto
(including the text referred to in footnote 1 thereto).
Each Global Warrant shall represent such of the outstanding Warrants as
shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Warrants from time to time endorsed thereon and
that the aggregate amount of outstanding Warrants represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges and
exercises. Any endorsement of a Global Warrant to reflect the amount of any
increase or decrease in the amount of outstanding Warrants represented thereby
shall be made by the Warrant Agent or the depositary with respect to the Global
Warrants (the "Depositary") in accordance with instructions given by the holder
thereof. Enterprises initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Warrants in global form.
Subject to Section 5(n), beneficial owners of interests in a Global
Warrant may receive Warrants in definitive form (the "Definitive Warrants"),
substantially in the form of Exhibit A attached hereto (but without the text
referred to in footnote 1 thereto) in the name of such beneficial owners in
accordance with the procedures of the Warrant Agent and the Depositary. Subject
to Section 5(n), in connection with the execution and delivery of such
Definitive Warrants, the Warrant Agent shall reflect on its books and records a
decrease in the amount of the Warrants represented by the relevant Global
Warrant equal to the amount of such Definitive Warrants and Enterprises shall
execute and the Warrant Agent shall countersign and deliver one or more
Definitive Warrants in an aggregate amount equal to the amount of such decrease.
SECTION 3. Execution of Warrant Certificates. (a) Warrant Certificates
shall be signed on behalf of Enterprises by its Chairman of the Board, Chief
Executive Officer, its President or a Vice President and by its Secretary or an
Assistant Secretary. Each such signature upon the Warrant Certificates may be in
the form of a facsimile signature of the present or any future Chairman of the
Board, Chief Executive Officer, President, Vice President, Secretary or
Assistant Secretary and may be imprinted or otherwise reproduced on the Warrant
Certificates and for that purpose Enterprises may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, Chief
Executive Officer, President, Vice President, Secretary or Assistant Secretary,
notwithstanding the fact that at the time the Warrant Certificates shall be
countersigned and delivered or disposed of such person shall have ceased to hold
such office. The seal of Enterprises may be in the form of a facsimile thereof
and may be impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates.
(b) In case any officer of Enterprises who shall have signed
any of the Warrant Certificates shall cease to be such officer before the
Warrant Certificates so signed shall have been countersigned by the Warrant
Agent, or disposed of by Enterprises, such Warrant Certificates nevertheless may
be countersigned and delivered or disposed of as though such person had not
ceased to be such officer of Enterprises; and any Warrant Certificate may be
signed on behalf of Enterprises by any person who, at the actual date of the
execution of such Warrant Certificate, shall be a proper officer of Enterprises
to sign such Warrant Certificate, although at the date of the execution of this
Warrant Agreement any such person was not such officer.
(c) Warrant Certificates shall be dated the date of
countersignature by the Warrant Agent.
SECTION 4. Registration and Countersignature. (a) The Warrant Agent, on
behalf of Enterprises, shall number and register the Warrant Certificates in a
register as they are issued by Enterprises.
(b) In the case of offers and sales of Warrants outside the
United States without registration under the Securities Act, Enterprises shall,
and the Warrant Agent, on behalf of Enterprises, shall refuse register any
transfer of the Warrants not made in accordance with the provisions of
Regulation S under the Securities Act; provided, however, that if foreign law
prevents Enterprises from refusing to register securities transfers, other
reasonable procedures (such as a legend to the effect that transfer is
prohibited except in accordance with the provisions of Regulation S under the
Securities Act) shall be implemented to prevent any transfer of the securities
not made in accordance with the provisions of Regulation S under the Securities
Act.
(c) Warrant Certificates shall be manually countersigned by
the Warrant Agent and shall not be valid for any purpose unless so
countersigned. The Warrant Agent shall, upon written instructions of the
Chairman of the Board, the Chief Executive Officer, the President, a Vice
President, the Treasurer or the Controller of Enterprises, initially
countersign, issue and deliver Warrant Certificates entitling the holders
thereof to purchase not more than the number of Warrant Shares referred to above
in the first recital hereof and shall countersign and deliver Warrant
Certificates as otherwise provided in this Agreement.
(d) Enterprises and the Warrant Agent may deem and treat a
registered holder of a Warrant Certificate as the absolute owner thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone) for all purposes, and neither Enterprises nor the Warrant Agent shall be
affected by any notice to the contrary.
SECTION 5. Registration of Transfers and Exchanges. (a) Transfer and
Exchange of Global Warrants. A Global Warrant may not be transferred as a whole
except by the Depositary to a nominee of the Depositary, by a nominee of the
Depositary to the Depositary or to another nominee of the Depositary, by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary. A Global Warrant will be exchanged by Enterprises for
Definitive Warrants if (i) Enterprises delivers to the Warrant Agent notice from
the Depositary that it is unwilling or unable to continue to act as Depositary
or that it is no longer a clearing agency registered under the Securities
Exchange Act of 1934, as amended, and, in either case, a successor Depositary is
not appointed by Enterprises within 120 days after the date of such notice from
the Depositary or (ii) Enterprises in its sole discretion determines that a
Global Warrant (in whole but not in part) should be exchanged for Definitive
Warrants and delivers a written notice to such effect to the Warrant Agent;
provided that in no event shall a Regulation S Global Warrant be exchanged by
Enterprises for Definitive Warrants prior to (x) the expiration of the
Restricted Period (as defined herein) and (y) the receipt by the Warrant Agent
of any certificates required pursuant to Rule 903 under the Securities Act. Upon
the occurrence of either of the preceding events in (i) or (ii) above,
Definitive Warrants shall be issued in such names as
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the Depositary shall
identify as beneficial owners to the Warrant Agent. Global Warrants also may be
exchanged or replaced, in whole or in part. Every Warrant authenticated and
delivered in exchange for, or in lieu of, a Global Warrant or any portion
thereof, pursuant to this Section 5, shall be authenticated and delivered in the
form of, and shall be, a Global Warrant. A Global Warrant may not be exchanged
for another Warrant other than as provided in this Section 5(a); however,
beneficial interests in a Global Warrant may be transferred and exchanged as
provided in Section 5(b) or (c) hereof.
(b) Transfer and Exchange of Beneficial Interests in the
Global Warrants. The transfer and exchange of beneficial interests in the Global
Warrants shall be effected through the Depositary, in accordance with the
provisions of this Warrant Agreement and the rules and procedures of the
Depositary, Morgan Guaranty Trust Company of New York, Brussels office, as
operator of the Euroclear system ("Euroclear"), and Cedel Bank, SA ("Cedel")
that apply to such transfer or exchange (the "Applicable Procedures").
Beneficial interests in a Global Warrant bearing the Private Placement Legend
(as defined herein) (a "Restricted Global Warrant") shall be subject to
restrictions on transfer comparable to those set forth herein to the extent
required by the Securities Act. Transfers of beneficial interests in the Global
Warrants also shall require compliance with either subparagraph (i) or (ii)
below, as applicable, as well as one or more of the other following
subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Warrant.
Beneficial interests in any Restricted Global Warrant may be
transferred to any individual, corporation, partnership,
limited-liability company or partnership, joint venture,
association, joint-stock company, trust, unincorporated
organization, government or any agency or political
subdivision thereof or any other entity (each, a "Person") who
takes delivery thereof in the form of a beneficial interest in
the same Restricted Global Warrant in accordance with the
transfer restrictions set forth in the legend set forth in
Section 5(f) hereof (the "Private Placement Legend");
provided, however, that prior to the expiration of the 1-year
restricted period as defined in Regulation S under the
Securities Act (the "Restricted Period"), transfers of
beneficial interests in the Global Note bearing the Private
Placement Legend and deposited with or on behalf of the
Depositary and registered in the name of the Depositary or its
nominee, issued in an amount equal to the outstanding Warrants
initially sold in reliance on Rule 903 of Regulation S (the
"Regulation S Global Warrant") may not be made to a U.S.
person (as defined in Rule 902(o) under the Securities Act) or
for the account or benefit of a U.S. person (other than the
Initial Purchaser). Beneficial interests in any Unrestricted
Global Warrant (defined for purposes hereof as any Global
Warrant in the form of Exhibit A hereto that bears the legend
set forth in Section 2 hereof and that has the
"Schedule of Exchanges of Global Warrants" attached thereto,
and that is deposited with or on behalf of the Depositary,
representing Warrants that do not bear the Private Placement
Legend) may be transferred to Persons who take delivery
thereof in the form of a beneficial
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interest in an Unrestricted Global Warrant. No written orders
or instructions shall be required to be delivered to the
Warrant Agent to effect the transfers described in this
Section 5(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Warrant. In connection with all transfers and exchanges
of beneficial interests that are not subject to Section
5(b)(i) above, the transferor of such beneficial interest must
deliver to the Warrant Agent either (A)(1) a written order
from a Person who has an account with the Depositary,
Euroclear or Cedel (a "Participant") or with a Person who has
an account with a Participant (an "Indirect Participant")
given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Warrant in an
amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the
Participant account to be credited with such increase or
(B)(1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be
issued a Definitive Warrant in an amount equal to the
beneficial interest to be transferred or exchanged and (2)
instructions given by the Depositary to the Warrant Agent
containing information regarding the Person in whose name such
Definitive Warrant shall be registered to effect the transfer
or exchange referred to in (1) above; provided that in no
event shall Definitive Warrants be issued upon the transfer or
exchange of beneficial interests in the Regulation S Global
Warrant prior to (x) the expiration of the Restricted Period
and (y) the receipt by the Warrant Agent of any certificates
required pursuant to Rule 903 under the Securities Act. Upon
satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Global Warrants contained
in this Warrant Agreement, the Warrant Agent shall adjust the
amount of the relevant Global Warrant(s) pursuant to Section
5(g) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Warrant. A beneficial interest in any Restricted Global
Warrant may be transferred to a Person who takes delivery
thereof in the form of a beneficial interest in another
Restricted Global Warrant if the transfer complies with the
requirements of Section 5(b)(ii) above and the Warrant Agent
receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in a 144A Global Warrant (defined
for purposes hereof as any Global Warrant in the form
of Exhibit A hereto that bears the Private Placement
Legend and the legend set forth in Section 2 hereof
and that is deposited with or on behalf of, and
registered in
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the name of, the Depositary or its nominee that will
be issued in an amount equal to the amount of
Warrants sold in reliance on Rule 144A under the
Securities Act), then the transferor must deliver a
certificate in the form of Exhibit C hereto,
including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of
a beneficial interest in the Regulation S Global
Warrant, then the transferor must deliver a
certificate in the form of Exhibit C hereto,
including the certifications in item (2)
thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Warrant
(defined for purposes hereof as any Global Warrant in
the form of Exhibit A hereto that bears the Private
Placement Legend and the --------- legend set forth
in Section 2 hereof and that is deposited with or on
behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in an
amount equal to the amount of Warrants sold to
institutional "accredited investors" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act) ("Institutional Accredited
Investors")), then the transferor must deliver a
certificate in the form of Exhibit C hereto,
including the certifications and certificates and
Opinion of --------- Counsel required by item (3)
thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Warrant for Beneficial Interests in the Unrestricted
Global Warrant. A beneficial interest in any Restricted Global
Warrant may be exchanged by any holder thereof for a
beneficial interest in an Unrestricted Global Warrant or
transferred to a Person who takes delivery thereof in the form
of a beneficial interest in an Unrestricted Global Warrant if
the exchange or transfer complies with the requirements of
Section 5(b)(ii) above and:
(A) such transfer is effected pursuant to a Registration
Statement in accordance with the Warrant Registration
Rights Agreement; or
(B) the Warrant Agent receives the following:
(1) if the holder of such beneficial interest in
a Restricted Global Warrant proposes to
exchange such beneficial interest for a
beneficial interest in an Unrestricted
Global Warrant, a certificate from such
holder in the form of Exhibit D hereto,
including the certifications in item (l)(a)
thereof; or
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(2) if the holder of such beneficial interest in
a Restricted Global Warrant proposes to
transfer such beneficial interest to a
Person who shall take delivery thereof in
the form of a beneficial interest in an
Unrestricted Global Warrant, a certificate
from such holder in the form of Exhibit C
hereto, including the certifications in item
(4) thereof;
and, in each such case set forth in this subparagraph
(B), if the Warrant Agent or Enterprises so requests
or if the Applicable Procedures so require, an
opinion of counsel from legal counsel reasonably
acceptable to the Warrant Agent or Enterprises, as
applicable, (an "Opinion of Counsel") to the effect
that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on
transfer contained herein and in the Private
Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to
subparagraph (B) above at a time when an Unrestricted
Global Warrant has not yet been issued, Enterprises
shall issue and, upon receipt of written instructions
from Enterprises, the Warrant Agent shall countersign
one or more Unrestricted Global Warrants in an
aggregate amount equal to the aggregate amount of
beneficial interests transferred pursuant to
subparagraph (B) above.
Beneficial interests in an Unrestricted Global
Warrant cannot be exchanged for, or transferred to
Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Warrant.
(c) Transfer or Exchange of Beneficial Interests for
Definitive Warrants.
(i) Beneficial Interests in Restricted Global Warrants to
Restricted Definitive Warrants. If any holder of a
beneficial interest in a Restricted Global Warrant
proposes to exchange such beneficial interest for a
Restricted Definitive Warrant or to transfer such
beneficial interest to a Person who takes delivery
thereof in the form of a Restricted Definitive
Warrant, then, upon receipt by the Warrant Agent of
the following documentation:
(A) if the holder of such beneficial interest in
a Restricted Global Warrant proposes to
exchange such beneficial interest for a
Restricted Definitive Warrant, a certificate
from such holder in the form of Exhibit D
hereto, including the certifications in item
(2)(a) thereof;
(B) if such beneficial interest is being
transferred to a "qualified institutional
buyer" as defined in Rule 144A under the
Securities Act (a "QIB") in accordance with
Rule 144A under the Securities
7
Act,a certificate to the effect set forth in
Exhibit C hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being
transferred to a person who is not a U.S.
person (a "Non-U.S. Person") in an offshore
transaction in accordance with Rule 903 or
Rule 904 under the Securities Act, a
certificate to the effect set forth in
Exhibit C hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being
transferred pursuant to an exemption from
the registration requirements of the
Securities Act in accordance with Rule 144
under the Securities Act, a certificate to
the effect set forth in Exhibit C hereto,
including the certifications in item (3)(a)
thereof;
(E) if such beneficial interest is being
transferred to an Institutional Accredited
Investor in reliance on an exemption from
the registration requirements of the
Securities Act other than those listed in
subparagraphs (B) through (D) above, a
certificate to the effect set forth in
Exhibit C hereto, including the
certifications, certificates and Opinion of
Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being
transferred to Enterprises or any of its
subsidiaries, a certificate to the effect
set forth in Exhibit C hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being
transferred pursuant to an effective
registration statement under the Securities
Act, a certificate to the effect set forth
in Exhibit C hereto, including the
certifications in item (3)(c) thereof,
the Warrant Agent shall cause the aggregate amount of
the applicable Global Warrant to be reduced
accordingly pursuant to Section 5(g) hereof, and
Enterprises shall execute and the Warrant Agent shall
countersign and deliver to the Person designated in
the instructions a Definitive Warrant in the
appropriate amount. Any Definitive Warrant issued in
exchange for a beneficial interest in a Restricted
Global Warrant pursuant to this Section 5(c) shall be
registered in such name or names and in such
authorized denomination or denominations as the
holder of such beneficial interest shall instruct the
Warrant Agent through instructions from the
Depositary and the Participant or Indirect
Participant. The Warrant Agent shall deliver such
Definitive Warrants to the Persons in whose names
such Warrants are so registered. Any Definitive
Warrant issued in exchange for a beneficial interest
in a Restricted Global Warrant pursuant to this
Section 5(c)(i) shall bear the
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Private Placement Legend and shall be subject to all
restrictions on transfer contained therein.
Notwithstanding Sections 5(c)(i)(A) and (C)
hereof, a beneficial interest in the Regulation S
Global Warrant may not be exchanged for a Definitive
Warrant or transferred to a Person who takes delivery
thereof in the form of a Definitive Warrant prior to
(x) the expiration of the Restricted Period and (y)
the receipt by the Warrant Agent of any certificates
required pursuant to Rule 903 under the Securities
Act, except in the case of a transfer pursuant to an
exemption from the registration requirements of the
Securities Act other than Rule 903 or Rule 904.
(ii) Beneficial Interests in Restricted Global Warrants to
Unrestricted Definitive Warrants. A holder of a
beneficial interest in a Restricted Global Warrant
may exchange such beneficial interest for an
Unrestricted Definitive Warrant or may transfer such
beneficial interest to a Person who takes delivery
thereof in the form of an Unrestricted Definitive
Warrant only if:
(A) such transfer is effected pursuant to a
Registration Statement in accordance with
the Warrant Registration Rights Agreement;
or
(B) the Warrant Agent receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global
Warrant proposes to exchange such
beneficial interest for a Definitive
Warrant that does not bear the
Private Placement Legend, a
certificate from such holder in the
form of Exhibit D hereto, including
the certifications in item (l)(b)
thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global
Warrant proposes to transfer such
beneficial interest to a Person who
shall take delivery thereof in the
form of a Definitive Warrant that
does not bear the Private Placement
Legend, a certificate from such
holder in the form of Exhibit C
hereto, including the certifications
in item (4) thereof;
and, in each such case set forth in this subparagraph
(B), if the Warrant Agent or Enterprises so requests
or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to
the Warrant Agent or Enterprises, as applicable, to
the effect that such exchange or transfer is in
compliance with the Securities Act and that the
restrictions on transfer contained herein
9
and in the Private Placement Legend are no longer
required in order to maintain compliance with the
Securities Act.
(iii) Beneficial Interests in Unrestricted Global Warrants
to Unrestricted Definitive Warrants. If any holder of
a beneficial interest in an Unrestricted Global
Warrant proposes to exchange such beneficial interest
for a Definitive Warrant or to transfer such
beneficial interest to a Person who takes delivery
thereof in the form of a Definitive Warrant, then,
upon satisfaction of the conditions set forth in
Section 5(b)(ii) hereof, the Warrant Agent shall
cause the aggregate amount of the applicable Global
Warrant to be reduced accordingly pursuant to Section
5(g) hereof, and Enterprises shall execute and the
Warrant Agent shall countersign and deliver to the
Person designated in the instructions a Definitive
Warrant in the appropriate amount. Any Definitive
Warrant issued in exchange for a beneficial interest
pursuant to this Section 5(c)(iii) shall be
registered in such name or names and in such
authorized denomination or denominations as the
holder of such beneficial interest shall instruct the
Warrant Agent through instructions from the
Depositary and the Participant or Indirect
Participant. The Warrant Agent shall deliver such
Definitive Warrants to the Persons in whose names
such Warrants are so registered. Any Definitive
Warrant issued in exchange for a beneficial interest
pursuant to this Section 5(c)(iii) shall not bear the
Private Placement Legend.
(d) Transfer and Exchange of Definitive Warrants for
Beneficial Interests.
(i) Restricted Definitive Warrants to Beneficial
Interests in Restricted Global Warrants. If any
holder of a Restricted Definitive Warrant proposes to
exchange such Warrant for a beneficial interest in a
Restricted Global Warrant or to transfer such
Restricted Definitive Warrants to a Person who takes
delivery thereof in the form of a beneficial interest
in a Restricted Global Warrant, then, upon receipt by
the Warrant Agent of the following documentation:
(A) if the holder of such Restricted Definitive
Warrant proposes to exchange such Warrant
for a beneficial interest in a Restricted
Global Warrant, a certificate from such
holder in the form of Exhibit D hereto,
including the certifications in item (2)(b)
thereof;
(B) if such Restricted Definitive Warrant is
being transferred to a QIB in accordance
with Rule 144A under the Securities Act, a
certificate to the effect set forth in
Exhibit C hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Warrant is
being transferred to a Non-U.S. person in an
offshore transaction in accordance with
10
Rule 903 or Rule 904 under the Securities
Act, a certificate to the effect set forth
in Exhibit C hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Warrant is
being transferred pursuant to an exemption
from the registration requirements of the
Securities Act in accordance with Rule 144
under the Securities Act, a certificate to
the effect set forth in Exhibit C hereto,
including the certifications in item (3)(a)
thereof;
(E) if such Restricted Definitive Warrant is
being transferred to an Institutional
Accredited Investor in reliance on an
exemption from the registration requirements
of the Securities Act other than those
listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth
in Exhibit C hereto, including the
certifications, certificates and Opinion of
Counsel required by item (3) thereof, if
applicable;
(F) if such Restricted Definitive Warrant is
being transferred to Enterprises or any of
its subsidiaries, a certificate to the
effect set forth in Exhibit C hereto,
including the certifications in item (3)(b)
thereof; or
(G) if such Restricted Definitive Warrant is
being transferred pursuant to an effective
registration statement under the Securities
Act, a certificate to the effect set forth
in Exhibit C hereto, including the
certifications in item (3)(c) thereof,
the Warrant Agent shall cancel the Restricted
Definitive Warrant, increase or cause to be increased
the aggregate amount of, in the case of clause (A)
above, the appropriate Restricted Global Warrant, in
the case of clause (B) above, the 144A Global
Warrant, in the case of clause (C) above, the
Regulation S Global Warrant, and in all other cases,
the IAI Global Warrant.
(ii) Restricted Definitive Warrants to Beneficial
Interests in Unrestricted Global Warrants. A holder
of a Restricted Definitive Warrant may exchange such
Warrant for a beneficial interest in an Unrestricted
Global Warrant or transfer such Restricted Definitive
Warrant to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted
Global Warrant only if:
(A) such transfer is effected pursuant to a
Registration Statement in accordance with
the Warrant Registration Rights Agreement;
or
(B) the Warrant Agent receives the following:
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(1) if the holder of such Definitive
Warrants proposes to exchange such
Warrants for a beneficial interest
in the Unrestricted Global Warrant,
a certificate from such holder in
the form of Exhibit D hereto,
including the certifications in item
(l)(c) thereof; or
(2) if the holder of such Definitive
Warrants proposes to transfer such
Warrants to a Person who shall take
delivery thereof in the form of a
beneficial interest in the
Unrestricted Global Warrant, a
certificate from such holder in the
form of Exhibit C hereto, including
the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph
(B), if the Warrant Agent or Enterprises so requests
or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to
the Warrant Agent or Enterprises, as applicable, to
the effect that such exchange or transfer is in
compliance with the Securities Act and that the
restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 5(d)(ii), the Warrant
Agent shall cancel the Definitive Warrants and
increase or cause to be increased the aggregate
amount of the Unrestricted Global Warrant.
(iii) Unrestricted Definitive Warrants to Beneficial
Interests in Unrestricted Global Warrants. A holder
of an Unrestricted Definitive Warrant may exchange
such Warrant for a beneficial interest in an
Unrestricted Global Warrant or transfer such
Definitive Warrants to a Person who takes delivery
thereof in the form of a beneficial interest in an
Unrestricted Global Warrant at any time. Upon receipt
of a request for such an exchange or transfer, the
Warrant Agent shall cancel the applicable
Unrestricted Definitive Warrant and increase or cause
to be increased the aggregate amount of one of the
Unrestricted Global Warrants.
If any such exchange or transfer from a Definitive
Warrant to a beneficial interest is effected pursuant
to subparagraphs (ii) or (iii) above at a time when
an Unrestricted Global Warrant has not yet been
issued, Enterprises shall issue and, upon receipt of
written instructions from Enterprises, the Warrant
Agent shall countersign one or more Unrestricted
Global Warrants in an aggregate amount equal to the
amount of Definitive Warrants so transferred.
12
(e) Transfer and Exchange of Definitive Warrants for
Definitive Warrants. Upon request by a holder of Definitive Warrants and such
holder's compliance with the provisions of this Section 5(e), the Warrant Agent
shall register the transfer or exchange of Definitive Warrants. Prior to such
registration of transfer or exchange, the requesting holder shall present or
surrender to the Warrant Agent the Definitive Warrants duly endorsed or
accompanied by a written instruction of transfer in form satisfactory to the
Warrant Agent duly executed by such holder or by his attorney, duly authorized
in writing. In addition, the requesting holder shall provide any additional
certifications, documents and information, as applicable, required pursuant to
the following provisions of this Section 5(e).
(i) Restricted Definitive Warrants to Restricted
Definitive Warrants. Any Restricted Definitive
Warrant may be transferred to and registered in the
name of Persons who take delivery thereof in the form
of a Restricted Definitive Warrant if the Warrant
Agent receives the following:
(A) if the transfer will be made pursuant to
Rule 144A under the Securities Act, then the
transferor must deliver a certificate in the
form of Exhibit C hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to
Rule 903 or Rule 904, then the transferor
must deliver a certificate in the form of
Exhibit C hereto, including the
certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any
other exemption from the registration
requirements of the Securities Act, then the
transferor must deliver a certificate in the
form of Exhibit C hereto, including the
certifications, certificates and Opinion of
Counsel required by item (3) thereof, if
applicable.
(ii) Restricted Definitive Warrants to Unrestricted
Definitive Warrants. Any Restricted Definitive
Warrant may be exchanged by the holder thereof for an
Unrestricted Definitive Warrant or transferred to a
Person or Persons who take delivery thereof in the
form of an Unrestricted Definitive Warrant if:
(A) any such transfer is effected pursuant to a
Registration Statement in accordance with
the Warrant Registration Rights Agreement;
or
(B) the Warrant Agent receives the following:
(1) if the holder of such Restricted
Definitive Warrants proposes to exchange
such Warrants for an Unrestricted Definitive
Warrant, a certificate from such holder in
the form of Exhibit D hereto, including the
certifications in item (l)(d) thereof; or
13
(2) if the holder of such Restricted
Definitive Warrants proposes to transfer
such Warrants to a Person who shall take
delivery thereof in the form of an
Unrestricted Definitive Warrant, a
certificate from such holder in the form of
Exhibit C hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph
(B), if the Warrant Agent or Enterprises so requests,
an Opinion of Counsel in form reasonably acceptable
to the Warrant Agent or Enterprises, as applicable,
to the effect that such exchange or transfer is in
compliance with the Securities Act and that the
restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Warrants to Unrestricted
Definitive Warrants. A holder of Unrestricted
Definitive Warrants may transfer such Warrants to a
Person who takes delivery thereof in the form of an
Unrestricted Definitive Warrant.
Upon receipt of a request to register such a
transfer, the Warrant Agent shall register the
Unrestricted Definitive Warrants pursuant to the
instructions from the holder thereof.
(f) Legends. The following legend shall appear on the face of
all Global Warrants and Definitive Warrants issued under this Warrant Agreement
unless specifically stated otherwise in the applicable provisions of this
Warrant Agreement.
(i) Except as permitted by subparagraph (ii) below, each
Global Warrant and each Definitive Warrant (and all
Warrants issued in exchange therefor or substitution
thereof) shall bear the legend in substantially the
following form:
"THE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, REGISTRATION AS SET FORTH
BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A")), (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED
14
IN RULE 501(A) (1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) OR (C) IT IS A NON-U.S. PERSON AS
DEFINED IN RULE 904 UNDER THE SECURITIES ACT (2)
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY PRIOR TO THE DATE WHICH IS TWO YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH ENTERPRISES OR ANY AFFILIATE OF
ENTERPRISES WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF THIS SECURITY) ONLY (A) TO
ENTERPRISES, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A INSIDE THE
UNITED STATES, TO A PERSON IT REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR
THAT IS ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO ENTERPRISES' AND THE WARRANT AGENT'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I)
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (II) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
WARRANT AGENT."
(ii) Notwithstanding the foregoing, any Global Warrant or
Definitive Warrant issued pursuant to subparagraphs
(b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii),
15
(e)(ii) or (e)(iii) to this Section 5 and all
Warrants issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.
(g) Cancellation and/or Adjustment of Global Warrants. At such time as
all beneficial interests in a particular Global Warrant have been exchanged for
Definitive Warrants or a particular Global Warrant has been redeemed,
repurchased or canceled in whole and not in part, each such Global Warrant shall
be returned to or retained and canceled by the Warrant Agent in accordance with
Section 5(k). At any time prior to such cancellation, if any beneficial interest
in a Global Warrant is exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Warrant
or for Definitive Warrants, the amount of Warrants represented by such Global
Warrant shall be reduced accordingly and an adjustment shall be made on such
Global Warrant or on the schedule maintained by the Depositary in respect of
such Global Warrant for such purposes, in accordance with the rules and
procedures of the Depositary, or by the Depositary at the direction of the
Warrant Agent to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Warrant, such other Global
Warrant shall be increased accordingly and an adjustment shall be made on the
books and records of the Warrant Agent respecting such Global Warrant or by the
Depositary at the direction of the Warrant Agent to reflect such increase.
(h) Indemnification. Each holder of a Warrant Certificate
agrees to indemnify Enterprises and the Warrant Agent against any losses,
claims, liabilities, damages or expenses, whatsoever, that may result from the
transfer, exchange or assignment of such holder's Warrant Certificate in
violation of any provision of this Agreement and/or applicable law.
(i) Depositary. Members of, or participants in, the Depositary
("Agent Members") shall have no rights under this Agreement with respect to the
Global Warrants, as the case may be, held on their behalf by the Depositary or
the Warrant Agent as its custodian, and the Depositary may be treated by
Enterprises, the Warrant Agent and any agent of Enterprises or the Warrant Agent
as the absolute owner of such Global Warrants for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent Enterprises, the
Warrant Agent or any agent of Enterprises or the Warrant Agent, from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
holder of any Warrants.
(j) Notices. The Warrant Agent shall retain copies of all
letters, notices and other written communications received pursuant to this
Section 5. Enterprises shall have the right to inspect and make copies of all
such letters, notices or other written communications at any reasonable time
upon the giving of reasonable written notice to the Warrant Agent.
(k) Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered for registration of transfer, exchange or exercise of
the Warrants represented thereby shall, if surrendered to Enterprises, be
delivered to the Warrant Agent, and all Warrant Certificates
16
surrendered or so delivered to the Warrant Agent shall be promptly canceled by
the Warrant Agent and shall not be reissued by Enterprises and, except as
provided in this Section 5 in case of an exchange, Section 6 hereof in case of
the exercise of less than all the Warrants represented thereby or Section 8
hereof in case of a mutilated Warrant Certificate, no Warrant Certificate shall
be issued hereunder in lieu thereof. The Warrant Agent shall deliver to
Enterprises from time to time or otherwise dispose of such canceled Warrant
Certificates as Enterprises may direct in writing.
(l) Countersignature of New Certificates. The Warrant Agent is
hereby authorized to countersign, in accordance with the provisions of this
Section 5 and of Section 4 hereof, the new Warrant Certificates required
pursuant to the provisions of this Section 5.
(m) Charges. No service charge shall be made for registration
of transfer or exchange upon surrender of any Warrant Certificate at the office
of the Warrant Agent maintained for that purpose. Enterprises may require from
Warrant holders payment of a sum sufficient to cover all taxes and/or other
governmental charges (including, without limitation, documentary and stamp
taxes) that may be imposed in connection with any registration, transfer or
exchange of Warrant Certificates.
(n) Warrant Endorsement. Notwithstanding the foregoing
provisions of this Section 5, until Separated (as defined herein) each Warrant
will be held by the Trustee, as custodian for the registered holders of each
Note or Note in global form, and will be registered in the name of the
registered holder of such Note initially in the amount specified in writing to
the Warrant Agent by Enterprises. Such holder may, at any time, on or after the
Separation Date (as defined herein), at its option, by notice to the Trustee
elect to separate and/or separately transfer the Notes and the Warrants
represented by such Note or Note in global form containing a Warrant Endorsement
(as defined in the Indenture), in whole or in part, for a definitive Warrant
Certificate or Warrant Certificates or a beneficial interest in a Global Warrant
evidencing the underlying Warrants (in accordance with this Agreement) and for a
Note or Notes or a beneficial interest in a global Note of a like aggregate
principal amount at maturity of authorized denominations and not containing a
Warrant Endorsement in accordance with the Indenture (such surrender and
exchange being referred to herein as a "Separation" and the related Warrants
being referred to as "Separated"); provided that no delay or failure on the part
of the Trustee or the Warrant Agent to exchange such Warrant Certificate and
Note or Notes shall affect the Separation of the Notes and the Warrants or their
separate transferability. Prior to Separation, record ownership of the Warrants
will be evidenced by the certificates for Notes or a global Note registered in
the names of the holders of the Notes or global Notes, which certificates or
global Note will bear thereon a Warrant Endorsement substantially in the form
set forth in the Indenture, and the right to receive or exercise Warrants will
be transferable only in connection with the transfer of such Notes or a
beneficial interest in a global Note.
All Notes and global Notes containing a Warrant Endorsement presented
for Separation shall be duly endorsed by the registered holder or holders
thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney, and in the case of transfer, such signature shall be
medallion guaranteed by an institution which is a member of a Securities
17
Transfer Association recognized signature guarantee program. Upon notice from
the Trustee of a Separation, the Warrant Agent shall, with respect to Definitive
Warrants, deliver (or cause to be delivered) to such holder, legal
representative or authorized attorney the Warrant Certificate or Warrant
Certificates executed by Enterprises and countersigned by the Warrant Agent in
the name of such registered holder or holders or such transferee or transferees
or shall, with respect to (i) 144A Global Warrants, deliver (or cause to be
delivered) to the Depositary or its nominee a 144A Global Warrant, (ii)
Regulation S Global Warrants, deliver (or cause to be delivered) to the
Depositary or its nominee a Regulation S Global Warrant and (iii) IAI Global
Warrants, deliver (or cause to be delivered) to the Depositary or its nominee an
IAI Global Warrant, in each case, executed by Enterprises and countersigned by
the Warrant Agent in the name of the Depositary or its nominee for such
aggregate amount of Warrants (or, with respect to a Global Warrant, increasing
the amount of Warrants represented thereby in such amount) as shall equal one
Warrant for each $1,000 principal amount at maturity of Notes so exchanged for
Separation, bearing numbers or other distinguishing symbols not
contemporaneously outstanding, to the Person or Persons entitled thereto. Upon
registration of transfer or exchange of a Warrant Certificate, the Warrant Agent
shall countersign and deliver by certified mail a new Warrant Certificate to the
holders of the Notes so separated or the transferee or transferees thereof, as
the case may be.
SECTION 6. Separation, Terms and Exercise of Warrants. (a) The Notes
and the Warrants will not be separately transferable until the earliest of (i)
September 1, 1998, (ii) the date on which a registration statement with respect
to the Notes or a registration statement with respect to the Warrants and the
Warrant Shares is filed with the Commission under the Securities Act, (iii) the
occurrence of a Change of Control (as defined in the Indenture) or a sale or
recapitalization of Enterprises, Holdings or Aladdin Gaming, LLC, a Nevada
limited-liability company, occurs, (iv) 30 days after a Qualified Public
Offering (as defined in the Indenture) occurs, (v) the occurrence of an Event of
Default (as defined in the Indenture) or (vi) such earlier date as determined by
Merrill Lynch & Co. in its sole discretion (the date of the earliest occurrence
of an event specified in clauses (i) through (vi) is referred to herein as the
"Separation Date"), at which time such Warrants shall become separately
transferable. Subject to the terms of this Agreement, each Warrant holder shall
have the right, which may be exercised during the period commencing at the
opening of business on the Separation Date (the "Warrant Exercise Commencement
Date") and until 5:00 p.m., New York City time on March 1, 2010 (the "Warrant
Exercise Period") to receive from Enterprises upon payment of the exercise price
(the "Exercise Price") then in effect for each Warrant Share and subject to
other conditions to exercise the number of fully paid and nonassessable Warrant
Shares which the holder may at the time be entitled to receive on exercise of
such Warrants; provided that holders shall be able to exercise their Warrants
only if a registration statement relating to the Warrant Shares is then in
effect, or the exercise of such Warrants is exempt from the registration
requirements of the Securities Act, and such securities are qualified for sale
or exempt from qualification under the applicable securities laws of the states
in which the various holders of the Warrants or other Persons to whom it is
proposed that the Warrant Shares be issued on exercise of the Warrants reside.
Each holder of Warrants may exercise its right, during the Warrant Exercise
Period, to receive Warrant Shares when such holder makes a payment to
Enterprises in cash (or in the form of certified or official bank check payable
to the order of Enterprises) in an amount equal to the Exercise Price of the
Warrants being exercised by such holder. Each Initial Warrant not exercised
18
prior to 5:00 p.m., New York City time, on March 1, 2010 (the "Warrant
Expiration Date") shall lapse and become void and all rights thereunder and all
rights in respect thereof under this agreement shall cease as of such time. No
adjustments as to dividends will be made upon exercise of the Warrants.
Enterprises will give notice of expiration of the Warrants not less than 90 and
not more than 120 days prior to the Expiration Date to the registered holders of
the then outstanding Warrants and to the Warrant Agent. If Enterprises fails to
give such notice, the Warrants will not expire until 90 days after Enterprises
gives notice. In no event will holders of Warrants be entitled to any damages or
other remedy for Enterprises' failure to give such notice other than any such
extension.
(b) In order to exercise all or any of the Warrants
represented by a Warrant Certificate, (i) in the case of Definitive Warrants,
the holder thereof must surrender for exercise the Warrant Certificate to
Enterprises at the office of the Warrant Agent at its corporate trust office set
forth in Section 20 (which office shall be maintained in Boston) hereof, or the
affiliate office of the Warrant Agent (which office shall be maintained in New
York), (ii) in the case of a book-entry interest in a Global Warrant, the
exercising Agent Member whose name appears on a securities position listing of
the Depositary as the holder of such book-entry interest must comply with the
Depositary's procedures relating to the exercise of such book-entry interest in
such Global Warrant and (iii) in the case of both Global Warrants and Definitive
Warrants, the holder thereof or the Agent Member, as applicable, must deliver to
Enterprises at the office of the Warrant Agent the form of election to purchase
on the reverse thereof duly filled in and signed, which signature shall be
medallion guaranteed by an institution which is a member of a Securities
Transfer Association recognized signature guarantee program, and upon payment to
the Warrant Agent in New York for the account of Enterprises of the Exercise
Price, which is set forth in the form of Warrant Certificate attached hereto as
Exhibit A as adjusted as herein provided, for the number of Warrant Shares in
respect of which such Warrants are then exercised.
(c) Subject to the provisions of Section 7 hereof, upon
compliance with clause (b) above, Enterprises shall deliver or cause to be
delivered with all reasonable dispatch, to or upon the written order of the
holder and in such name or names as the Warrant holder or Agent Member may
designate, a certificate or certificates for the number of whole Warrant Shares
issuable upon the exercise of such Warrants or other securities or property to
which such holder is entitled hereunder, together with cash (if any) as provided
in Section 13 hereof; provided that if any consolidation, merger or lease or
sale of assets is proposed to be effected by Enterprises as described in Section
11(m) hereof, or a tender offer or an exchange offer for shares of Class B Stock
shall be made, upon such surrender of Warrants and payment of the Exercise Price
as aforesaid, Enterprises shall, as soon as possible, but in any event not later
than two business days thereafter, deliver or cause to be delivered the full
number of Warrant Shares issuable upon the exercise of such Warrants in the
manner described in this sentence or other securities or property to which such
holder is entitled hereunder, together with cash as provided in Section 13
hereof (if any). Such certificate or certificates shall be deemed to have been
issued and any Person so designated to be named therein shall be deemed to have
become a holder of record of such Warrant Shares as of the date of the surrender
of such Warrants and payment of the Exercise Price.
19
(d) The Warrants shall be exercisable, at the election of the
holders thereof, either in full or from time to time in part. If less than all
the Warrants represented by a Definitive Warrant are exercised, such Definitive
Warrant shall be surrendered and a new Definitive Warrant of the same tenor and
for the number of Warrants which were not exercised shall be executed by
Enterprises and delivered to the Warrant Agent and the Warrant Agent shall
countersign the new Definitive Warrant, registered in such name or names as may
be directed in writing by the holder, and shall deliver the new Definitive
Warrant to the Person or Persons entitled to receive the same. The Warrant Agent
shall make such notations on Schedule A to each Global Warrant as are required
to reflect any change in the number of Warrants represented by such Global
Warrant resulting from any exercise in accordance with the terms hereof.
(e) All Warrant Certificates surrendered upon exercise of
Warrants shall be canceled by the Warrant Agent. Such canceled Warrant
Certificates shall then be disposed of by the Warrant Agent in a manner
satisfactory to Enterprises. The Warrant Agent shall account promptly to
Enterprises with respect to Warrants exercised and concurrently pay to
Enterprises all moneys received by the Warrant Agent for the purchase of the
Warrant Shares through the exercise of such Warrants.
(f) The Warrant Agent shall keep copies of this Agreement and
any notices given or received hereunder available for inspection upon reasonable
notice by the registered holders during normal business hours at its office.
Enterprises shall supply the Warrant Agent with such numbers of copies of this
Agreement as the Warrant Agent may reasonably request from time to time.
SECTION 7. Payment of Taxes. Enterprises will pay all documentary stamp
taxes attributable to the initial issuance of Warrant Shares upon the exercise
of Warrants; provided that Enterprises shall not be required to pay any tax or
taxes which may be payable in respect of any transfer involved in the issue of
any Warrant Certificates or any certificates for Warrant Shares in a name other
than that of the registered holder of a Warrant Certificate surrendered upon the
exercise of a Warrant, and Enterprises shall not be required to issue or deliver
such Warrant Certificates unless or until the Person or Persons requesting the
issuance thereof shall have paid to Enterprises the amount of such tax or shall
have established to the satisfaction of Enterprises that such tax has been paid.
Holders will be responsible for the payment of any and all brokerage costs,
documentary, stamp and transfer taxes and associated costs and expenses upon the
subsequent sale of Warrant Shares.
SECTION 8. Mutilated or Missing Warrant Certificates. In case any of
the Warrant Certificates shall be mutilated, lost, stolen or destroyed,
Enterprises shall issue and the Warrant Agent shall countersign, in exchange and
substitution for and upon cancellation of the mutilated Warrant Certificate, or
in lieu of and substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
Enterprises and the Warrant Agent of such loss, theft or destruction of such
Warrant Certificate and indemnity or bond, if requested, also satisfactory to
them. Applicants for such substitute Warrant Certificates shall also comply
20
with such other reasonable regulations and pay such other reasonable charges as
Enterprises or the Warrant Agent may prescribe.
SECTION 9. Reservation of Warrant Shares. (a) Enterprises will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Class B Stock or its authorized and
issued Class B Stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Warrant Shares upon exercise of Warrants, the
maximum number of shares of Class B Stock which may then be deliverable upon the
exercise of all outstanding Warrants.
(b) Enterprises or, if appointed, the transfer agent for the
Class B Stock (the "Transfer Agent") and every subsequent transfer agent for any
shares of Enterprises' capital stock issuable upon the exercise of any of the
rights of the Warrants as aforesaid will be irrevocably authorized and directed
at all times to reserve such number of authorized shares as shall be required
for such purpose. Enterprises will keep a copy of this Agreement on file with
the Transfer Agent and with every subsequent transfer agent for any shares of
Enterprises' capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. Enterprises will furnish such Transfer Agent a copy
of all notices of adjustments, and certificates related thereto, transmitted to
each holder pursuant to Section 15 hereof. The Warrant Agent is hereby
irrevocably authorized to requisition from time to time from such Transfer Agent
the stock certificates required to honor outstanding Warrants upon exercise
thereof in accordance with the terms of this Agreement. Enterprises will supply
such Transfer Agent with duly executed certificates for such purposes and will
provide or otherwise make available any cash which may be payable as provided in
Section 13.
(c) Before taking any action which would cause an adjustment
pursuant to Section 11 hereof to reduce the Exercise Price below the then par
value (if any) of the Warrant Shares, Enterprises will take any corporate action
which may, in the opinion of its counsel (which may be counsel employed by
Enterprises), be necessary in order that Enterprises may validly and legally
issue fully paid and nonassessable Warrant Shares at the Exercise Price as so
adjusted.
(d) Enterprises covenants that all Warrant Shares which may be
issued upon exercise of Warrants will, upon issue in accordance with the terms
of this Agreement, be fully paid, nonassessable, free of preemptive rights and
free from all taxes, liens, charges and security interests with respect to the
issuance thereof.
SECTION 10. Obtaining Stock Exchange Listings. Enterprises will from
time to time use its reasonable best efforts to take all action which may be
necessary so that the Warrant Shares, immediately upon their issuance upon the
exercise of Warrants, will be listed on the principal securities exchanges and
markets within the United States of America, if any, on which other shares of
Class B Stock are then listed, if any. Upon the listing of such Warrant Shares,
Enterprises shall notify the Warrant Agent in writing. Enterprises will obtain
and keep all required permits and records in connection with such listing.
21
SECTION 11. Adjustment of Exercise Price and Number of Warrant Shares
Issuable. The Exercise Price and the number of Warrant Shares issuable upon the
exercise of each Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 11. For purposes of this
Section 11, "Common Stock" means, as applicable, shares now or hereafter
authorized of any class of common stock of Enterprises and any other stock of
Enterprises, however designated, that have the right (subject to any prior
rights of any class or series of preferred stock) to participate in any
distribution of the assets or earnings of Enterprises without limit as to per
share amount.
(a) Adjustment for Change in Capital Stock. If Enterprises (i)
pays a dividend or makes a distribution on its Common Stock in shares of its
Common Stock, (ii) subdivides its outstanding shares of Common Stock into a
greater number of shares, (iii) combines its outstanding shares of Common Stock
into a smaller number of shares, (iv) makes a distribution on its Common Stock
in shares of its capital stock other than Common Stock or (v) issues by
reclassification of its Common Stock any shares of its capital stock; then the
Exercise Price in effect immediately prior to such action shall be
proportionately adjusted so that the holder of any Warrant thereafter exercised
may receive the aggregate number and kind of shares of capital stock of
Enterprises which he would have owned immediately following such action if such
Warrant had been exercised immediately prior to such action.
The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If, after an adjustment, a holder of a Warrant upon exercise of it may receive
shares of two or more classes of capital stock of Enterprises, Enterprises shall
determine the allocation of the adjusted Exercise Price between the classes of
capital stock. After such allocation, the exercise privilege and the Exercise
Price of each class of capital stock shall thereafter be subject to adjustment
on terms comparable to those applicable to Common Stock in this Section 11. Such
adjustment shall be made successively whenever any event listed above shall
occur. If the occurrence of any event listed in this subsection (a) results in
an adjustment under any provision of this Section 11 other than Section 11(q),
no adjustment shall be made under this subsection (a).
(b) Adjustment for Rights Issue. If Enterprises distributes
any rights, options or warrants to all holders of its Common Stock entitling
them to purchase shares of Common Stock at a price per share less than the Fair
Value (as defined herein) per share on that record date, the Exercise Price
shall be adjusted in accordance with the formula:
22
O + N x P
-----
E' = E x M
--------
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock issued and
outstanding on the record date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the Fair Value per share on the record date of Common
Stock offered.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, options or warrants. Subject to paragraph (p) of this Section 11, if at
the end of the period during which such rights, options or warrants are
exercisable, not all rights, options or warrants shall have been exercised, the
Exercise Price (and any subsequent adjustment thereto) shall be immediately
readjusted to what it would have been if "N" in the above formula had been the
number of shares actually issued.
(c) Adjustment for Other Distributions. If Enterprises
distributes to all holders of its Common Stock any of its assets (including,
without limitation, cash) or debt securities or any rights or warrants to
purchase debt securities, assets or other securities of Enterprises, the
Exercise Price shall be adjusted in accordance with the formula:
23
E' = E x M - F
-----
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the current market price per share of Class B Stock on the record
date mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants to be distributed in respect of
one share of Class B Stock as determined in good faith by the
Board of Directors of Enterprises (the "Board of Directors").
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
Subject to paragraph (p) of this Section 11, if an adjustment is made pursuant
to this subsection (c) as a result of the issuance of rights or warrants and at
the end of the period during which any such rights or warrants are exercisable,
not all such rights or warrants shall have been exercised, the Exercise Price
(and any subsequent adjustments thereto) shall be immediately readjusted as if
"F" in the above formula was the fair market value on the record date of the
assets, securities, rights or warrants actually distributed upon exercise of
such rights or warrants divided by the number of shares of Common Stock
outstanding on the record date.
This Section 11(c) does not apply to, and no adjustment shall be made
whatsoever for, cash dividends or cash distributions paid out of consolidated
current or retained earnings as shown on the books of Enterprises prepared in
accordance with generally accepted accounting principles. Also, this Section
11(c) does not apply to, and no adjustment shall be made pursuant to this
Section 11(c) with respect to, rights, options or warrants referred to in
Section 11(b) or for which adjustments are made under any provision of this
Section 11 other than Section 11(q).
(d) Adjustment for Common Stock Issue. If Enterprises issues
shares of Common Stock for a consideration per share less than the Fair Value
per share on the date Enterprises fixes the offering price of such additional
shares, the Exercise Price shall be adjusted in accordance with the formula:
24
P
-
E' = E x O + M
-----
A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the issuance
of such additional shares.
P = the aggregate consideration received for the issuance of such
additional shares.
M = the Fair Value per share on the date of issuance of such additional
shares.
A = the number of shares issued and outstanding immediately after
the issuance of such additional shares.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to and no adjustment shall be made
pursuant to this subsection (d) with respect to:
(1) any of the transactions described in subsections (b) and (c) of
this Section 11 or for which adjustments are made under any provision of this
Section 11 other than Section 11(q),
(2) the exercise of Warrants, or the conversion or exchange of other
securities convertible or exchangeable for Common Stock,
(3) Common Stock issued in a bona fide public offering
(4) Common Stock issued upon the exercise of rights or warrants issued
to the holders of Common Stock, or
(5) Common Stock issued to shareholders of any Person which merges into
Enterprises in proportion to their stock holdings of such Person immediately
prior to such merger, upon such merger.
(e) Adjustment for Convertible Securities Issue. If
Enterprises issues any securities convertible into or exchangeable for Common
Stock (other than securities issued in transactions described in subsections
(a), (b), (c) or (d) of this Section 11) for a consideration per share of Common
Stock initially deliverable upon conversion or exchange of such securities less
25
than the Fair Value per share on the date of issuance of such securities, the
Exercise Price shall be adjusted in accordance with this formula:
P
-
E' = E x O + M
-----
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares issued and outstanding immediately prior to
the issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the Fair Value per share on the date of issuance of such
securities.
D = the maximum number of shares deliverable upon conversion or in
exchange for such securities at the initial conversion or
exchange rate.
The adjustment shall be made successively whenever any such issuance is
made, and shall become effective immediately after such issuance.
If all of the shares deliverable upon conversion or exchange of such
securities have not been issued when such securities are no longer outstanding,
then the Exercise Price (and any subsequent adjustment thereto) shall promptly
be readjusted to the Exercise Price which would then be in effect had the
adjustment upon the issuance of such securities been made on the basis of the
actual number of shares of common stock issued upon conversion or exchange of
such securities.
This subsection (e) does not apply to:
(1) convertible securities issued to shareholders of any Person which
merges into Enterprises, or with a subsidiary of Enterprises, in proportion to
their stock holdings of such Person immediately prior to such merger, upon such
merger,
(2) convertible securities issued in a bona fide public offering, or
(3) convertible securities issued in a bona fide private placement
through a placement agent which is a member firm of the National Association of
Securities Dealers, Inc. (except to the extent that any discount from the
current market price attributable to restrictions on transferability of Common
Stock issuable upon conversion, as determined in good faith by the
26
Board of Directors of Enterprises (the "Board of Directors") and described in a
resolution thereof which shall be filed with the Warrant Agent, shall exceed 20%
of the then current market price).
(f) Consideration Received. For purposes of any computation
respecting consideration received pursuant to subsections (d) and (e) of this
Section 11, the following shall apply:
(1) in the case of the issuance of shares of Common Stock for cash, the
consideration shall be the amount of such cash, provided that deductions may be
made for any commissions, discounts or other expenses incurred by Enterprises
for any underwriting of the issue or otherwise in connection therewith;
(2) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair market value thereof as determined in good
faith by the Board of Directors (irrespective of the accounting treatment
thereof), whose determination shall be conclusive, and described in a resolution
thereof which shall be filed with the Warrant Agent;
(3) in the case of the issuance of securities convertible into or
exchangeable for shares, the aggregate consideration received therefor shall be
deemed to be the consideration received by Enterprises for the issuance of such
securities plus the additional consideration, if any, to be received by
Enterprises upon the conversion or exchange thereof (the consideration in each
case to be determined in the same manner as provided in clauses (1) and (2) of
this subsection); and
(4) in the case of the issuance of shares of Common Stock pursuant to
rights, options or warrants which rights, options or warrants were originally
issued together with one or more other securities as part of a unit, the
consideration shall be deemed to be (i) the fair value of such rights, options
or warrants at the time of issuance thereof as determined in good faith by the
Board of Directors whose determination shall be conclusive and described in a
resolution thereof which shall be filed with the Warrant Agent plus (ii) the
additional consideration, if any, to be received by Enterprises upon the
exercise, conversion or exchange thereof (as determined in the same manner as
provided in clause (1) and (2) of this subsection).
(g) Fair Value. In Sections 11(b), (c), (d) and (e) hereof,
the "Fair Value" per security at any date of determination shall be (1) in
connection with a sale by Enterprises to a party that is not an Affiliate (as
defined below) of Enterprises in an arm's-length transaction (a "Non-Affiliate
Sale"), the price per security at which such security is sold and (2) in
connection with any sale by Enterprises to an Affiliate of Enterprises, (a) the
last price per security at which such security was sold in a Non-Affiliate Sale
within the three-month period preceding such date of determination or (b) if
clause (a) is not applicable, the fair market value of such security determined
in good faith by a nationally recognized investment banking, appraisal or
valuation firm, which is not an Affiliate of Enterprises, in each case, taking
into account, among all other factors deemed relevant by such investment
banking, appraisal or valuation firm, the trading price and volume of such
security on any national securities exchange or automated quotation system on
which such security is traded. Notwithstanding the foregoing, any sale to the
Initial
27
Purchasers (or any successor thereto) pursuant to an underwritten public
offering registered under the Securities Act shall be deemed to be and treated
as a Non-Affiliate Sale.
For purposes of this Section 11(g), "Affiliate" of any specified Person
means (A) any other Person directly or indirectly controlling or controlled by
or under direct or indirect common control with such specified Person and (B)
any director, officer or employee of such specified Person. For purposes of this
definition "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with") as used with
respect to any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise.
(h) When De Minimis Adjustment May Be Deferred. No adjustment
in the Exercise Price need be made unless the adjustment would require an
increase or decrease of at least 1% in the Exercise Price. Any adjustments that
are not made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
1/1000th of a cent or to the nearest 1/l000th of a share, as the case may be.
(i) No Dilution of Impairment. Enterprises will not, by
amendment of its articles of incorporation or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of the Warrants, 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 holders of
the Warrants against dilution or other impairment. Without limiting the
generality of the foregoing, Enterprises (1) will take all such action as may be
necessary or appropriate in order that Enterprises may validly and legally issue
fully paid and nonassessable shares of Common Stock on the exercise of the
Warrants from time to time outstanding and (2) will not take any action which
results in any adjustment of the Exercise Price if the total number of Warrant
Shares issuable after the action upon the exercise of all of the Warrants would
exceed the total number of shares of Common Stock then authorized by
Enterprises' certificate of incorporation and available for the purpose of issue
upon such exercise. A consolidation, merger, reorganization or transfer of
assets involving Enterprises covered by Section 11(m) shall not be prohibited by
or require any adjustment under this Section 11(i).
(j) Notice of Adjustment. Whenever the Exercise Price is
adjusted, Enterprises shall provide the notices required by Section 14 hereof.
(k) Voluntary Reduction. Enterprises from time to time may
reduce the Exercise Price by any amount for any period of time, if the period is
at least 20 days and if the reduction is irrevocable during the period. Whenever
the Exercise Price is reduced, Enterprises shall mail to the Warrant Agent and
the Warrant holders a notice of the reduction. Enterprises shall mail the notice
at least 15 days before the date the reduced Exercise Price takes effect. The
notice shall state the reduced Exercise Price and the period in which it will be
in effect. A
28
reduction of the Exercise Price does not change or adjust the
Exercise Price otherwise in effect for purposes of Sections 11(a), (b), (c),
(d), (e) and (g) hereof.
(1) Notice of Certain Transactions. If (i) Enterprises takes
any action that would require an adjustment in the Exercise Price pursuant to
this Section 11, (ii) Enterprises takes any action that would require a
supplemental Warrant Agreement pursuant to Section 11(m) hereof or (iii) there
is a liquidation or dissolution of Enterprises, then Enterprises shall mail to
the Warrant Agent and the Warrant holders a notice stating the proposed record
date (if any) for a dividend or distribution or the proposed effective date of a
subdivision, combination, reclassification, consolidation, merger, transfer,
lease, liquidation or dissolution. Enterprises shall mail the notice at least 15
days before such date. Failure to mail the notice or any defect in it shall not
affect the validity or proposed timing of the transaction.
(m) Reorganization of Enterprises. If Enterprises consolidates
or merges with or into, or transfers or leases all or substantially all its
assets to, any Person, upon consummation of such transaction the Warrants shall
automatically become exercisable for the kind and amount of securities, cash or
other assets which the holder of a Warrant would have owned immediately after
the consolidation, merger, transfer or lease if the holder had exercised the
Warrant immediately before the effective date of the transaction. Concurrently
with the consummation of such transaction, the corporation formed by or
surviving any such consolidation or merger if other than Enterprises, or the
Person to which such sale or conveyance shall have been made, shall enter into a
supplemental Warrant Agreement so providing and further providing for
adjustments which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Section 11(m). The successor company shall mail
to Warrant holders a notice describing the supplemental Warrant Agreement. If
the issuer of securities deliverable upon exercise of Warrants under the
supplemental Warrant Agreement is an affiliate of the formed, surviving,
transferee or lessee corporation, that issuer shall join in the supplemental
Warrant Agreement.
(n) When No Adjustment Required. No adjustment need be made
for a transaction referred to in this Section 11 hereof, if Warrant holders are
to participate in the transaction on a basis (and with notice) that the Board of
Directors determines to be fair and appropriate in light of the basis (and
notice) on which holders of Common Stock participate in the transaction. No
adjustment need be made for (i) rights to purchase Common Stock pursuant to an
Enterprises plan for reinvestment of dividends or interest or (ii) a change in
the par value or no par value of the Common Stock. To the extent the Warrants
become convertible into cash, no adjustment need be made thereafter as to the
cash. Interest will not accrue on any cash amounts relating to adjustments
hereunder.
(o) Warrant Agent's Disclaimer. The Warrant Agent has no duty
to determine when an adjustment under this Section 11 should be made, how it
should be made or what it should be. The Warrant Agent has no duty to determine
whether any provisions of a supplemental Warrant Agreement under Section 11(m)
hereof are correct. The Warrant Agent makes no representation as to the validity
or value of any securities or assets issued upon
29
exercise of Warrants. The Warrant Agent shall not be responsible for
Enterprises' failure to comply with this Section 11 or any of Enterprises' other
obligations hereunder.
(p) When Issuance or Payment May Be Deferred. In any case in
which this Section 11 shall require that an adjustment in the Exercise Price be
made effective as of a record date for a specified event, Enterprises may elect
to defer until the final adjustment or readjustment required in connection with
the occurrence of such event is able to be made (i) issuing to the holder of any
Warrant exercised after such record date the Warrant Shares and other capital
stock of Enterprises, if any, issuable upon such exercise over and above the
Warrant Shares and other capital stock of Enterprises, if any, issuable upon
such exercise on the basis of the Exercise Price immediately before adjustment
is made for the specified event and (ii) paying to such holder any amount in
cash in lieu of a fractional share pursuant to Section 13 hereof; provided that
Enterprises shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional Warrant
Shares, other capital stock and cash upon the occurrence of the event requiring
such adjustment, subject to the following sentence. Upon the final adjustment or
readjustment required in connection with the occurrence of the event referred to
in the previous sentence, Enterprises shall be required to deliver to a holder
of Warrants exercised after such date only such cash or number of Warrant Shares
or capital stock of Enterprises issuable based upon the Exercise Price
determined as of the time of such final adjustment or readjustment.
(q) Adjustment in Number of Shares. Upon each adjustment of
the Exercise Price pursuant to this Section 11 (including any readjustment),
each Warrant outstanding prior to the making of the adjustment in the Exercise
Price shall thereafter evidence the right to receive upon payment of the
adjusted Exercise Price that number of shares of Common Stock (calculated to the
nearest hundredth) obtained from the following formula:
N' = N x E
--
E'
where:
N' = the adjusted number of Warrant Shares issuable upon
exercise of a Warrant by payment of the adjusted Exercise
Price.
N = the number or Warrant Shares previously issuable upon
exercise of a Warrant by payment of the Exercise Price
prior to adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
(r) Form of Warrants. In respect of any adjustments in the
Exercise Price or the number or kind of shares purchasable upon the exercise of
the Warrants, Warrants theretofore or thereafter issued may continue to express
the same price and number and kind of shares as are stated in the Warrants
initially issuable pursuant to this Agreement.
30
(s) No Duplicative Adjustments. Other than pursuant to Section
11(q) hereof, no adjustment shall be made under any provision of this Agreement
for an issuance of securities by Enterprises for which an adjustment is made
under any other provision of this Agreement. Furthermore, notwithstanding
anything to the contrary herein, if an adjustment is made under this Section 11
upon the issuance by Enterprises of any rights, options, warrants or any other
securities convertible into or exchangeable into Common Stock, no further
adjustment shall be made hereunder upon the exercise, conversion or exchange of
such securities and the issuance of Common Stock therefrom.
SECTION 12. Holdings Anti-Dilution. In addition to any adjustment to
the Exercise Price and number of Warrant Shares issuable upon exercise of the
Warrants pursuant to Section 11 hereof, if any event of the type described in
Section 11 hereof occurs with respect to the outstanding common membership
interests of Holdings, Enterprises' common membership interest in Holdings shall
be adjusted and the number of Warrant Shares issuable upon exercise of the
Warrants shall be adjusted (without duplication), in each case, so that the
holders of the Warrants shall thereafter, in the aggregate, have the same
indirect ownership of the common membership interests of Holdings after the
occurrence of such event that such Holders, in the aggregate, had immediately
before the occurrence of such event; provided that any such adjustment shall be
subject to readjustment and to the limitations and restrictions of the types set
forth in Section 11 hereof.
SECTION 13. Fractional Interests. Notwithstanding any adjustment
required pursuant to this Agreement, Enterprises shall not be required to issue
fractional Warrant Shares on the exercise of Warrants. If more than one Warrant
shall be presented for exercise in full at the same time by the same holder, the
number of full Warrant Shares which shall be issuable upon the exercise thereof
shall be computed on the basis of the aggregate number of Warrant Shares
purchasable on exercise of the Warrants so presented. If any fraction of a
Warrants (or specified portion thereof), Enterprises shall pay an amount in cash
equal to the Fair Value per Warrant Share, as determined on the day immediately
preceding the date the Warrant is presented for exercise, multiplied by such
fraction, computed to the nearest whole U.S. cent.
SECTION 14. Notices to Warrant Holders and the Warrant Agent. (a) Upon
any adjustment of the Exercise Price pursuant to Section 11 hereof, Enterprises
shall, as soon as reasonably practicable, thereafter (i) cause to be filed with
the Warrant Agent a certificate of a firm of independent public accountants of
recognized standing selected by the Board of Directors (who may be the regular
auditors of Enterprises) setting forth the Exercise Price after such adjustment
and setting forth in reasonable detail the method of calculation and the facts
upon which such calculations are based and setting forth the number of Warrant
Shares (or portion thereof) issuable after such adjustment in the Exercise Price
upon exercise of a Warrant and payment of the adjusted Exercise Price, which
certificate shall be conclusive evidence of the correctness of the matters set
forth therein, and (ii) cause to be given to each such registered holders of
Warrants at the address appearing on the Warrant register for each such
registered holder written notice of such adjustments by first-class mail,
postage prepaid. Where appropriate, such notice may be given in advance and
included as a part of the notice required to be mailed under the other
provisions of this Section 14.
31
(b) In case:
(i) Enterprises shall authorize the issuance to all holders of shares
of Class B Stock of rights, options or warrants to subscribe for or purchase
shares of Class B Stock or of any other subscription rights or warrants;
(ii) Enterprises shall authorize the distribution to all holders of
shares of Class B Stock of evidences of its indebtedness or assets (other than
issuances of securities of Enterprises by Enterprises and other than cash
dividends or cash distributions payable out of consolidated earnings or earned
surplus or dividends payable in shares of Class B Stock or distributions
referred to in Section 11(a) hereof);
(iii) of any consolidation or merger to which Enterprises is a party
and for which approval of any stockholders of Enterprises is required, or of the
conveyance or transfer of the properties and assets of Enterprises substantially
as an entirety, or of any reclassification or change of Class B Stock issuable
upon exercise of the Warrants (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination), or a tender offer or exchange offer for shares of
Class B Stock;
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of Enterprises;
(v) a Change of Control occurs; or (vi) Enterprises proposes to take
any action which would require an adjustment of the Exercise Price pursuant to
Section 11 hereof;
then Enterprises shall cause to be filed with the Warrant Agent and shall cause
to be given to each of the registered holders of Warrants at his address
appearing on the Warrant register, at least 20 days (or 10 days in any case
specified in clauses (i) or (ii) above) or, if not reasonably practicable, as
soon as reasonably practicable thereafter, prior to the applicable record date
hereinafter specified, or promptly in the case of events for which there is no
record date, by first-class mail, postage prepaid, a written notice stating (x)
the date as of which the holders of record of shares of Class B Stock to be
entitled to receive any such rights, options, warrants or distribution are to be
determined, (y) the initial expiration date set forth in any tender offer or
exchange offer for shares of Class B Stock or (z) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that holders of record of shares of Class B Stock shall be entitled
to exchange such shares for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up. The failure to give the notice required
by this Section 14 or any defect therein shall not affect the legality or
validity of any distribution, right, option, warrant, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the vote upon
any action.
32
(c) Nothing contained in this Agreement or in any of the
Warrant Certificates shall be construed as conferring upon the holders of
Warrants the right to vote or to consent or to receive notice as stockholders in
respect of the meetings of stockholders or the election of directors of
Enterprises or any other matter, or any rights whatsoever as stockholders of
Enterprises.
SECTION 15. Merger, Consolidation or Change of Name of Warrant Agent.
Any corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation succeeding to
the corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor warrant agent under
the provisions of Section 17 hereof. In case at the time such successor to the
Warrant Agent shall succeed to the agency created by this Agreement, and in case
at that time any of the Warrant Certificates shall have been countersigned but
not delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent; and in case at that time any of
the Warrant Certificates shall not have been countersigned, any successor to the
Warrant Agent may countersign such Warrant Certificates either in the name of
the predecessor Warrant Agent or in the name of the successor to the Warrant
Agent; and in all such cases such Warrant Certificates shall have the full force
and effect provided in the Warrant Certificates and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrant Certificates shall have been countersigned but
not delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and in case at that time any of the
Warrant Certificates shall not have been countersigned, the Warrant Agent may
countersign such Warrant Certificates either in its prior name or in its changed
name, and in all such cases such Warrant Certificates shall have the full force
and effect provided in the Warrant Certificates and in this Agreement.
SECTION 16. Warrant Agent. The Warrant Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which Enterprises and the holders of Warrants, by their acceptance
thereof, shall be bound:
(a) The statements contained herein and in the Warrant
Certificates shall be taken as statements of Enterprises and the Warrant Agent
assumes no responsibility for the correctness of any of the same except as such
describe the Warrant Agent or action taken or to be taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Warrant
Certificates except as herein otherwise expressly provided.
(b) The Warrant Agent shall not be responsible for any failure
of Enterprises to comply with any of the covenants or obligations contained in
this Agreement or in the Warrant Certificates to be complied with by
Enterprises.
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for Enterprises) and the Warrant Agent
shall incur no liability or
33
responsibility to Enterprises or to any holder of any Warrant Certificate in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in accordance with the opinion or the advice of such counsel.
(d) The Warrant Agent in absence of good faith shall incur no
liability or responsibility to Enterprises or to any holder of any Warrant
Certificate for any action taken in reliance on any Warrant Certificate,
certificate of shares, notice, resolution, waiver, consent, order, opinion,
certificate, or other paper, document or instrument believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties. The
Warrant Agent shall not be liable for any action it takes or omits to take in
good faith that it believes to be authorized or within its powers and shall not
be liable for any error of judgment made in good faith by one of its officers
unless the Warrant Agent is held to have been negligent.
(e) Enterprises agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution and
performance of this Agreement, to reimburse the Warrant Agent for all expenses
(including the fees and expenses of its counsel), taxes and governmental charges
and other charges of any kind and nature incurred by the Warrant Agent in the
execution of this Agreement and to indemnify and hold harmless the Warrant
Agent. Enterprises shall indemnify the Warrant Agent against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Warrant Agreement,
including the costs and expenses of enforcing this Warrant Agreement against
Enterprises (including this Section 16) and defending itself against any claim
(whether asserted by Enterprises or any holder or any other Person) or liability
in connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Warrant Agent shall notify
Enterprises promptly of any claim for which it may seek indemnity. Failure by
the Warrant Agent to so notify Enterprises shall not relieve Enterprises of its
obligations hereunder. Enterprises shall defend the claim and the Warrant Agent
shall cooperate in the defense. The Warrant Agent may have separate counsel and
Enterprises shall pay the reasonable fees and expenses of such counsel.
Enterprises need not pay for any settlement made without its consent, which
consent shall not be unreasonably withheld.
(f) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless Enterprises or one or more registered holders
of Warrants shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred, but this provision
shall not affect the power of the Warrant Agent to take such action as it may
consider proper, whether with or without any such security or indemnity. All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrant
Certificates or the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant Agent
shall be brought in its name as Warrant Agent and any recovery of judgment shall
be for the ratable benefit of the registered holders of the Warrants, as their
respective rights or interests may appear.
34
(g) The Warrant Agent, and any stockholder, director, officer
or employee of it, may buy, sell or deal in any of the Warrants or other
securities of Enterprises or become pecuniarily interested in any transaction in
which Enterprises may be interested, or contract with or lend money to
Enterprises or otherwise act as fully and freely as though it were not Warrant
Agent or stockholder, director, officer or employee under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for Enterprises or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent for
Enterprises, and its duties shall be determined solely by the provisions hereof.
The Warrant Agent shall not be liable for anything which it may do or refrain
from doing in connection with this Agreement except for its own negligence or
bad faith.
(i) The Warrant Agent shall not at any time be under any duty
or responsibility to any holder of any Warrant Certificate to make or cause to
be made any adjustment of the Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
be accountable with respect to the validity or value or the kind or amount of
any Warrant Certificates or Warrant Shares or of any securities or property
which may at any time be issued or delivered upon the exercise of any Warrant or
with respect to whether any such Warrant Shares or other securities will when
issued be validly issued and fully paid and nonassessable, and makes no
representation with respect thereto.
(j) The duties of the Warrant Agent shall be determined solely
by the express provisions of this Warrant Agreement and the Warrant Agent need
perform only those duties that are specifically set forth in this Warrant
Agreement and no others, and no implied covenants or obligations shall be read
into this Warrant Agreement against the Warrant Agent. In the absence of bad
faith on its part, the Warrant Agent may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Warrant Agent and conforming to the
requirements of this Warrant Agreement. However, the Warrant Agent shall examine
the certificates and opinions to determine whether or not they conform to the
requirements of this Warrant Agreement.
(k) Unless otherwise specifically provided in this Warrant
Agreement, any demand, request, direction or notice from Enterprises shall be
sufficient if signed by an officer of Enterprises.
SECTION 17. Resignation and Removal of Warrant Agent. No resignation or
removal of the Warrant Agent and no appointment of a successor warrant agent
shall become effective until the acceptance of appointment by the successor
warrant agent as provided herein. The Warrant Agent may resign its duties and be
discharged from all further duties and liability hereunder (except liability
arising as a result of the Warrant Agent's own negligence or willful misconduct)
after giving written notice to Enterprises. Enterprises or the holders of a
majority of
35
the unexercised Warrants may remove the Warrant Agent upon written notice, and
the Warrant Agent shall thereupon in like manner be discharged from all further
duties and liabilities hereunder, except as aforesaid. The Warrant Agent shall,
at Enterprises' expense, cause to be mailed (by first class mail, postage
prepaid) to each holder of a Warrant at his last address as shown on the
register of Enterprises maintained by the Warrant Agent a copy of said notice of
resignation or notice of removal, as the case may be. Upon such resignation or
removal, Enterprises shall appoint in writing a new warrant agent. If
Enterprises shall fail to make such appointment within a period of 30 days after
it has been notified in writing of such resignation by the resigning Warrant
Agent or after such removal, then the resigning Warrant Agent or the holder of
any Warrant may apply to any court of competent jurisdiction for the appointment
of a new warrant agent. Any new warrant agent, whether appointed by Enterprises
or by such a court, shall be a corporation doing business under the laws of the
United States or any state thereof, in good standing and having a combined
capital and surplus of not less than $50,000,000. The combined capital and
surplus of any such new warrant agent shall be deemed to be the combined capital
and surplus as set forth in the most recent annual report of its condition
published by such warrant agent prior to its appointment, provided that such
reports are published at least annually pursuant to law or to the requirements
of a federal or state supervising or examining authority. After acceptance in
writing of such appointment by the new warrant agent, it shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named herein as the Warrant Agent, without any further assurance,
conveyance, act or deed; but if for any reason it shall be necessary or
expedient to execute and deliver any further assurance, conveyance, act or deed,
the same shall be done at the expense of Enterprises and shall be legally and
validly executed and delivered by the resigning or removed Warrant Agent. Not
later than the effective date of any such appointment, Enterprises shall give
notice thereof to the resigning or removed Warrant Agent. Failure to give any
notice provided for in this Section 17, however, or any defect therein, shall
not affect the legality or validity of the resignation of the Warrant Agent or
the appointment of a new warrant agent, as the case may be.
SECTION 18. Registration. The Initial Purchasers and each subsequent
holder of Warrants shall be able to exercise their Warrants only if a
registration statement relating to the Warrant Shares is then in effect, or the
exercise of such Warrants is exempt from the registration requirements of the
Securities Act, and such securities are qualified for sale or exempt from
qualification under the applicable securities laws of the states in which the
various holders of the Warrants or other Persons to whom it is proposed that the
Warrant Shares be issued on exercise of the Warrants reside. The Initial
Purchaser and each subsequent holder of Warrants shall have the registration
rights set forth in the Warrant Registration Rights Agreement, dated as of the
date hereof, by and between Enterprises and the Initial Purchasers (the "Warrant
Registration Rights Agreement").
SECTION 19. Reports. (a) Whether or not required by the rules and
regulations of the Securities and Exchange Commission (the "Commission"), for so
long as any Warrants remain outstanding, Enterprises shall file with the
Commission (unless the Commission will not accept such a filing (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if Enterprises
were required to file such forms, including a "Management's Discussion and
Analysis of Financial Condition
36
and Results of Operations" and, with respect to the annual information only, a
report thereon by Enterprises' certified independent accountants, (ii) all
reports that would be required to be filed with the Commission on Form 8-K if
Enterprises were required to file such reports and (iii) any other information,
documents and other reports which Enterprises would be required to file with the
Commission if it were subject to Section 13 or 15(d) of the Exchange Act. In
addition, whether or not required by the rules and regulations of the
Commission, Enterprises shall make such information available to securities
analysts and prospective investors upon request. Furthermore, for so long as any
of the Warrants remain outstanding, Enterprises shall make available to any
prospective purchaser of the Warrants, the information required by Rule
144A(d)(4) under the Securities Act. Any such request should be directed to Jack
Sommer, President of Enterprises, c/o Aladdin Gaming, LLC, P.O. Box 94827, Las
Vegas, Nevada 89193, telephone (702) 736-7114; facsimile: (702) 736-7107.
(b) Enterprises shall provide the Warrant Agent with a
sufficient number of copies of all such reports that the Warrant Agent may be
required to deliver to the holders of the Warrants under this Section 19. The
Warrant Agent shall have no responsibilities with respect to any such reports,
except to distribute them to holders if required pursuant to this Section 19.
SECTION 20. Notices to Enterprises and Warrant Agent. Any notice or
demand authorized by this Agreement to be given or made by the Warrant Agent or
by the registered holder of any Warrant to or on Enterprises shall be
sufficiently given or made when and if deposited in the mail, first class or
registered, postage prepaid, addressed (until another address is filed in
writing by Enterprises with the Warrant Agent) as follows:
Aladdin Gaming Enterprises, Inc.
c/o Aladdin Gaming, LLC
P.O. Box 94827
Las Vegas, Nevada 89193
Attn: Richard J. Goeglein
With a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
Attn: Wallace L. Schwartz, Esq.
In case Enterprises shall fail to maintain such office or agency or
shall fail to give such notice of the location or of any change in the location
thereof, presentations may be made and notices and demands may be served at the
principal office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by Enterprises or by
the registered holder(s) of any Warrant to the Warrant Agent shall be
sufficiently given when and if deposited in the mail, first-class or registered,
postage prepaid, addressed (until another address is filed in writing by the
Warrant Agent with Enterprises) to the Warrant Agent as follows:
37
State Street Bank and Trust Company
Two International Place
Boston, MA 02110
Attn: Corporate Trust Division
SECTION 21. Supplements and Amendments. Enterprises and the Warrant
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Warrants in order to cure any ambiguity or to correct
or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other changes in
regard to matters or questions arising hereunder which Enterprises and the
Warrant Agent may deem necessary or desirable and which shall not in any way
materially and adversely affect the interests of the holders of Warrants. Any
amendment or supplement to this Agreement that has a material adverse effect on
the interests of the holders of Warrants shall require the written consent of
the holders of a majority of the then outstanding Warrants (excluding Warrants
held by Enterprises or any of its affiliates). The consent of each holder of
Warrants affected shall be required for any amendment pursuant to which the
Exercise Price would be increased or the number of Warrant Shares purchasable
upon exercise of Warrants would be decreased (other than pursuant to adjustments
provided in this Agreement).
SECTION 22. Successors. All the covenants and provisions of this
Agreement by or for the benefit of Enterprises or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder,
whether so expressed or not.
SECTION 23. Termination. This Agreement shall terminate at 5:00 p.m.,
New York City time on March 1, 2010.
SECTION 24. GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT CERTIFICATE
ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE
STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF SAID STATE, WITHOUT REGARD TO THE CONFLICT OF LAW RULES
THEREOF.
SECTION 25. Benefits of This Agreement. (a) Nothing in this Agreement
shall be construed to give to any Person or corporation other than Enterprises,
the Warrant Agent and the registered holders of Warrants any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of Enterprises, the Warrant Agent and the registered
holders of Warrants.
(b) All rights of action in respect of this Agreement are
vested in the holders of the Warrants Certificates, and any holder of any
Warrant Certificates, without the consent of the Warrant Agent or the holder of
any other Warrant Certificates, may, on such holder's own behalf and for such
holder's own benefit, enforce, and may institute and maintain any suit, action
or proceeding against Enterprises suitable to enforce, or otherwise in respect
of, such holder's
38
rights hereunder, including the right to exercise, exchange or
surrender for purchase such holder's Warrants in the manner provided in this
Agreement.
SECTION 26. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
[Signature Page Follows]
39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
ALADDIN GAMING ENTERPRISES, INC.
By: /s/ Jack Sommer
----------------------------
Name: Jack Sommer
Title: President
STATE STREET BANK AND TRUST COMPANY,
as Warrant Agent
By: /s/ Ruth A. Smith
----------------------------
Name: Ruth A. Smith
Title: Vice President
EXHIBIT A
[FORM OF WARRANT]
[Face of Warrant Certificate]
WARRANT CERTIFICATE
ALADDIN GAMING ENTERPRISES, INC.
No. [ ] [ ] Warrants
CUSIP Number [ ]
This Warrant Certificate certifies that [ ], or registered
assigns, is the registered holder of ________________ (_______) warrants (the
"Warrants") to purchase shares of Class B non-voting common stock, no par value
(the "Class B Stock"), of ALADDIN GAMING ENTERPRISES, INC., a Nevada corporation
("Enterprises"). Each Warrant entitles the holder upon exercise to receive from
Enterprises commencing on the Warrant Exercise Commencement Date (as defined in
the Warrant Agreement (as defined below)) until 5:00 p.m. New York City Time on
March 1, 2010, the number of fully paid and nonassessable Warrant Shares as set
forth in the Warrant Agreement, subject to adjustment as set forth in Section 11
of the Warrant Agreement, at the initial exercise price (the "Exercise Price")
of $.001 per share payable pursuant to the provisions of Section 6 of the
Warrant Agreement upon surrender of this Warrant Certificate and payment of the
Exercise Price at the office or agency of the Warrant Agent, but only subject to
the conditions set forth herein and in the Warrant Agreement referred to on the
reverse hereof. The Exercise Price and number of Warrant Shares issuable upon
exercise of the Warrants are subject to adjustment upon the occurrence of
certain events set forth in the Warrant Agreement. Subject to the provisions of
the Warrant Agreement, no Warrant may be exercised after 5:00 p.m., New York
City Time on March 1, 2010, and to the extent not exercised by such time such
Warrants shall become void. Reference is hereby made to the further provisions
of this Warrant Certificate set forth on the reverse hereof and such further
provisions shall for all purposes have the same effect as though fully set forth
at this place. This Warrant Certificate shall not be valid unless countersigned
by the Warrant Agent, as such term is used in the Warrant Agreement. This
Warrant Certificate shall be governed and construed in accordance with the
internal laws of the State of New York.
Reference is hereby made to the further provisions on the reverse
hereof which provisions shall for all purposes have the same effect as though
fully set forth at this place.
Terms used and not otherwise defined in this Warrant Certificate shall
have the meanings given them in the Warrant Agreement.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed by and construed in
accordance with the internal laws of the State of New York.
A-1
IN WITNESS WHEREOF, Aladdin Gaming Enterprises, Inc. has caused this
Warrant Certificate to be signed by its authorized officers and may cause its
corporate seal to be affixed hereunto or imprinted hereon.
Dated:__________________
ALADDIN GAMING ENTERPRISES, INC.
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
Countersigned:
STATE STREET BANK AND TRUST COMPANY,
as Warrant Agent
By:________________________________
Authorized Signatory
A-2
[FORM OF WARRANT]
[Reverse of Warrant Certificate]
[Unless and until it is exchanged in whole or in part for
Warrants in certificated form, this Warrant may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]1
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION AS SET
FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A")), (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A) (1), (2), (3) OR (7)
UNDER THE SECURITIES ACT) OR (C) IT IS A NON-U.S. PERSON AS DEFINED IN
RULE 904 UNDER THE SECURITIES ACT (2) AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH ENTERPRISES OR ANY AFFILIATE OF ENTERPRISES WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) ONLY (A) TO ENTERPRISES,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A INSIDE THE UNITED STATES,
TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
_________________
1 This paragraph is to be included only if the Warrant is in global form.
A-3
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT
IS ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE ENTERPRISES' AND THE WARRANT AGENT'S
RIGHTS PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE WARRANT
AGENT.
[THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE NOT
TRANSFERABLE SEPARATELY FROM THE NOTES ORIGINALLY SOLD AS A UNIT WITH
THE WARRANTS UNTIL THE EARLIEST OF (I) SEPTEMBER 1, 1998, (II) THE DATE
ON WHICH A REGISTRATION STATEMENT WITH RESPECT TO THE NOTES OR A
REGISTRATION STATEMENT WITH RESPECT TO THE WARRANTS AND THE WARRANT
SHARES IS FILED WITH THE COMMISSION UNDER THE SECURITIES ACT (III) THE
OCCURRENCE OF A CHANGE OF CONTROL (AS DEFINED IN THE INDENTURE RELATING
TO THE NOTES) OR A SALE OR RECAPITALIZATION OF ENTERPRISES, ALADDIN
GAMING HOLDINGS, LLC OR THE ALADDIN GAMING, LLC OCCURS, (IV) 30 DAYS
AFTER A QUALIFIED PUBLIC OFFERING (AS DEFINED IN THE INDENTURE RELATING
TO THE NOTES) OCCURS, (V) THE OCCURRENCE OF AN EVENT OF DEFAULT (AS
DEFINED IN THE INDENTURE RELATING TO THE NOTES) OR (VI) SUCH EARLIER
DATE AS DETERMINED BY MERRILL LYNCH & CO. IN ITS SOLE DISCRETION. PRIOR
TO SUCH DATE, THE WARRANTS EVIDENCED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY WITH THE SIMULTANEOUS TRANSFER TO THE TRANSFEREE OF
$1,000 PRINCIPAL AMOUNT OF NOTES FOR EACH WARRANT SO TRANSFERRED.]
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants expiring March 1, 2010 entitling the holder on
exercise to receive shares of Class B Stock, and are issued or to be issued
pursuant to a Warrant Agreement dated as of February 26, 1998 (the "Warrant
Agreement"), duly executed and delivered by Enterprises to State Street
A-4
Bank and Trust Company, as warrant agent (the " Warrant Agent"), which Warrant
Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Warrant Agent,
Enterprises and the holders (the words "holders" or "holder" meaning the
registered holders or registered holder) of the Warrants. A copy of the Warrant
Agreement may be obtained by the holder hereof upon written request to
Enterprises.
Warrants may be exercised at any time on or after the Warrant Exercise
Commencement Date and on or before March 1, 2010; provided that holders shall be
able to exercise their Warrants only if a registration statement relating to the
Warrant Shares is then in effect, or the exercise of such Warrants is exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Securities Act"), and such securities are qualified for sale or exempt
from qualification under the applicable securities laws of the states in which
the various holders of the Warrants or other Persons to whom it is proposed that
the Warrant Shares be issued on exercise of the Warrants reside. In order to
exercise all or any of the Warrants represented by this Warrant Certificate, (i)
in the case of Definitive Warrants, the holder must surrender for exercise this
Warrant Certificate to the Warrant Agent at its corporate trust office set forth
in Section 20 of the Warrant Agreement, (ii) in the case of a book-entry
interest in a Global Warrant, the exercising Agent Member whose name appears on
a securities position listing of the Depositary as the holder of such book-entry
interest must comply with the Depositary's procedures relating to the exercise
of such book-entry interest in such Global Warrant and (iii) in the case of both
Global Warrants and Definitive Warrants, the holder thereof or the Agent Member,
as applicable, must deliver to the Warrant Agent the form of election to
purchase on the reverse hereof duly filled in and signed, which signature shall
be medallion guaranteed by an institution which is a member of a Securities
Transfer Association recognized signature guarantee program, and upon payment to
the Warrant Agent for the account of Enterprises of the Exercise Price, as
adjusted as provided in the Warrant Agreement, for the number of Warrant Shares
in respect of which such Warrants are then exercised. No adjustment shall be
made for any dividends on any Class B Stock issuable upon exercise of this
Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price set forth on the face hereof may, subject to certain
conditions, be adjusted. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Class B Stock issuable upon the
exercise of each Warrant shall be adjusted. No fractions of a share of Class B
Stock will be issued upon the exercise of any Warrant, but Enterprises will pay
the cash value thereof determined as provided in the Warrant Agreement. In
addition to any adjustment to the Exercise Price and number of Warrant Shares
issuable upon exercise of the Warrants pursuant to Section 11 hereof, if any
event of the type described in Section 11 hereof occurs with respect to the
outstanding common membership interests of Holdings, Enterprises' common
membership interest in Holdings shall be adjusted and the number of Warrant
Shares issuable upon exercise of the Warrants shall be adjusted (without
duplication), in each case, so that the holders of the Warrants shall
thereafter, in the aggregate, have the same indirect ownership of the common
membership interests of Holdings after the occurrence of such event that such
Holders, in the aggregate, had immediately before the occurrence of such event;
provided that any such
A-5
adjustment shall be subject to readjustment and to the limitations and
restrictions of the types set forth in Section 11 hereof.
The holders of the Warrants shall have the registration rights set
forth in the Warrant Registration Rights Agreement, dated as of the date hereof,
by and between Enterprises and the Initial Purchasers.
Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
Enterprises and the Warrant Agent may deem and treat the registered
holder(s) thereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither Enterprises nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of Enterprises.
A-6
[FORM OF] SCHEDULE A
SCHEDULE OF EXCHANGES OF GLOBAL WARRANT
The following exchanges of a part of this Global Warrant for an
interest in another Global Warrant, or of other Restricted Global Warrants for
an interest in this Global Warrant, have been made:
Amount of
Warrants represented by Signature of
Amount of Amount of this Global authorized
decrease in increase in Warrant following officer of
number of number of such decrease (or Warrant Agent
Date of Warrants of this Warrants of this increase) or Warrant
Exchange Global Warrant Global Warrant Custodian
A-7
[FORM OF]
ELECTION TO EXERCISE
(To be executed upon exercise of Warrants)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive [ ] shares of Class
B Stock and herewith tenders payment for such shares to the order of
Enterprises in the amount of $[ ] in accordance with Section 6 of the
Warrant Agreement. The undersigned requests that a certificate for such
shares be registered in the name of [ ], whose address is [ ] and
that such shares be delivered to [ ] whose address is [ ]. If said
number of shares is less than all of the shares of Class B Stock purchasable
hereunder, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such shares be registered in the name
of [ ], whose address is [ ], and that such Warrant Certificate be
delivered to [ ], whose address is [ ].
Date:___________
-------------------------------------------
(Signature)
Note: The above signature must correspond
with the name as written upon the
face of this Warrant Certificate in
every particular, without
alteration or enlargement or any
change whatever.
-------------------------------------------
(Signature Guaranteed)
Note: Signature must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Warrant Agent, which requirements
include membership or participation
in the Securities Transfer Agents
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the Warrant
Agent in addition to, or in
substitution for, STAMP, all in
accordance with the Securities
Exchange Act of 1934, as amended.
Tax Identification or
Social Security Number:_____________________
Address:__________________________________
[FORM OF]
ASSIGNMENT
For value received [ ] hereby sells, assigns and transfers unto
[ ] the within Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint [ ]
attorney, to transfer said Warrant Certificate on the books of Enterprises,
with full power of substitution in the premises.
Date__________________________
-------------------------------------------
(Signature)
Note: The above signature must correspond
with the name as written upon the
face of this Warrant Certificate in
every particular, without
alteration or enlargement or any
change whatever.
-------------------------------------------
(Signature Guaranteed)
Note: Signature must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Warrant Agent, which requirements
include membership or participation
in the Securities Transfer Agents
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the Warrant
Agent in addition to, or in
substitution for, STAMP, all in
accordance with the Securities
Exchange Act of 1934, as amended.
EXHIBIT B
Each Certificate evidencing Warrants originally issued as part of a
Unit of Notes and Warrants issued by Enterprises (and each Certificate
evidencing Warrants issued on registration of transfer thereof or in exchange or
substitution therefor prior to the close of business on the Separation Date (as
defined)) shall bear a legend, which may be affixed by stamp or sticker, in
substantially the following form:
THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE NOT TRANSFERABLE
SEPARATELY FROM THE NOTES ORIGINALLY SOLD AS A UNIT WITH THE WARRANTS
UNTIL THE EARLIEST OF (I) SEPTEMBER 1, 1998, (II) THE DATE ON WHICH A
REGISTRATION STATEMENT WITH RESPECT TO THE NOTES OR A REGISTRATION
STATEMENT WITH RESPECT TO THE WARRANTS AND THE WARRANT SHARES IS FILED
WITH THE COMMISSION UNDER THE SECURITIES ACT (III) THE OCCURRENCE OF A
CHANGE OF CONTROL (AS DEFINED IN THE INDENTURE RELATING TO THE NOTES)
OR A SALE OR RECAPITALIZATION OF ENTERPRISES, ALADDIN GAMING HOLDINGS,
LLC OR ALADDIN GAMING, LLC OCCURS, (IV) 30 DAYS AFTER A QUALIFIED
PUBLIC OFFERING (AS DEFINED IN THE INDENTURE RELATING TO THE NOTES)
OCCURS, (V) THE OCCURRENCE OF AN EVENT OF DEFAULT (AS DEFINED IN THE
INDENTURE RELATING TO THE NOTES) OR (VI) SUCH EARLIER DATE AS
DETERMINED BY MERRILL LYNCH & CO. IN ITS SOLE DISCRETION. PRIOR TO SUCH
DATE, THE WARRANTS EVIDENCED BY THIS CERTIFICATE MAY BE TRANSFERRED
ONLY WITH THE SIMULTANEOUS TRANSFER TO THE TRANSFEREE OF $1,000
PRINCIPAL AMOUNT OF NOTES FOR EACH WARRANT SO TRANSFERRED.
EXHIBIT C
FORM OF CERTIFICATE OF TRANSFER
Aladdin Gaming Enterprises, Inc.
3667 Las Vegas Blvd. South
Las Vegas, NV 89109
Attn: Corporate Secretary
State Street Bank and Trust Company
Two International Place
Boston, MA 02110
Attn: Corporate Trust Division
Re: Warrants to Purchase Class B Stock of Aladdin Gaming Enterprises, Inc.
Reference is hereby made to the Warrant Agreement dated as of February
26, 1998 (the "Warrant Agreement"), between Aladdin Gaming Enterprises, Inc.
("Enterprises"), and State Street Bank and Trust Company, as warrant agent.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Warrant Agreement.
[ ], (the "Transferor") owns and proposes to transfer the
Warrant[s] or interest in such Warrant[s] specified in Annex A hereto, in the
amount of [ ] Warrants or interests (the "Transfer"), to [ ] (the
"Transferee"), as further specified in Annex A hereto. In connection with the
Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. / / Check if Transferee will take delivery of a beneficial interest
in the 144A Global Warrant or a Definitive Warrant Pursuant to Rule 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Warrant is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Warrant for its own account, or for one or more
accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A in a transaction meeting
the requirements of Rule 144A and such Transfer is in compliance with any
applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Warrant Agreement, the transferred beneficial interest or Definitive Warrant
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Warrant and/or the Definitive
Warrant and in the Warrant Agreement and the Securities Act.
C-1
2. / / Check if Transferee will take delivery of a beneficial interest in the
Regulation S Global Warrant or a Definitive Warrant pursuant to Regulation S.
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a Person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903 or Rule 904 of
Regulation S under the Securities Act, (iii) the transaction is not part of a
plan or scheme to evade the registration requirements of the Securities Act and
(iv) if the proposed transfer is being made prior to the expiration of the
Restricted Period, the transfer is not being made to a U.S. Person or for the
account or benefit of a U.S. Person (other than an Initial Purchaser). Upon
consummation of the proposed transfer in accordance with the terms of the
Warrant Agreement, the transferred beneficial interest or Definitive Warrant
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note and/or the Definitive
Note and in the Warrant Agreement and the Securities Act.
3. / / Check and complete if Transferee will take delivery of a beneficial
interest in the IAI Global Warrant or a Definitive Warrant pursuant to any
provision of the Securities Act other than Rule 144A or Regulation S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Warrants and Restricted
Definitive Warrants and pursuant to and in accordance with the Securities Act
and any applicable blue sky securities laws of any state of the United States,
and accordingly the Transferor hereby further certifies that (check one):
(a) / / such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) / / such Transfer is being effected to Enterprises or a subsidiary
thereof;
or
(c) / / such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
C-2
(d) / / such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial interests in a
Restricted Global Warrant or Restricted Definitive Warrants and the requirements
of the exemption claimed, which certification is supported by (1) a certificate
executed by the Transferee in the form of Exhibit E to the Warrant Agreement and
(2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy
of which the Transferor has attached to this certification), to the effect that
such Transfer is in compliance with the Securities Act. Upon consummation of the
proposed transfer in accordance with the terms of the Warrant Agreement, the
transferred beneficial interest or Definitive Warrant will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the IAI Global Warrant and/or the Definitive Warrants and in the Warrant
Agreement and the Securities Act.
4. / / Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Warrant or of an Unrestricted Definitive Warrant.
(a) / / Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Warrant
Agreement and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Warrant Agreement
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Warrant Agreement, the transferred
beneficial interest or Definitive Warrant will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Warrants, on Restricted Definitive Warrants and in the
Warrant Agreement.
(b) / / Check if Transfer is Pursuant to Regulation S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Warrant Agreement and any applicable blue sky securities laws of any state
of the United States and (ii) the restrictions on transfer contained in the
Warrant Agreement and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Warrant Agreement, the transferred
beneficial interest or Definitive Warrant will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Warrants, on Restricted Definitive Warrants and in the
Warrant Agreement.
(c) / / Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Warrant Agreement and any applicable blue sky
securities laws of any State of the United States and (ii)
C-3
the restrictions on transfer contained in the Warrant Agreement and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Warrant Agreement, the transferred beneficial interest or
Definitive Warrant will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Warrants or Restricted Definitive Warrants and in the Warrant Agreement.
This certificate and the statements contained herein are made for your
benefit and the benefit of Enterprises.
_____________________________________________
[Insert Name of Transferor]
_____________________________________________
(Signature)
Note: The above signature must correspond
with the name as written upon the
face of this Warrant Certificate in
every particular, without
alteration or enlargement or any
change whatever.
_____________________________________________
(Signature Guaranteed)
Note: Signature must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Warrant Agent, which requirements
include membership or participation
in the Securities Transfer Agents
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the Warrant
Agent in addition to, or in
substitution for, STAMP, all in
accordance with the Securities
Exchange Act of 1934, as amended.
Dated:
C-4
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) / / a beneficial interest in the:
(i) / / 144A Global Warrant, or
(ii) / / Regulation S Global Warrant, or
(iii) / / IAI Global Warrant, or
(b) / / a Restricted Definitive Warrant.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) / / a beneficial interest in the:
(i) / / 144A Global Warrant, or
(ii) / / Regulation S Global Warrant, or
(iii) / / IAI Global Warrant, or
(iv) / / Unrestricted Global Warrant, or
(b) / / a Restricted Definitive Warrant, or
(c) / / an Unrestricted Definitive Warrant.
in accordance with the terms of the Warrant Agreement.
C-5
EXHIBIT D
FORM OF CERTIFICATE OF EXCHANGE
Aladdin Gaming Enterprises, Inc.
3667 Las Vegas Blvd. South
Las Vegas, NV 89109
Attn: Secretary
State Street Bank and Trust Company
Two International Place
Boston, MA 02110
Attn: Corporate Trust Division
Re: Warrants to Purchase Class B Stock of Aladdin Gaming Enterprises, Inc.
Reference is hereby made to the Warrant Agreement, dated as of
February 26, 1998 (the "Warrant Agreement"), between Aladdin Gaming Enterprises,
Inc., as issuer ("Enterprises"), and State Street Bank and Trust Company, as
warrant agent. Capitalized terms used but not defined herein shall have the
meanings given to them in the Warrant Agreement.
[ ], (the "Owner") owns and proposes to exchange
the Warrant[s] or interest in such Warrant[s] specified herein, in the amount
of [ ] Warrant[s] or interests (the "Exchange"). In connection with the
Exchange, the Owner hereby certifies that:
1. / / Exchange of Restricted Definitive Warrants or Beneficial Interests in a
Restricted Global Warrant for Unrestricted Definitive Warrants or Beneficial
Interests in an Unrestricted Global Warrant
(a) / / Check if Exchange is from beneficial interest in a
Restricted Global Warrant to beneficial interest in an Unrestricted Global
Warrant. In connection with the Exchange of the Owner's beneficial interest in a
Restricted Global Warrant for a beneficial interest in an Unrestricted Global
Warrant in an equal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Warrants and pursuant to and in accordance with the
United States Securities Act of 1933, as amended (the "Securities Act"), (iii)
the restrictions on transfer contained in the Warrant Agreement and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest in an Unrestricted Global
Warrant is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(b) / / Check if Exchange is from beneficial interest in a
Restricted Global Warrant to Unrestricted Definitive
D-1
Warrant. In connection with the Exchange of the Owner's beneficial interest in a
Restricted Global Warrant for an Unrestricted Definitive Warrant, the Owner
hereby certifies (i) the Definitive Warrant is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Restricted Global Warrants and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Warrant Agreement and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act and (iv)
the Definitive Warrant is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.
(c) / / Check if Exchange is from Restricted Definitive
Warrant to beneficial interest in an Unrestricted Global Warrant. In connection
with the Owner's Exchange of a Restricted Definitive Warrant for a beneficial
interest in an Unrestricted Global Warrant, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Warrants and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained
in the Warrant Agreement and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(d) / / Check if Exchange is from Restricted Definitive
Warrant to Unrestricted Definitive Warrant. In connection with the Owner's
Exchange of a Restricted Definitive Warrant for an Unrestricted Definitive
Warrant, the Owner hereby certifies (i) the Unrestricted Definitive Warrant is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Warrants and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Warrant
Agreement and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive Warrant
is being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.
2. / / Exchange of Restricted Definitive Warrants or Beneficial Interests in
Restricted Global Warrants for Restricted Definitive Warrants or Beneficial
Interests in Restricted Global Warrants
(a) / / Check if Exchange is from beneficial interest in a
Restricted Global Warrant to Restricted Definitive Warrant. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Global Warrant
for a Restricted Definitive Warrant with an equal amount, the Owner hereby
certifies that the Restricted Definitive Warrant is being acquired for the
Owner's own account without transfer. Upon consummation of the proposed Exchange
in accordance with the terms of the Warrant Agreement, the Restricted Definitive
Warrant issued will continue to be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Definitive
Warrant and in the Indenture and the Securities Act.
D-2
(b) / / Check if Exchange is from Restricted Definitive
Warrant to beneficial interest in a Restricted Global Warrant. In connection
with the Exchange of the Owner's Restricted Definitive Warrant for a beneficial
interest in the [CHECK ONE] / / 144A Global Warrant, / / Regulation S Global
Warrant, / / IAI Global Warrant with an equal amount, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own account
without transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Warrants and pursuant
to and in accordance with the Securities Act, and in compliance with any
applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Exchange in accordance with the terms of the
Warrant Agreement, the beneficial interest issued will be subject to the
restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global
Warrant and in the Warrant Agreement and the Securities Act.
This certificate and the statements contained herein are made
for your benefit and the benefit of Enterprises.
_____________________________________________
[Insert Name of Owner]
_____________________________________________
(Signature)
Note: The above signature must correspond
with the name as written upon the
face of this Warrant Certificate in
every particular, without
alteration or enlargement or any
change whatever.
_____________________________________________
(Signature Guaranteed)
Note: Signature must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Warrant Agent, which requirements
include membership or participation
in the Securities Transfer Agents
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the Warrant
Agent in
D-3
addition to, or in substitution
for, STAMP, all in accordance with
the Securities Exchange Act of
1934, as amended.
Dated:
D-4
EXHIBIT E
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Aladdin Gaming Enterprises, Inc.
3667 Las Vegas Blvd. South
Las Vegas, NV 89109
Attn: Secretary
State Street Bank and Trust Company
Two International Place
Boston, MA 02110
Attn: Corporate Trust Division
Re: Warrants to Purchase Class B Stock of Aladdin Gaming Enterprises, Inc.
Reference is hereby made to the Warrant Agreement, dated as of
February 26, 1998 (the "Warrant Agreement"), between Aladdin Gaming Enterprises,
Inc., as issuer ("Enterprises"), and State Street Bank and Trust Company, as
warrant agent. Capitalized terms used but not defined herein shall have the
meanings given to them in the Warrant Agreement.
In connection with our proposed purchase of [ ] number of:
(a) / / a beneficial interest in a Global Warrant, or
(b) / / a Definitive Warrant,
we confirm that:
1. We understand that any subsequent transfer of the Warrants
or any interest therein is subject to certain restrictions and conditions set
forth in the Warrant Agreement and the undersigned agrees to be bound by, and
not to resell, pledge or otherwise transfer the Warrants or any interest therein
except in compliance with, such restrictions and conditions and the United
States Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Warrants have
not been registered under the Securities Act, and that the Warrants and any
interest therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Warrants or any
interest therein, we will do so only (A) to Enterprises or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (c) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to
Enterprises a signed letter substantially in the form of this letter and an
Opinion of Counsel in
E-1
form reasonably acceptable to Enterprises to the effect that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
provisions of Rule 144(k) under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, and we further agree
to provide to any Person purchasing the Definitive Warrant or beneficial
interest in a Global Warrant from us in a transaction meeting the requirements
of clauses (A) through (E) of this paragraph a notice advising such purchaser
that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Warrants
or beneficial interest therein, we will be required to furnish to you and
Enterprises such certifications, legal opinions and other information as you and
Enterprises may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Warrants
purchased by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Warrants,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
5. We are acquiring the Warrants or beneficial interest
therein purchased by us for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each of which we exercise
sole investment discretion.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
_____________________________________________
[Insert Name of Accredited Investor]
_____________________________________________
(Signature)
Note: The above signature must correspond
with the name as written upon the
face of this Warrant Certificate in
every particular, without
alteration or enlargement or any
change whatever.
E-2
_____________________________________________
(Signature Guaranteed)
Note: Signature must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Warrant Agent, which requirements
include membership or participation
in the Securities Transfer Agents
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the Warrant
Agent in addition to, or in
substitution for, STAMP, all in
accordance with the Securities
Exchange Act of 1934, as amended.
Dated: