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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549p
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
MULTIMEDIA GAMES, INC.
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(Exact name of registrant as specified in its charter)
Texas 74-2611034
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(State of Incorporation (I.R.S. Employer Identification No.)
or organization)
7335 South Lewis Avenue, Suite 204
Tulsa, Oklahoma 74136
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(Address of principal executive offices) (Zip code)
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If this Form relates to the registration of If this Form relates to the registration
a class of debt securities and is effective of a class of debt securities and is to
upon filing pursuant to General Instruction become simultaneously with the
A(c)(1) please check the following box. [ ] effectiveness of a concurrent
registration statement under the
Securities Act of 1933 pursuant to
General Instruction A(c)(2) please check
the following box. [ ]
</TABLE>
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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None
Securities to be registered pursuant to Section 12(g) of the Act:
Class A Warrants
Class B Warrants
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(Title of Class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
The description of the Registrant's Class A Warrants and Class B Warrants
is set forth under the caption entitled "Securities -- Warrants" contained in
the Prospectus (the "Prospectus") which forms a part of the Registrant's
Registration Statement on Form SB-2 under the Securities Act of 1933, as
amended, File No. 333-30721, filed with the Securities and Exchange Commission
on July 3, 1997, which is incorporated herein by reference. A copy of pages 36
and 37 of the Prospectus are attached as Exhibit 8 to this filing pursuant to
Rule 12b-23 under the Securities and Exchange Act of 1934, as amended.
ITEM 2. EXHIBITS.
1. Amended and Restated Articles of Incorporation -- incorporated by
reference, Exhibit 3.1 to the Company's Form 10-QSB filed with the Commission
for the quarter ended March 31, 1997.
2. Bylaws -- incorporated by reference, Exhibit 3.2 to the Company's Form
10-KSB filed with the Commission for the fiscal year ended September 30, 1994.
3. Form of Class A Warrant.
4. Form of Class B Warrant.
5. Form of Registration Rights Agreement among the Company and holders of
Private Placement Warrants -- incorporated by reference, Exhibit 10.11 to
Company's Form 10-KSB filed with the Commission for the fiscal year ended
September 30, 1996.
6. Warrant Agreement dated November 12, 1996 between the Company and
Corporate Stock Transfer.
7. Amendment to Warrant Agreement dated July 18, 1997 between the Company
and Corporate Stock Transfer.
8. Pages 36 and 37 of the Prospectus.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
MULTIMEDIA GAMES, INC.
By: /s/ Frederick E. Roll
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Frederick E. Roll
Chief Financial Officer
Dated: July 28, 1997
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EXHIBIT INDEX
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<CAPTION>
Exhibit No. Description
<S> <C>
1. Amended and Restated Articles of Incorporation --
incorporated by reference, Exhibit 3.1 to the Company's
Form 10-QSB filed with the Commission for the quarter
ended March 31, 1997.
2. Bylaws -- incorporated by reference, Exhibit 3.2 to the
Company's Form 10-KSB filed with the Commission for the
fiscal year ended September 30, 1994.
3. Form of Class A Warrant.
4. Form of Class B Warrant.
5. Form of Registration Rights Agreement among the Company
and holders of Private Placement Warrants -- incorporated
by reference, Exhibit 10.11 to Company's Form 10-KSB
filed with the Commission for the fiscal year ended
September 30, 1996.
6. Warrant Agreement dated November 12, 1996 between the
Company and Corporate Stock Transfer.
7. Amendment to Warrant Agreement dated July 18, 1997
between the Company and Corporate Stock Transfer.
8. Pages 36 and 37 of the Prospectus.
</TABLE>
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EXHIBIT 3
MULTIMEDIA GAMES, INC.
CLASS A WARRANTS
WARRANT CERTIFICATE TO ACQUIRE COMMON STOCK,
$.01 PAR VALUE, OF MULTIMEDIA GAMES, INC.
VOID AFTER NOVEMBER 12, 2001
THIS WARRANT IS REDEEMABLE AS PROVIDED HEREIN
THIS CERTIFIES THAT
or registered assigns, has the right to purchase at any time after November 7,
1997(the "Exercise Date") and on or before the close of business on November
12, 2001, (the "Expiration Date"), one fully paid and non-assessable share of
Common Stock, $.01 par value (the "Common Stock"), of MULTIMEDIA GAMES, INC., a
Texas corporation (hereinafter called the "Company"), for each Warrant
represented hereby, upon payment therefor in cash at the rate initially of
$8.00 per share of such Common Stock (the "Exercise Price") subject to the
adjustments, terms and conditions herein and in the Warrant Agreement between
the Company and Corporate Stock Transfer, Inc., as Warrant Agent (as the same
may from time to time be amended, the "Warrant Agreement"). If at any time no
other Warrant Agent is acting for the Company, the Company shall be deemed the
Warrant Agent.
This Warrant Certificate is issued pursuant to the terms and
provisions of the Warrant Agreement and each holder of a Warrant is entitled to
the benefits thereof. The Warrant Agreement provides, among other things, for
adjustment of the Exercise Price and the
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number of shares of Common Stock issuable upon exercise of this Warrant
Certificate in certain events, including the issuance of Common Stock as a
stock dividend; sub-divisions, combinations and reclassifications of the Common
Stock; the distribution to all holders of Common Stock of evidences of
indebtedness, assets (excluding cash dividends or other distributions) or
rights to subscribe other than those mentioned above; and certain mergers,
consolidations and sales of substantially all the assets of the Company. Upon
each such adjustment, notice thereof will be given by filing a statement
thereof with the Warrant Agent and by mailing a copy of such notice to all
registered holders of Warrant Certificates.
No fractional shares of Common Stock will be issued upon the exercise
of a Warrant; instead, the Warrant holder will be entitled to receive cash for
such fractional interest at current market value.
The Warrants are redeemable by the Company, in whole or in part, on
not less than 30 days' prior written notice at a redemption price of $.10 per
Warrant (the "redemption price") at any time after November 7, 1997 (the
"Redemption Date"); provided that, (i) the closing bid quotation price of the
Common Stock for the 20 consecutive trading days ending not later than the
seventh day prior to the day on which the Company gives notice of redemption
has been at least 150% of the then effective Exercise Price per share, and (ii)
the Warrants and the Warrant Shares are subject to an effective registration
statement under the Securities Act of 1933, as amended, (the "Act") at the time
a notice of redemption is given and at all times thereafter through the date
fixed for redemption; provided further that, the condition referred to in
clause (ii) shall be deemed satisfied if the holder was afforded the right and
opportunity to include the Warrants and the Warrant Shares in any such
registration statement and declined to do so. On and after the date fixed for
redemption and stated in such notice, each holder of the Warrants called for
redemption shall surrender the Warrant Certificate evidencing such Warrants to
the Company at the place designated in such notice and shall thereupon be
entitled to receive payment of the redemption price. If such notice of
redemption shall have been duly given, and if on or before the date fixed for
redemption, funds necessary for the redemption shall be available therefor,
then, notwithstanding that the Warrant Certificates evidencing any Warrants so
called for
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redemption shall not have been surrendered, all rights with respect to the
Warrants so called for redemption shall forthwith after such date cease and
determine, except only the right of the holders to receive the redemption price
without interest upon surrender of the Warrant Certificates therefor. Holders
of the Warrant shall have the right to exercise the Warrants for the purchase
of Warrant Shares until the close of business on the date fixed for
redemption.
Each Warrant represented hereby may be exercised by presentation and
surrender of this Certificate at the office of the Warrant Agent, with the Form
of Exercise on the reverse hereof duly executed, accompanied by payment for the
shares of Common Stock purchased and, if required, with the Form of Assignment
on the reverse hereof or a separate instrument of transfer duly executed with
signature guaranteed. In the event that the number of Warrants so exercised is
less than the total number of Warrants represented hereby, there will be issued
to the person so exercising the Warrants, or his registered assigns, a new
Warrant Certificate representing the number of Warrants not exercised.
In the event of the liquidation, dissolution or winding-up of the
Company, in cases where the property to be distributed to the holders of Common
Stock of the Company consists principally of other than securities of another
entity which shall have purchased all or substantially all of the Company's
assets, the right to exercise Warrants shall terminate at the close of business
on the fourth full business day before the earliest date fixed for the payment
of any amount distributable on the Common Stock of the Company; provided that,
at least 45 days prior thereto, notice of such payment date shall have been
given by the Warrant Agent in writing to all registered holders of Warrant
Certificates. Warrants shall terminate and shall be of no further force and
effect at such close of business on such date.
Holders of Warrant Certificates, as such holders, shall have no voting
or any other rights of a stockholder of the Company, shall have no right, other
than the right evidenced thereby, to purchase or receive Common Stock of the
Company, shall not be entitled to subscribe to or purchase any additional or
increased stock of the Company of any class, whether now or hereafter
authorized, or obligations convertible into any class or classes of stock, or
stock of any class convertible into stock of any other
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class or classes, or obligations, stock or other securities carrying warrants
or rights to subscribe to stock of the Company of any class or classes, whether
now or hereafter authorized.
This Warrant Certificate is transferable by the registered holder in
person or by his duly authorized attorney on the books of the Company at the
office of the Warrant Agent upon surrender of this Certificate with the Form of
Assignment on the reverse hereof duly endorsed or with other appropriate
instruments of transfer duly endorsed with signature guaranteed and payment of
any transfer taxes or other governmental charges in connection with such
transfer.
This Warrant Certificate is exchangeable for Warrant Certificates of
different denominations at the office of the Warrant Agent upon surrender of
this Certificate, duly endorsed or with appropriate instruments of transfer.
Warrant Certificates issued upon transfers and exchanges shall be issued only
for full Warrants or an integral multiple thereof. Warrant Certificates which
are transferred shall be canceled.
This Warrant is not valid unless countersigned by the Warrant Agent.
Unless sooner terminated as provided herein upon exercise or upon
liquidation, dissolution or winding-up of the Company, the purchase rights
under the Warrants shall terminate on the Expiration Date and thereafter the
Warrants represented by this Certificate shall be of no further force and
effect.
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WITNESS the facsimile signature of the proper officer of the Company
and its facsimile seal.
Dated:
MULTIMEDIA GAMES, INC.
By:
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Authorized Officer
ATTEST:
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Secretary
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[FORM OF REVERSE SIDE OF CERTIFICATE]
FORM OF EXERCISE
The undersigned hereby irrevocably exercises _____ Warrants to subscribe for
and purchase shares of Common Stock of the within named Company evidenced by
this Warrant Certificate and herewith makes payment of the purchase price in
full. Kindly issue certificates for shares of Common Stock in accordance with
the instructions given below. The certificate for the unexercised balance of
the Warrants evidenced by the within Warrants Certificate, if any, will be
registered in the name of the undersigned.
DATED:
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Instructions for Registration of stock
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Name (please print)
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Social Security or Other identifying Number;
ADDRESS:
- --------------------------------------------------
Street
- --------------------------------------------------
City, State and Zip Code
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Warrant Certificate)
FOR VALUE RECEIVED, _________________ hereby sells, assigns and
transfers unto
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______, Attorney, to
transfer the within Warrant Certificate on the books of the within named
Company, with full power of substitution.
Dated: Signature:
(Signature must conform in all respects
to name of the holder as specified in
the face of the Warrant certificate)
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Social Security or Tax I.D. No.
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EXHIBIT 4
MULTIMEDIA GAMES, INC.
CLASS B WARRANTS
WARRANT CERTIFICATE TO ACQUIRE COMMON STOCK,
$.01 PAR VALUE, OF MULTIMEDIA GAMES, INC.
VOID AFTER NOVEMBER 12, 2001
THIS WARRANT IS REDEEMABLE AS PROVIDED HEREIN
THIS CERTIFIES THAT
or registered assigns, has the right to purchase at any time after November 7,
1997(the "Exercise Date") and on or before the close of business on November
12, 2001, (the "Expiration Date"), one fully paid and non-assessable share of
Common Stock, $.01 par value (the "Common Stock"), of MULTIMEDIA GAMES, INC., a
Texas corporation (hereinafter called the "Company"), for each Warrant
represented hereby, upon payment therefor in cash at the rate initially of
$8.00 per share of such Common Stock (the "Exercise Price"), subject to the
adjustments, terms and conditions herein and in the Warrant Agreement between
the Company and Corporate Stock Transfer, Inc., as Warrant Agent (as the same
may from time to time be amended, the "Warrant Agreement"). If at any time no
other Warrant Agent is acting for the Company, the Company shall be deemed
the Warrant Agent.
This Warrant Certificate is issued pursuant to the terms and provisions
of the Warrant Agreement and each holder of a Warrant is entitled to the
benefits thereof. The Warrant Agreement provides, among other things, for
adjustment of the Exercise Price and the
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number of shares of Common Stock issuable upon exercise of this Warrant
Certificate in certain events, including the issuance of Common Stock as a
stock dividend; sub-divisions, combinations and reclassifications of the Common
Stock; the distribution to all holders of Common Stock of evidences of
indebtedness, assets (excluding cash dividends or other distributions) or
rights to subscribe other than those mentioned above; and certain mergers,
consolidations and sales of substantially all the assets of the Company. Upon
each such adjustment, notice thereof will be given by filing a statement
thereof with the Warrant Agent and by mailing a copy of such notice to all
registered holders of Warrant Certificates.
No fractional shares of Common Stock will be issued upon the exercise of
a Warrant; instead, the Warrant holder will be entitled to receive cash for
such fractional interest at current market value.
The Warrants are redeemable by the Company, in whole or in part, on not
less than 30 days' prior written notice at a redemption price of $.10 per
Warrant (the "redemption price") at any time after February 7, 1999 (the
"Redemption Date"); provided that, (i) the closing bid quotation price of the
Common Stock for the 20 consecutive trading days ending not later than the
seventh day prior to the day on which the Company gives notice of redemption
has been at least 150% of the then effective Exercise Price per share, and (ii)
the Warrants and the Warrant Shares are subject to an effective registration
statement under the Securities Act of 1933, as amended, (the "Act") at the time
a notice of redemption is given and at all times thereafter through the date
fixed for redemption; provided further that, the condition referred to in
clause (ii) shall be deemed satisfied if the holder was afforded the right and
opportunity to include the Warrants and the Warrant Shares in any such
registration statement and declined to do so. On and after the date fixed for
redemption and stated in such notice, each holder of the Warrants called for
redemption shall surrender the Warrant Certificate evidencing such Warrants to
the Company at the place designated in such notice and shall thereupon be
entitled to receive payment of the redemption price. If such notice of
redemption shall have been duly given, and if on or before the date fixed for
redemption, funds necessary for the redemption shall be available therefor,
then, notwithstanding that the Warrant Certificates evidencing any Warrants so
called for
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redemption shall not have been surrendered, all rights with respect to the
Warrants so called for redemption shall forthwith after such date cease and
determine, except only the right of the holders to receive the redemption price
without interest upon surrender of the Warrant Certificates therefor. Holders
of the Warrant shall have the right to exercise the Warrants for the purchase
of Warrant Shares until the close of business on the date fixed for
redemption.
Each Warrant represented hereby may be exercised by presentation and
surrender of this Certificate at the office of the Warrant Agent, with the Form
of Exercise on the reverse hereof duly executed, accompanied by payment for the
shares of Common Stock purchased and, if required, with the Form of Assignment
on the reverse hereof or a separate instrument of transfer duly executed with
signature guaranteed. In the event that the number of Warrants so exercised is
less than the total number of Warrants represented hereby, there will be issued
to the person so exercising the Warrants, or his registered assigns, a new
Warrant Certificate representing the number of Warrants not exercised.
In the event of the liquidation, dissolution or winding-up of the
Company, in cases where the property to be distributed to the holders of Common
Stock of the Company consists principally of other than securities of another
entity which shall have purchased all or substantially all of the Company's
assets, the right to exercise Warrants shall terminate at the close of business
on the fourth full business day before the earliest date fixed for the payment
of any amount distributable on the Common Stock of the Company; provided that,
at least 45 days prior thereto, notice of such payment date shall have been
given by the Warrant Agent in writing to all registered holders of Warrant
Certificates. Warrants shall terminate and shall be of no further force and
effect at such close of business on such date.
Holders of Warrant Certificates, as such holders, shall have no voting
or any other rights of a stockholder of the Company, shall have no right, other
than the right evidenced thereby, to purchase or receive Common Stock of the
Company, shall not be entitled to subscribe to or purchase any additional or
increased stock of the Company of any class, whether now or hereafter
authorized, or obligations convertible into any class or classes of stock, or
stock of any class convertible into stock of any other
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class or classes, or obligations, stock or other securities carrying warrants
or rights to subscribe to stock of the Company of any class or classes, whether
now or hereafter authorized.
This Warrant Certificate is transferable by the registered holder in
person or by his duly authorized attorney on the books of the Company at the
office of the Warrant Agent upon surrender of this Certificate with the Form of
Assignment on the reverse hereof duly endorsed or with other appropriate
instruments of transfer duly endorsed with signature guaranteed and payment of
any transfer taxes or other governmental charges in connection with such
transfer.
This Warrant Certificate is exchangeable for Warrant Certificates of
different denominations at the office of the Warrant Agent upon surrender of
this Certificate, duly endorsed or with appropriate instruments of transfer.
Warrant Certificates issued upon transfers and exchanges shall be issued only
for full Warrants or an integral multiple thereof. Warrant Certificates which
are transferred shall be canceled.
This Warrant is not valid unless countersigned by the Warrant Agent.
Unless sooner terminated as provided herein upon exercise or upon
liquidation, dissolution or winding-up of the Company, the purchase rights
under the Warrants shall terminate on the Expiration Date and thereafter the
Warrants represented by this Certificate shall be of no further force and
effect.
WITNESS the facsimile signature of the proper officer of the Company and
its facsimile seal.
Dated:
MULTIMEDIA GAMES, INC.
By:
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Authorized Officer
ATTEST:
- ----------------------------
Secretary
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[FORM OF REVERSE SIDE OF CERTIFICATE]
FORM OF EXERCISE
The undersigned hereby irrevocably exercises _____ Warrants to subscribe for
and purchase shares of Common Stock of the within named Company evidenced by
this Warrant Certificate and herewith makes payment of the purchase price in
full. Kindly issue certificates for shares of Common Stock in accordance with
the instructions given below. The certificate for the unexercised balance of
the Warrants evidenced by the within Warrants Certificate, if any, will be
registered in the name of the undersigned.
DATED:
-------------------------
Instructions for Registration of stock
- --------------------------------------------------
Name (please print)
- --------------------------------------------------
Social Security or Other identifying Number;
ADDRESS:
- --------------------------------------------------
Street
- --------------------------------------------------
City, State and Zip Code
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Warrant Certificate)
FOR VALUE RECEIVED, _________________ hereby sells, assigns and
transfers unto
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______, Attorney, to
transfer the within Warrant Certificate on the books of the within named
Company, with full power of substitution.
Dated: Signature:
(Signature must conform in all respects
to name of the holder as specified in
the face of the Warrant certificate)
-----------------------------------------
Social Security or Tax I.D. No.
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EXHIBIT 6
MULTIMEDIA GAMES, INC.
and
CORPORATE STOCK TRANSFER,
as Warrant Agent
________________________
WARRANT AGREEMENT
Dated as of November 12, 1996
______________________
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WARRANT AGREEMENT
WARRANT AGREEMENT dated as of November 12, 1996, by and between
MULTIMEDIA GAMES, INC., a Texas corporation (the "Company"), and CORPORATE
STOCK TRANSFER, as Warrant Agent (the "Warrant Agent").
WHEREAS, as described in the Company's Confidential Private Placement
Memorandum dated September 24, 1996, the Company has issued and sold, or
proposes to issue and sell, 2,050,000 Redeemable Common Stock Purchase Warrants
(the "Warrants"), each entitling the holder thereof the right to purchase one
(1) share of Common Stock, $.01 par value, of the Company (the "Common Stock");
WHEREAS, the Company desires to provide for the form of Warrant
Certificate to evidence the Warrants and the terms and provisions applicable to
the Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance of Warrant Certificates and other matters provided for herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company hereby appoints the
Warrant Agent to act as agent for the Company in accordance with the
instructions hereinafter set forth in this Agreement, and the Warrant Agent
hereby accepts such appointment.
2. Warrant Certificates. The Warrant Certificates to be
delivered pursuant to this Agreement shall be in the form set forth in Exhibit
A attached hereto.
3. Terms and Provisions of Warrants.
3.1 General. (a) There are hereby incorporated in this Agreement all
of the terms and provisions relating to the Warrants set forth and contained in
the form of Warrant Certificate attached hereto as Exhibit A.
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(b) The Company will cause to be issued and delivered to
the registered holders of Warrant Certificates, or (subject to the next
succeeding paragraph) their registered assigns, in such name or names as may be
directed by them, duly executed certificates for the number of fully paid and
nonassessable whole shares of Common Stock to which they are entitled as herein
provided, together with a Warrant Certificate or Certificates representing any
unexercised Warrant.
No Warrant nor any of the shares of Common Stock purchasable upon the
exercise of any Warrant (each a "Warrant Share" and collectively, the "Warrant
Shares") has been registered under the Securities Act of 1933, as amended (the
"Act") or any state securities law and may not be sold, transferred, assigned,
hypothecated or otherwise disposed of until a registration statement with
respect thereto is declared effective under the Act or the Company receives an
opinion of counsel reasonably satisfactory to counsel to the Company that an
exemption from the registration requirements of the Act is available. If
permitted by the foregoing, any such sale, transfer, assignment, hypothecation
or other disposition shall be effected by the holder thereof surrendering a
Warrant for cancellation as hereinafter provided and accompanied by an opinion
of counsel satisfactory to counsel for the Company stating that an exemption
from such registration requirements is available.
(c) Each Warrant Certificate and each certificate for Warrant
Shares purchased upon the exercise thereof shall bear a legend substantially
similar to the following:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT
BE OFFERED OR SOLD EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR (2) UPON THE DELIVERY BY THE HOLDER TO THE
COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO COUNSEL
FOR THE COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER THE
ACT IS AVAILABLE
(d) The Company shall pay all taxes payable in connection
with the issue and delivery of Common Stock upon the exercise of Warrants;
provided, however, that the Company shall not be required to pay any tax in
respect of (i) any transfer involved
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in the issue and delivery of Common Stock in a name other than that of the
registered holder of the Warrant Certificate exercised, or (ii) any transfer or
exchange of Warrant Certificates in a name other than that of the registered
holder of the Warrant Certificate so transferred or exchanged.
(e) Irrespective of the date of issue and delivery of
certificates for any shares of Common Stock issuable in respect of Warrants,
each person in whose name any such certificate is to be issued shall, for all
purposes, be deemed to become a holder of record of the Common Stock
represented thereby on the date the Warrant Certificate evidencing the Warrant
or Warrants shall have been duly surrendered. Excepted as provided herein, no
dividend shall be payable on account of Common Stock deliverable in respect of
Warrants except such dividends as may be or become payable to holders of record
of such Common Stock on or after the date the Warrant Certificate evidencing
the Warrants shall have been duly surrendered.
3.2 Adjustment of Shares Issuable, Warrant Price and Number of
Warrants. (a) The purchase price per share of Common Stock purchasable
pursuant each Warrant shall be initially $8.00 (the "Exercise Price"), and the
number of shares of Common Stock purchasable upon the exercise of each Warrant
(the "Warrant Rate") shall be initially one (1) share of Common Stock of the
Company (subject to adjustment from time to time as hereinafter provided).
Upon each adjustment of the Warrant Rate, the registered owner of each Warrant
then outstanding shall thereafter be entitled, upon surrender of a Warrant for
exercise on or before [insert date which is fifth anniversary of the Initial
Closing Date] (the "Expiration Date") and payment of the adjusted Exercise
Price in respect thereof, to receive the number of shares of Common Stock, and
other property, if any, at the Warrant Rate as so adjusted.
(b) In the event the Company shall (i) pay a dividend in
shares of its capital stock, (ii) subdivide its outstanding shares of Common
Stock, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares, or (iv) issue by reclassification of its shares of Common
Stock any shares of capital stock of the Company, the Warrant Rate in effect
immediately prior thereto shall be adjusted as provided below so that the
holder of any Warrant thereafter surrendered for exercise shall be entitled to
receive the number of shares of Common Stock
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and other property, if any, which he would have been entitled to receive after
the happening of any of the events described above, had such Warrant been
exercised immediately prior to the happening of such event. An adjustment made
pursuant to this subsection 3.2(b) shall become effective as of the record date
or the effective date of any such event.
(c) In the event the Company shall issue rights or
warrants to all holders of its Common Stock entitling them for a period
expiring within 45 days after the record date mentioned below to subscribe for
or purchase shares of Common Stock at a price per share less than the current
market price per share of Common Stock (as determined in subsection 3.2(e)
below at the record date mentioned below) the number of shares of Common Stock
which shall thereafter be deliverable by the Company upon surrender for
exercise of each Warrant shall be determined by multiplying the number of
shares of Common Stock theretofore deliverable by the Company upon surrender
for exercise of each Warrant by a fraction, of which the numerator shall be the
number of shares of Common Stock outstanding on the date of issuance of such
rights or warrants plus the number of additional shares of Common Stock offered
for subscription or purchase, and of which the denominator shall be the number
of shares of Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of shares which the aggregate offering price of the
total number of shares so offered would purchase at such current market price.
Such adjustments shall be made whenever such rights or warrants are issued and
shall become effective as of the record date for the determination of
stockholders entitled to receive such rights or warrants.
(d) In the event the Company shall distribute to all
holders of its Common Stock evidences of its indebtedness or any of its assets
(excluding cash dividends or cash distributions) or rights to subscribe thereto
or to securities of the Company (excluding those referred to in subsection
3.2(c) above) then, in each such case, the number of shares of Common Stock
thereafter deliverable by the Company upon exercise of each Warrant shall be
determined by multiplying the number of shares of Common Stock therefore
deliverable by the Company upon exercise of each Warrant by a fraction, of
which the numerator shall be the current market price per share of Common Stock
(as determined in subsection 3.2(e) below) on the date of such distribution,
and of which the
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denominator shall be such current market price per share of the Common Stock,
less the then fair market value (as determined by the Board of Directors of the
Company, whose determination shall be conclusive, and described in a statement
filed with the Warrant Agent) of the portion of the assets or evidences of
indebtedness so distributed or of such subscription rights applicable to one
(1) share of the Common Stock. Such adjustment shall be made whenever any such
distribution is made and shall become effective as of the record date for the
determination of stockholders entitled to receive such distribution.
(e) For the purpose of any computation under subsections
3.2(c) and 3.2(d) above, the current market price per share of Common Stock at
any date shall be deemed to be the average of the daily closing bid and closing
asked prices for the 20 consecutive trading days ending five (5) business days
before the day in question as reported on the NASDAQ Stock Market ("NASDAQ"),
or, if the Common Stock is not listed or admitted to trading on NASDAQ, on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading, or if not listed or admitted to trading on any national
securities exchange, as reported in the over-the-counter "pink sheets";
provided that, if no such reports are available, the current market price per
share of Common Stock shall be as determined in good faith by the Board of
Directors of the Company.
(f) No adjustment in the Warrant Rate shall be required
unless such adjustment would require an increase or decrease of at least 1%
therein; provided that, any adjustments which by reason of this subsection
3.2(f) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations of the Warrant Rate
under this Section 3.2 shall be made to the nearest one-hundredth of a share.
(g) Whenever there is an adjustment in the Warrant Rate
as herein provided, the Exercise Price payable upon exercise of each Warrant
shall also be adjusted by multiplying the Exercise Price in effect immediately
prior to such adjustment of the Warrant Rate by a fraction of which the
numerator shall be the number of shares of Common Stock purchasable upon the
exercise of each Warrant immediately prior to such adjustment of the Warrant
Rate, and of which the denominator shall be the number of Shares of Common
Stock so purchasable immediately thereafter; provided that
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<PAGE> 7
if, as a result of any adjustments made pursuant hereto, the holder of each
Warrant shall become entitled to receive shares of two or more classes of
capital stock of the Company, the Board of Directors of the Company (whose
determination shall be conclusive and shall be described in a statement filed
with the Warrant Agent) shall allocate the Exercise Price in effect immediately
prior to such adjustment between or among such classes of shares and the
Exercise Price in respect of shares of each such class shall thereafter be the
price as so allocated.
(h) In the event of any consolidation of the Company with
or merger of the Company with or into another entity, or in the event of any
sale or conveyance to another entity of all or substantially all of the
property of the Company, the Company, or such successor purchasing person, as
the case may be, shall execute and deliver to the Warrant Agent an agreement,
in form satisfactory to the Warrant Agent, providing that the holder of each
Warrant then outstanding, upon surrender for exercise thereof, shall have the
right thereafter, in accordance with the terms hereof, to receive the kind and
amount, if any, of shares of stock and other securities and property receivable
upon such consolidation, merger, sale or conveyance by a holder of the number
of shares of Common Stock of the Company which would have been received by him
upon surrender for exercise of such Warrants immediately prior to such
consolidation, merger, sale or conveyance. Such agreement shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 3.2. The Company shall not effect any
such sale wherein the property to be distributed to the holders of Common Stock
consists principally of securities, or any such consolidation or merger, unless
prior to the consummation thereof adequate provision is made for the assumption
by the successor entity (if other than the Company) resulting from such
consolidation or merger or the entity purchasing such assets, of the obligation
to deliver to such holders such shares of stock, securities or assets as such
holder may be entitled to acquire in accordance with the foregoing provisions.
The provisions of this subsection 3.2(h) shall similarly apply to successive
consolidations, mergers, sales and conveyances.
Notice of the execution of such agreement shall be given by the
Company to the registered holders of Warrants within ten (10) days after the
execution of such agreement at his last address
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<PAGE> 8
appearing on the register of the Company. Failure to give any such notice, or
any defect therein, shall not affect the validity of any such consolidation,
merger, sale, or conveyance.
(i) Whenever any adjustment is made in the Warrant Rate
and the Exercise Price as herein provided, the Company shall promptly file with
the Warrant Agent an independent accountant's certificate setting forth the
effective date of such adjustment, the effect of such adjustment and a brief
statement of the facts requiring such adjustment. Such certificate shall be
conclusive evidence of the correctness of such adjustment and the Warrant Agent
(if other than the Company) shall be under no duty or responsibility with
respect to any such certificate except to exhibit the same from time to time to
any registered holder of a Warrant desiring an inspection thereof. The Company
shall promptly mail or cause to be mailed notice of each such adjustment to
each registered holder of a Warrant at his last address appearing on the
register of the Company.
(j) In the event at any time:
(1) the Company shall pay any dividend payable in
stock upon its Common Stock or make any distribution (other than regular cash
dividends paid at an established annual rate) to the holders of its Common
Stock;
(2) the Company shall offer for subscription pro
rata to the holders of its Common Stock any additional shares of stock of any
class or other rights; or
(3) there shall be any capital reorganization, or
reclassification of the capital stock of the Company, or consolidation or
merger of the Company with or sale of all or substantially all of its assets to
another corporation;
then in any one or more of said events, the Company shall give notice to each
registered holder of a Warrant Certificate of the date on which (A) the books
of the Company shall close or a record shall be taken for such dividend,
distribution or subscription rights, or (B) such reorganization,
reclassification, consolidation, merger or sale shall become effective, as the
case may be. Such notice shall also specify the date as of which the holders
of Common Stock of record shall participate in such
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<PAGE> 9
dividend, distribution or subscription rights, or shall be entitled to exchange
their Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger or sale, as the case
may be. Such notice shall be mailed to each registered holder of a Warrant
Certificate at least 45 days prior to the action in question and not less than
45 days prior to any record date or the date on which the Company's transfer
books are closed in respect thereto; provided, however, that failure to give
such notice shall not affect the validity of any such action.
3.3 Fractional Warrants and Fractional Shares. If the number of
shares purchasable upon the exercise of each Warrant is adjusted pursuant to
Section 3.2, the Company shall nonetheless not be required to issue fractions
of shares of Common Stock upon exercise of the Warrants or to distribute share
certificates which evidence fractional shares of Common Stock. In lieu of
issuing fractional shares, the Company shall be permitted to aggregate all
fractions of shares issuable upon the exercise of the Warrant Certificate (or
portion thereof) being exercised and, after such aggregation, to pay to the
holder of such Warrant Certificate cash for any remaining fractional interest
based upon the current market price of the Common Stock as determined in
accordance with Section 3.2(e) hereof.
3.4 Redemption of Warrants. The Warrants are redeemable by the
Company, in whole or in part, on not less than 30 days' prior written notice to
the registered holders thereof at a redemption price of $.10 per Warrant (the
"Warrant Redemption Price") at any time after the Exercise Date; provided that,
(i) the closing bid quotation price of the Common Stock for the 20 consecutive
trading days ending not later than the seventh day prior to the day on which
the Company gives notice of redemption has been at least 150% of the then
effective Exercise Price per share, and (ii) the Warrants and the Warrant
Shares are subject to an effective registration statement under the Act at the
time a notice of redemption is given and at all times thereafter through the
date fixed for redemption; provided further that, the condition referred to in
clause (ii) shall be deemed satisfied if the holder was afforded the right and
opportunity to include the Warrants and the Warrant Shares in any such
registration statement and declined to do so. In case of the redemption of a
part only of the outstanding Warrants, the Company shall effect such redemption
pro rata among
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<PAGE> 10
all holders of Warrants determined by multiplying the number of Warrants
represented by each Warrant Certificate by a fraction, the numerator of which
shall be the total number of Warrants to be redeemed by the Company and the
denominator of which shall be the total number of Warrants held by all holders
of Warrants. The redemption notice shall be given by mail, postage prepaid, to
the holders of record of the Warrants to be redeemed, addressed to each such
holder at its post office address as shown by the records of the Company. On
and after the date fixed for redemption and stated in such notice, each holder
of the Warrants called for redemption shall surrender the Warrant Certificate
evidencing such Warrants to the Company at the place designated in such notice
and shall thereupon be entitled to receive payment of the Warrant Redemption
Price. In case less than all the Warrants represented by any such surrendered
certificate are redeemed, a new certificate shall be issued representing the
unredeemed Warrants. If such notice of redemption shall have been duly given,
and if on or before the date fixed for redemption, funds necessary for the
redemption shall be available therefor, then, notwithstanding that the Warrant
Certificates evidencing any Warrants so called for redemption shall not have
been surrendered, all rights with respect to the Warrants so called for
redemption shall forthwith after such date cease and determine, except only the
right of the holders to receive the Warrant Redemption Price without interest
upon surrender of the Warrant Certificates therefor. Holders of Warrants shall
have the right to exercise the Warrants for the purchase of Warrant Shares
until the close of business on the date fixed for redemption.
3.5 Common Stock. As used herein the term "Common Stock" shall
mean and include the Company's Common Stock, $.01 par value, as authorized at
the date hereof, and shall also include any capital stock of any class of the
Company hereafter authorized which shall not be limited to a fixed sum or
percentage in respect of the rights of the holders thereof to participate in
dividends or in the distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding-up of the Company, and, in case of
reclassification of the outstanding shares thereof or reorganization,
consolidation, merger or sale of all or substantially all of the Company's
assets, the stock, securities or assets provided for in paragraph (h) of
Section 2 above.
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<PAGE> 11
3.6 Certain Covenants. The Company covenants that:
(a) it will at all times reserve and keep available out
of its authorized Common Stock, solely for the purpose of issue as provided by
the terms of the Warrants, such number of shares of Common Stock as shall from
time to time be issuable in accordance with the terms of the Warrants;
(b) no change in the number or class of shares issuable
upon the exercise or surrender of Warrants, and no adoption of a par value for,
or change in the par value of, any such shares, will be made, and no other
action will be taken, by it if the result of such change or action would be to
render illegal the issuance, in accordance with the terms of Warrants, of
shares of stock or other securities or property of the class or classes or kind
in the amount herein provided; and that it will not take any such action or
issue any securities without making further provisions so that thereafter there
shall be authorized and reserved for issue in accordance with the terms of
Warrants, a sufficient number or amount of shares of stock or other securities
or property, of the class or classes or kind and in the amount provided herein;
and
(c) all shares of Common Stock which may be issued in
accordance with the terms of the Warrants will upon issue be duly and validly
issued and fully paid and non-assessable and free from all taxes, liens and
charges with respect to the issue thereof.
4. Execution of Warrant Certificates. Warrant Certificates shall
be signed on behalf of the Company by its Chairman of the Board, President or a
Vice President under its corporate seal and attested by its Secretary or an
Assistant Secretary. Each such signature of the Chairman of the Board,
President or a Vice President, the Secretary or an Assistant Secretary upon the
Warrant Certificates may be in the form of a facsimile signature of the present
or any future Chairman of the Board, President, Vice President, Secretary or
Assistant Secretary and may be imprinted or otherwise reproduced on the Warrant
Certificates, and for that purpose the Company may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, 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 be Chairman of the Board,
President, Vice President,
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<PAGE> 12
Secretary or Assistant Secretary. The seal of the Company may be in the form
of a facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Warrant Certificates.
In case any officer of the Company 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 the Company, such Warrant Certificates nevertheless may be
countersigned and delivered or disposed of as though such person had not ceased
to be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Warrant Certificate, shall be a proper officer of the Company to sign such
Warrant Certificate, although at the date of the execution of this Warrant
Agreement any such person was not such officer.
Warrant Certificates shall be dated the date of countersignature by
the Warrant Agent.
5. Registration and Countersignature. Warrant Certificates shall
be registered in the names of the persons who are to be record holders of the
Warrant Certificates upon receipt thereof.
Warrant Certificates shall be manually countersigned and delivered by
the Warrant Agent upon receipt of the written order of the Company signed by
its Chairman of the Board, President, any Vice President, its Treasurer or
Secretary, and shall not be valid for any purpose unless so countersigned.
The Company and the Warrant Agent may deem and treat the registered
holder(s) of the Warrant Certificates as the absolute owner(s) thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone), for the purpose of any exercise thereof, and distribution to the
holder(s) thereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
6. Registration of Transfers and Exchanges. The Warrant Agent
shall from time to time register the transfer of any outstanding Warrant
Certificates upon the records to be maintained by it for that purpose, upon
surrender thereof accompanied (if so required by it) by a written instrument or
instruments of transfer
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<PAGE> 13
in form satisfactory to the Warrant Agent, duly executed by the registered
holder or holders thereof or by the duly appointed legal representative thereof
or by a duly authorized attorney. Upon any such registration of transfer, and
subject to the provisions of Section 3.2(a) hereof, a new Warrant Certificate
shall be issued to the transferee(s) and the surrendered Warrant Certificate
shall be canceled by the Warrant Agent. Canceled Warrant Certificates shall
thereafter be disposed of in a manner satisfactory to the Company.
Warrant Certificates may be exchanged at the option of the holder(s)
thereof, when surrendered to the Warrant Agent at its offices maintained for
that purpose, for another Warrant Certificate or other Warrant Certificates of
like tenor and representing in the aggregate a like number of Warrants.
Warrant Certificates surrendered for exchange shall be canceled by the Warrant
Agent. Such canceled Warrant Certificates shall then be disposed of in a
manner satisfactory to the Company.
The Warrant Agent is hereby authorized to countersign, in accordance
with the provisions of this Section and of Section 5 of this Agreement, the new
Warrant Certificates required pursuant to the provisions of this Section, and
any additional or substituted Warrant Certificates distributed to registered
holders of Warrant Certificates as contemplated by Sections 3.2 or 3.3 hereof.
7. Cancellation of Certificate upon Exercise of Warrants. All
Warrant Certificates surrendered upon exercise of Warrants shall be canceled by
a Warrant Agent. Such canceled Warrant Certificates shall then be disposed of
in a manner satisfactory to the Company.
8. Mutilated or Missing Warrant Certificates. In case any of the
Warrant Certificates shall be mutilated, lost, stolen or destroyed, the Company
may in its discretion issue and the Warrant Agent may countersign, in exchange
and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and in 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 the Company and the Warrant Agent of such loss, theft
or destruction of such Warrant Certificate and indemnity, if requested, also
satisfactory to them. Applicants for such substitute Warrant Certificates
shall also comply with such other
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<PAGE> 14
reasonable regulations and pay such other reasonable charges as the Company or
the Warrant Agent may prescribe.
9. Warrant Agent. The Warrant Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all which the Company and the holders of Warrant Certificates, by their
acceptance thereof, shall be bound:
(a) The Warrant Agent shall not be responsible for any
failure of the Company to comply with any of the covenants contained in this
Agreement or in the Warrant Certificates to be complied with by the Company.
(b) The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys, agents or employees, and the Warrant
Agent shall not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys, agents or employees or for any loss to the
Company resulting from such act, default, neglect or misconduct, provided
reasonable care shall have been exercised in the selection and continued
employment thereof.
(c) The Warrant Agent may consult at any time with
counsel satisfactory to it (who may be counsel for the Company), and the
Warrant Agent shall incur no liability or responsibility to the Company 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, provided the Warrant Agent shall have exercised
reasonable care in the selection and continued employment of such counsel.
(d) The Warrant Agent shall incur no liability or
responsibility to the Company or to any holder of any Warrant Certificate for
any action taken, suffered or omitted in reliance on any notice, resolution,
waiver, consent, order, 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.
(e) The Company agrees to pay to the Warrant Agent
reasonable compensation for all services rendered by the Warrant Agent in the
performance of this Agreement, to reimburse the
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<PAGE> 15
Warrant Agent for all expenses, taxes and governmental charges and other
charges of any kind and nature incurred by the Warrant Agent in the performance
of this Agreement and to indemnify the Warrant Agent and save it harmless
against any and all liabilities, including judgments, costs and counsel fees,
for anything done, suffered or omitted by the Warrant Agent in the performance
of this Agreement except as a result of the Warrant Agent's negligence or bad
faith.
(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 the Company or one or more registered holders
of Warrant Certificates 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 the Warrant Agent may consider proper, whether with or without any
such security or indemnity.
(g) The Warrant Agent and any stockholder, director,
officer or employee of the Warrant Agent may buy, sell or deal in the Warrants
or other securities of the Company, or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to or otherwise act as fully and freely as though it were not Warrant
Agent under this Agreement. Nothing herein shall preclude the Warrant Agent
from acting in any other capacity for the Company or for any other legal
entity.
(h) The Warrant Agent shall act hereunder solely as agent
and in ministerial capacities, 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 their
its own negligence or bad faith.
(i) The Warrant Agent shall not be under any
responsibility in respect to the validity of this Agreement or the execution
and delivery hereof (except the due execution and delivery hereof by the
Warrant Agent) or in respect to the validity or execution of any Warrant
Certificate (except its countersignature thereof); nor shall the Warrant Agent
by any act hereunder be deemed to make any representation or warranty as to
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<PAGE> 16
the authorization or reservation of any shares of Common Stock of the Company
to be issued pursuant to any Warrant or as to whether any such shares will,
when issued, be validly issued, fully paid and nonassessable (or as to any
liability of the holders thereof) or as to any Warrant Rate or Exercise Price
or the number or kind or amount of shares of Common Stock of the Company
issuable upon exercise of any Warrant.
(j) The Warrant Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, President, any Vice President, the Secretary or
the Treasurer of the Company, and to apply to any of them for advice or
instructions in connection with its duties, and shall not be liable for any
action taken, omitted or suffered to be taken by it in good faith in accordance
with instructions of any such officer.
(k) The Warrant Agent shall cancel any Warrant
Certificate delivered to it for exercise, in whole or in part, or delivered to
it for registration of transfer or exchange or substitution and shall deliver
to the Company from time to time or otherwise dispose of such canceled Warrant
Certificates in a manner satisfactory to the Company.
(l) Whenever in the performance of its duties under this
Agreement the Warrant Agent shall deem it necessary or desirable that any fact
or matter be proved or established by the Company prior to taking, omitting or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a statement signed by the Chairman of
the Board, President, any Vice President, the Secretary or the Treasurer of the
Company and delivered to the Warrant Agent; and such statement shall be full
warrant to the Warrant Agent for any action taken, omitted or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
statement; but in its discretion the Warrant Agent may in lieu thereof accept
other evidence of such fact or matter or may require such further or additional
evidence as it may deem reasonable.
(m) The Warrant Agent shall keep copies of this Agreement
available for inspection by registered holders of Warrant Certificates during
normal business hours at its offices.
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<PAGE> 17
10. Changes of Warrant Agent. If the Warrant Agent shall become
incapable of acting as Warrant Agent, the Company shall appoint a successor. If
the Company shall fail to make such appointment within a period of 30 days
after it has been notified in writing of such incapacity by the Warrant Agent
or by the registered holder of a Warrant Certificate, then the registered
holder of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a successor to the Warrant Agent. Pending
appointment of a successor to the Warrant Agent, either by the Company or by
such a court, the duties of the Warrant Agent shall be carried out by the
Company. After acceptance in writing of the appointment by the successor
Warrant Agent, the successor Warrant Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as a Warrant Agent without further act or deed; but the predecessor Warrant
Agent shall deliver and transfer to the successor Warrant Agent any property at
the time held by it hereunder, and execute and deliver, at the expense of the
Company, any further assurance, conveyance, act or deed necessary for the
purpose; and, upon request of any successor Warrant Agent, the Company shall
make, execute, acknowledge and deliver any and all instruments in writing for
more fully and effectually vesting in and confirming to such successor Warrant
Agent all such powers, rights, duties and responsibilities. Not later than the
effective date of such appointment the Company shall give notice thereof to the
predecessor Warrant Agent, each transfer agent for the Company's Common Stock
and each registered holder of a Warrant Certificate. Failure to give any
notice provided for in this Section, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of any Warrant
Agent or the appointment of a successor Warrant Agent, as the case may be.
11. Notices. All notices, requests and other communications
pursuant to this Agreement shall be in writing and shall be sufficiently given
or made when delivered or mailed by first-class mail, postage prepaid:
(a) if the registered holder of a Warrant Certificate, to
the address of such holder as shown in the Warrant register;
(b) if to the Company to (until another address is filed
in writing by the Company with the Warrant Agent):
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<PAGE> 18
Multimedia Games, Inc.
7335 South Lewis Avenue
Suite 204
Tulsa, Oklahoma 74136
Attention: Secretary
with a copy thereof to the Vice President - Finance; and
(c) if to the Warrant Agent to (until another address if
filed in writing by the Warrant Agent with the Company):
Corporate Stock Transfer
370 17th Street, Suite 2350
Denver, Colorado 80202
Attention: Ms. Carylyn Bell
In case the Company shall fail to maintain such an office or agency or
shall fail to give notice of the location or of any change in the location
thereof, presentation may be made and notices and demands may be served at the
office of the Warrant Agent.
12. Supplements and Amendments. The Company and the Warrant Agent
may from time to time supplement or amend this Agreement without the approval
of any holders of Warrant Certificates 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 provisions
in regard to matters or questions arising hereunder which the Company and the
Warrant Agent may deem necessary or desirable and which shall not adversely
affect the interests of the registered holders of Warrant Certificates.
13. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
14. Governing Law. This Agreement and each Warrant 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 laws of
said State.
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<PAGE> 19
15. Benefits of This Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant Certificates any legal
or equitable right, remedy or claim under this Agreement; and this Agreement
shall for the sole and exclusive benefit of the Company, the Warrant Agent and
the registered holders of the Warrant Certificates.
Any registered holder of a Warrant Certificate, without the consent of
the Warrant Agent or any other holder of a Warrant Certificate, may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company suitable to enforce, or
otherwise in respect of, his right to exercise his Warrant in the manner
provided for in the Warrant Certificates and in this Agreement.
16. Descriptive Heading. The descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
17. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
MULTIMEDIA GAMES, INC.
By
------------------------------------
CORPORATE STOCK TRANSFER
By
------------------------------------
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<PAGE> 1
EXHIBIT 7
AMENDMENT TO WARRANT AGREEMENT
THIS AMENDMENT (the "Amendment") is entered into as of the 18th day of
July, 1997, by and between MULTIMEDIA GAMES, INC., a Texas corporation (the
"Company"), and CORPORATE STOCK TRANSFER, as Warrant Agent (the "Warrant
Agent").
WHEREAS, the Company and the Warrant Agent are parties to that certain
Warrant Agreement dated November 12, 1996 (the "Agreement");
WHEREAS, the Company has received the consent of the holders of the
Company's Redeemable Common Stock Purchase Warrants (the "Original Warrants")
to amend the terms of the Warrants; and
WHEREAS, the parties desire to amend the Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
1. Creation of Class A and Class B Warrants. The Original Warrants
shall be divided into two classes; Redeemable Class A Common Stock Purchase
Warrants (the "Class A Warrants") and Redeemable Class B Common Stock Purchase
Warrants (the "Class B Warrants"). The Original Warrants shall be amended as
follows:
(a) Class A Warrants.
(i) the first date upon which the Class A Warrants would
become exercisable would be extended from August 12, 1997
until November 7, 1997; and
(ii) the first date upon which the Class A Warrants could be
redeemed by the Company would be extended from August 12, 1997
until November 7, 1997.
(b) Class B Warrants.
(i) the first date upon which the Class B Warrants would
become exercisable would be extended from August 12, 1997
until November 7, 1997; and
(ii) the first date upon which the Class B Warrants would
become exercisable would be extended from August 12, 1997
until February 7, 1999.
<PAGE> 2
Except as expressly set forth above, all of the other terms of Original
Warrants shall apply to the Class A Warrants and the Class B Warrants,
including without limitation, the $8.00 per share exercise price and the
conditions the Company must satisfy in order to redeem the Class A Warrants
and/or Class B Warrants.
2. Amendment to Warrant Certificates. In order to reflect the
amendments outlined in Section 1 above, the Original Warrant certificates shall
be amended to designate the warrants as Class A Warrants or Class B Warrants.
The Class A Warrant certificates shall be amended so that (a) the Exercise Date
is November 7, 1997 and (b) the date upon which the Company may redeem the
Class A Warrants is November 7, 1997. November 7, 1997 shall be designated as
the "Redemption Date" for purposes of the Class A Warrants. The Class B
Warrant certificates shall be amended so that (a) the Exercise Date is November
7, 1997 and (b) the date upon which the Company may redeem the Class B Warrants
is February 7, 1999. February 7, 1999 shall be designated as the "Redemption
Date for purposes of the Class B Warrants.
3. Amendment to Warrant Agreement. Because the Exercise Date and
the date upon which the Company may redeem the Class A Warrants and the Class B
Warrants (the "Redemption Date") are no longer the same date, Section 3.4 of
the Agreement shall be amended so that "Exercise Date" is replaced with
"Redemption Date."
4. Restatement of Agreement. Except as amended herein, the Agreement
shall remain in full force and effect. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and any successors and assigns
of such parties.
IN WITNESS WHEREOF, the parties hereto have cause a duly authorized
representative to execute this Amendment as of the date and year first written
above.
MULTIMEDIA GAMES, INC.
By:
-----------------------------------
CORPORATE STOCK TRANSFER
By:
-----------------------------------
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EXHIBIT 8
DESCRIPTION OF SECURITIES
The Company is authorized to issue 25,000,000 shares of Common Stock, par
value $.01 per share, and 2,000,000 shares of Preferred Stock, par value $10 per
share. As of June 30, 1997, there were 4,303,990 shares of Common Stock
outstanding, 109,192 shares of Series A Preferred Stock issued and outstanding,
1,518,833 Class A Warrants issued and outstanding and 523,310 Class B Warrants
issued and outstanding.
COMMON STOCK
Subject to the rights of the holders of any shares of Preferred Stock which
may be issued in the future, and subject to the rights of the holders of Series
A Preferred Stock to elect a majority of the Board of Directors in the event the
Company is in arrears in the payment of two consecutive quarterly dividend
payments, holders of shares of Common Stock and holders of shares of the Series
A Preferred Stock, voting together as a single class, are entitled to cast one
vote for each share of Common Stock and Series A Preferred Stock held at all
stockholders' meetings for virtually all purposes, including the election of
directors. Directors are elected each year at the Company's annual meeting of
stockholders to serve for a period of one year and until their respective
successors have been duly elected and qualified.
Common stockholders have the right to share ratably in such dividends on
shares of Common Stock as may be declared by the Board of Directors out of funds
legally available therefor. Upon liquidation or dissolution, each outstanding
share of Common Stock will be entitled to share equally in the assets of the
Company legally available for distribution to stockholders after the payment of
all debts and other liabilities, subject to any superior rights of the holders
of Preferred Stock. The Series A Preferred Stock has a preference in liquidation
of $10 per share.
Common stockholders have no preemptive rights. There are no conversion or
redemption privileges or sinking fund provisions with respect to the Common
Stock. All of the outstanding shares of Common Stock are, and all of the shares
of Common Stock offered hereby will be, validly issued, fully paid and
nonassessable. The Common Stock does not have cumulative voting rights so
holders of more than 50% of the outstanding Common Stock can elect 100% of the
Directors of the Company if they choose to do so, subject to the rights of the
holders of outstanding Series A Preferred Stock as described above.
PREFERRED STOCK
The Board of Directors is authorized to issue shares of Preferred Stock,
$10 par value per share, from time to time in one or more series. The Board may
issue a series of Preferred Stock having the right to vote on any matter
submitted to stockholders, including, without limitation, the right to vote by
itself as a series, or as a class together with any other or all series of
Preferred Stock. The Board of Directors may determine that the holders of
Preferred Stock voting as a class will have the right to elect one or more
additional members of the Board of Directors, or the majority of the members of
the Board of Directors. The Board of Directors has designated a series of
Preferred Stock as Series A Preferred Stock which has the right to elect a
majority of the Board of Directors in the event the Company is in arrears in the
payment of two consecutive quarterly dividend payments.
The Board of Directors may also grant to holders of any series of Preferred
Stock preferential rights to dividends and amounts payable in liquidation.
Furthermore, the Board of Directors may determine whether the shares of any
series of Preferred Stock may be convertible into Common Stock or any other
series of Preferred Stock of the Company at a specified conversion price or
rate, and upon other terms and conditions as determined by the Board of
Directors.
SERIES A PREFERRED STOCK
The Board of Directors has designated 109,192 shares of Preferred Stock as
Series A Preferred Stock, of which 80,175 shares are held by Gordon Graves, the
Chairman and Chief Executive Officer of the Company, and his affiliated company,
and an aggregate of 3,176 shares are held by four other officers or directors of
the Company. The holders of the Series A Preferred Stock have the right to elect
a majority of the Board of Directors in the event the Company is in arrears in
the payment of two consecutive quarterly dividend payments. The
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Series A Preferred Stock bears dividends at the rate of $.275 per quarter
payable on January 1, April 1, July 1 and October 1 of each year. The Series A
Preferred Stock is convertible into Common Stock at the rate of five shares of
Common Stock for each one share of Series A Preferred Stock. The Series A
Preferred Stock has a preference on liquidation of $10 per share plus accrued
and unpaid dividends and is redeemable by the Company for $10 per share plus
accrued and unpaid dividends under certain circumstances.
LOCK-UP AGREEMENTS
In connection with the transactions pursuant to which certain of the
Selling Securityholders acquired the Securities offered hereby, virtually all of
the Selling Securityholders and each of the officers, directors and certain
holders (directly and indirectly) of one percent (1%) or more of the Company's
Common Stock agreed with Walsh Manning not to sell the Securities or any other
securities of the Company then held by such persons until June 22, 1998 (or
November 22, 1998, in the case of such officers, directors and 1% holders). See
Note 5 of the Notes to the Selling Securityholder table.
WARRANTS
Terms. Each Warrant entitles the holder thereof to purchase one share of
Common Stock from the Company at an exercise price equal to $8.00 per share,
subject to adjustment in certain circumstances. The Warrants become exercisable
on November 7, 1997, and unless exercised, will automatically expire on November
12, 2001.
Registration Rights. In connection with the transactions pursuant to which
the Selling Securityholders acquired the Securities offered hereby, the Company
agreed to notify the holders (the "Holders") of the Securities of the filing of
the Registration Statement of which this Prospectus forms a part, and to include
the Securities in such Registration Statement at the request of such Holder. In
addition, commencing on April 7, 1997, Walsh Manning or the holders on a
combined basis of a majority of the Securities may demand that the Company file
a Registration Statement covering the Securities. Either action is to be taken
at the Company's expense except for brokerage commissions, transfer taxes and
the fees of counsel to the Holders.
The Company is required only to use its best efforts to cause the
Securities covered by the Registration Statement to be registered or otherwise
qualified for sale in the states designated by the Holders. It may in fact not
be practicable to qualify the Securities for sale in every state in which a
Holder resides. Accordingly, it is possible that the substantial restrictions on
the transferability of the Securities will continue, even after registration.
See "Risk Factors -- Current Prospectus and State Registration Required to
Exercise Warrants."
The registration rights of the Holders expire on November 12, 2001.
Redemption. The Warrants are redeemable, in whole or in part, at the option
of the Company, at $.10 per Warrant, upon not less than 30 days prior written
notice, at any time after November 7, 1997, in the case of the Class A Warrants,
and at any time after February 7, 1999, in the case of the Class B Warrants;
provided that (i) the closing bid price quotation of the Company's Common Stock
is at least 150% of the then exercise price of the Warrant on each of the 20
trading days ending not later than the seventh trading day prior to the day on
which notice of redemption is given; and (ii) the Warrants and the Shares have
been registered under the Securities Act.
Warrant Agreement. The Warrants are issued pursuant to a Warrant Agreement
between the Company and Corporate Stock Transfer, Denver, Colorado, as warrant
agent, and are subject to the terms and provisions thereof.
TRANSFER AGENT AND WARRANT AGENT
The Transfer Agent for the Company's Common Stock is Corporate Stock
Transfer, Denver, Colorado.
The Warrant Agent for the Warrants is Corporate Stock Transfer, Denver,
Colorado.
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