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Exhibit 10.49
THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES ACT, AND MAY NOT BE
TRANSFERRED WITHOUT REGISTRATION UNDER SUCH
ACTS OR PURSUANT TO AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE
COMMON STOCK
Series G No. 3
TRANS WORLD GAMING CORP.
(a Nevada corporation)
Dated: October 15, 1999
THIS CERTIFIES that Geoffrey B. Baker (together with its successors
or permitted assigns, the "Holder") is entitled to purchase from Trans World
Gaming Corp., a Nevada corporation ("Company") up to 41,691 shares of the
Company's common stock, par value $.001 per share (the "Common Stock"), at a
purchase price of $.01 per share of Common Stock (the "Warrant Price"),
subject to adjustment as hereafter provided.
This Warrant is issued pursuant to that certain Subscription
Agreement dated as of October 15, 1999 (the "Agreement"), between the Company
and the Holder.
1. EXERCISE OF THE WARRANT.
The rights represented by this Warrant may be exercised at any time
on or before 5:00 p.m., New York time, on March 31, 2008, in whole or in part,
by (i) the surrender of this Warrant (with the purchase form at the end hereof
properly executed) at the principal executive office of the Company (or such
other office or agency of the Company as it may designate by notice in writing
to the Holder at the address of the Holder appearing on the books of the
Company); (ii) payment to the Company of the Warrant Price then in effect for
the number of shares of
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Common Stock specified in the above-mentioned purchase form together with
applicable stock transfer taxes, if any; and (iii) delivery to the Company of
a duly executed agreement signed by the person(s) designated in the purchase
form to the effect that such person(s) agree(s) to be bound by the provisions
of Paragraph 5 and subparagraph (b), (c) and (d) of Paragraph 6 hereof. This
Warrant shall be deemed to have been exercised, in whole or in part to the
extent specified, immediately prior to the close of business on the date this
Warrant is surrendered and payment is made in accordance with the foregoing
provisions of this Paragraph 1, and the person or persons in whose name or
names the certificates for the Common Stock shall be issuable upon such
exercise shall become the Holder or Holders of record of such Common Stock at
that time and date. The Common Stock so purchased shall be delivered to the
Holder within a reasonable time, not exceeding ten (10) business days, after
the rights represented by this Warrant shall have been so exercised. If at any
time this Warrant is exercised as to less than the total number of shares for
which it may be exercised, and this Warrant shall not have expired, the
Company shall promptly issue to the Holder a new Warrant identical in form as
to this Warrant as to the remaining shares hereunder.
2. TRANSFER.
Subject to the legend set forth at the top of the first page hereof,
this Warrant may be assigned in whole or in part by the Holder by (i)
completing and executing the form of assignment at the end hereof and (ii)
surrendering this Warrant with such duly completed and executed assignment
form for cancellation, accompanied by funds sufficient to pay any transfer
tax, at the office or agency of the Company referred to in Paragraph 9(b),
hereof; whereupon the Company shall issue, in the name or names specified by
the Holder (including the Holder) a new Warrant or Warrants of like tenor and
representing in the aggregate rights to purchase the same number of shares of
Common Stock as are then purchasable hereunder.
3. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees that all Common Stock
and Common Stock issuable upon exercise of this Warrant will, upon issuance,
be duly and validly issued, fully paid and nonassessable and no personal
liability will, for Company obligations, attach to the holder thereof by
reason of being such a holder, other than as set forth herein.
(b) The Company covenants and agrees that during the period
within which this Warrant may be exercised, the Company will at all times have
authorized and reserved a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
4. NO RIGHTS OF STOCKHOLDER.
This Warrant shall not entitle the Holder to any voting rights or
other rights as a stockholder of the Company, either at law or in equity, and
the rights of the Holder are limited to
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those expressed in this Warrant and are not enforceable against the Company
except to the extent set forth herein.
5. REGISTRATION.
(a) The Holder shall have the right to have the shares of
Common Stock underlying this Warrant registered as part of the next public
offering of the Common Stock. Upon the written request of any combination of
the holders of Common Stock or of Warrants issued by the Company and
collectively exercisable into not less than 100,000 shares of Common Stock (as
such number may be adjusted under Paragraph 7), and on a one-time basis, the
Company shall file, within ninety (90) days after written request such
registration, and use its best efforts to cause to be declared effective
ninety (90) days thereafter, by the Securities and Exchange Commission, a
registration statement or post-effective amendment thereto as permitted under
the Securities Act of 1933, as amended (the "Act"), covering the sale by the
Holder of the Common Stock issuable upon exercise of this Warrant or any
portion hereof (the "Registerable Securities"). The Company shall supply
prospectuses in order to facilitate the public sale or other disposition of
the Registerable Securities, use its best efforts to register and qualify any
of the Registerable Securities for sale in such states as such Holder
reasonably designates and do any and all other acts and things which may be
necessary to enable such Holder to consummate the public sale of the
Registerable Securities, and furnish indemnification in the manner provided in
Paragraph 6 hereto. The Holder shall furnish information reasonably requested
by the Company in accordance with such post-effective amendments or
registration statements, including its intentions with respect thereto, and
shall furnish indemnification as set forth in Paragraph 6.
(b) The Company will maintain such registration statement or
post-effective amendment current and effective under the Act until two years
following the expiration of the exercisability of this Warrant, or until
shares owned by the Holder are eligible for sale without restriction under
Rule 144.
(c) The Company shall bear the entire cost and expense of
any registration of securities under Paragraph 5 hereof. Notwithstanding the
foregoing, any Holder whose Registerable Securities are included in any such
registration statement pursuant to this Paragraph 5 shall, however, bear the
fees of any counsel retained by him and any transfer taxes or underwriting
discounts or commissions applicable to the Registerable Securities sold by him
pursuant thereto.
(d) In addition the Company shall:
(i) furnish to the Holder such numbers of copies of
a summary prospectus or other prospectus, including a preliminary prospectus
or any amendment or supplement to any prospectus, in conformity with the
requirements of the 1933 Act, and such
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other documents, as the Holder may reasonably request in order to facilitate
the public sale or other disposition of the securities owned by the Holder;
(ii) use its best efforts to register and qualify
the securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the Holder shall
reasonably request, and do any and all other acts and things which may be
necessary or advisable to enable such Holder to consummate the public sale or
other disposition in such jurisdictions of the securities owned by such
Holder, except that the Company shall not for any such purpose be required to
qualify to do business as a foreign corporation in any jurisdiction wherein it
is not so qualified or to file therein any general consent to service of
process;
(iii) use its best efforts to list such securities
on any securities exchange on which any securities of the Company is then
listed, if the listing of such securities is then permitted under the rules of
such exchange;
(iv) enter into and perform its obligations under
an underwriting agreement, if the offering is an underwritten offering, in
usual and customary form, with the managing underwriter or underwriters of
such underwritten offering;
(v) notify the Holder of Registrable Securities
covered by such registration statement, at any time when a prospectus relating
thereto covered by such registration statement is required to be delivered
under the 1933 Act, of the happening of any event of which it has knowledge as
a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing; and
(vi) furnish, at the request of the Holder on the
date such Registrable Securities are delivered to the underwriters for sale
pursuant to such registration or, if such Registrable Securities are not being
sold through underwriters, on the date the registration statement with respect
to such Registrable Securities becomes effective, (i) an opinion, dated such
date, of the counsel representing the Company for the purpose of such
registration, addressed to the underwriters, if any, and to the Holder making
such request, covering such legal matters with respect to the registration in
respect of which such opinion is being given as the Holder of such Registrable
Securities may reasonably request and are customarily included in such an
opinion and (ii) letters, dated, respectively, (1) the effective date of the
registration statement and (2) the date such Registrable Securities are
delivered to the underwriters, if any, for sale pursuant to such registration,
from a firm of independent certified public accountants of recognized standing
selected by the Company, addressed to the underwriters, if any, and to the
Holder making such request, covering such financial, statistical and
accounting matters with respect to the registration in respect of which such
letters are being given as the Holder of such Registrable Securities may
reasonably request and are customarily included in such letters; and
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(vii) take such other actions as shall be
reasonably requested by any Holder to facilitate the registration and sale of
the Registrable Securities.
6. INDEMNIFICATION.
(a) Whenever pursuant to Paragraph 5 a registration
statement relating to any Registerable Securities is filed under the Act,
amended or supplemented, the Company will indemnify and hold harmless each
Holder of the Registerable Securities covered by such registration statement,
amendment or supplement (such holder hereinafter referred to as the
Distributing Holder), each person, if any, who controls (within the meaning of
the Act) the Distributing Holder, and each officer, director, employee,
partner or agent of the Distributing Holder, and each underwriter (within the
meaning of the Act) of such securities and each person, if any, who controls
(within the meaning of the Act) any such underwriter and each officer,
director, employee, agent or partner of such underwriter against any losses,
claims, damages or liabilities joint or several, to which the Distributing
Holder, any such underwriter or any other person described above may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any such registration statement or any preliminary prospectus or final
prospectus constituting a part thereof or any amendment or supplement thereto,
or arise out of or are based upon the omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and will reimburse the Distributing Holder and each such
underwriter or such other person for any legal or other expenses reasonably
incurred by the Distributing Holder, or underwriter or such other person, in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case (i) to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in said registration statement, said
preliminary prospectus, said final prospectus or said amendment or supplement
in reliance upon and in conformity with written information furnished by such
Distributing Holder, any other Distributing Holder or any such an underwriter
or any other such person for use in the preparation thereof, and (ii) such
losses, claims, damages or liabilities arise out of or are based upon any
actual or alleged untrue statement or omission made in or from any preliminary
prospectus, but corrected in the final prospectus, as amended or supplemented.
(b) Whenever pursuant to Paragraph 5 a registration
statement relating to the Registerable Securities is filed, amended or
supplemented under the Act, the Distributing Holder will indemnify and hold
harmless the Company and each underwriter, each of their respective directors,
each of their respective officers, employees, partners and agents thereto, and
each person, if any, who controls the Company (within the meaning of the Act)
against any losses, claims, damages or liabilities to which the Company or any
such director, officer, employees, partners and agents or controlling person
may become subject under the Act or otherwise, insofar
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as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in any such registration statement or any preliminary
prospectus or final prospectus constituting a part thereof, or any amendment
or supplement thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent that such untrue statement or
alleged untrue statement or omission was made in said registration statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information
furnished by such Distributing Holder for use in the preparation thereof; and
will reimburse the Company or any such director, officer, employees, partners
and agents or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under
this Paragraph 6 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any
indemnifying party, give the indemnifying party notice of the commencement
thereof; but the omission to so notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise
than under this Paragraph 6.
(d) In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnified party will be entitled to participate in, and , to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof with counsel reasonably
satisfactory to such indemnifying party, and after notice from the indemnified
party to such indemnifying party of its election to so assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Paragraph 6 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
7. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SECURITIES.
(a) The Warrant Price shall be subject to adjustment from
time to time as follows:
(i) In case the Company shall at any time after
the date hereof pay a dividend in shares of
Common Stock or make a distribution in shares
of Common Stock, then upon such dividend or
distribution the Warrant Price in effect
immediately prior to such dividend or
distribution shall forthwith be reduced to a
price determined by dividing:
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(A) an amount equal to the total number of
shares of Common Stock outstanding
immediately prior to such dividend or
distribution multiplied by the Warrant
Price in effect immediately prior to
such dividend or distribution, by
(B) the total number of shares of Common
Stock outstanding immediately after
such issuance or sale.
For the purposes of any computation to be made in accordance
with the provision of this clause (i), the following provisions shall be
applicable: Common Stock issuable by way of dividend or other distribution on
any stock of the Company shall be deemed to have been issued immediately after
the opening of business on the date following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution.
(ii) In case the Company shall at any time subdivide
or combine the outstanding Common Stock, the
Warrant Price shall forthwith be
proportionately decreased in the case of
subdivision or increased in the case of
combination. Any such adjustment shall become
effective at the time such subdivision or
combination shall become effective.
(iii) In case the Company shall at any time or from
time to time issue or sell shares of Common
Stock (or securities convertible into or
exchangeable for shares of Common Stock, or any
options, warrants or other rights to acquire
shares of Common Stock) at a price per share
less than the Market Price per share of Common
Stock (treating the price per share of any
security exchangeable or exercisable into
Common Stock as equal to (x) the sum of the
price for such security convertible,
exchangeable or exercisable into Common Stock
plus any additional consideration payable
(without regard to any anti-dilution
adjustments) upon the conversion, exchange or
exercise of such security into Common Stock
divided by (y) the number of shares of Common
Stock initially underlying such convertible,
exchangeable or exercisable security), other
than issuance or sales of Common Stock pursuant
to any employee benefit plan, then, and in each
such case, the number of shares of Common Stock
thereafter purchasable upon exercise of a
Warrant shall be determined by multiplying the
number of shares of Common Stock theretofore
purchasable upon exercise of each Warrant by a
fraction (A) the numerator of which shall be
the sum of the number of shares of Common Stock
outstanding on such date plus the number of
additional shares of Common Stock issued (or
the maximum number into which such convertible
or
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exchangeable securities initially may convert
or exchange or for which such options, warrants
or other rights initially may be exercised) and
(B) the denominator of which shall be the sum
of the number of shares of Common Stock
outstanding on such date plus the number of
shares of Common Stock which the aggregate
consideration for the total number of such
additional shares of Common Stock so issued (or
into which such convertible or exchangeable
securities may convert or exchange or for which
such options, warrants or other rights may be
exercised plus the aggregate amount of any
additional consideration initially payable upon
conversion, exchange or exercise of such
security) would purchase at the Market Price
per share of Common Stock on such date. Such
adjustment shall be made whenever such shares,
securities, options, warrants or other rights
are issued, and shall become effective
retroactively immediately after the close of
business on the record date for the
determination of stockholders entitled to
receive such shares, securities, options,
warrants or other rights; PROVIDED, that the
determination as to whether an adjustment is
required to be made pursuant to this Section
7(a) shall only be made upon the issuance of
such shares or such convertible or exchangeable
securities, options, warrants or other rights,
and not upon the issuance of the security into
which such convertible or exchangeable security
converts or exchanges, or the security
underlying such option, warrant or other right.
Notwithstanding the foregoing, in the event of
such issuance or sale of Common Stock at a cash
price less than the Market Price, no such
adjustment under this Section 7(a) need be made
to the number of shares underlying the Warrant
unless such adjustment would require an
increase or decrease of at least 1% of the
number of shares underlying the Warrant. Any
lesser adjustment shall be carried forward and
shall be made at the time of and together with
the next subsequent adjustment which, together
with any adjustment or adjustments so carried
forward, shall amount to an increase or
decrease of at least 1% of number of shares
underlying the Warrant. For the purpose of this
Agreement, the term "Market Price" shall mean
(i) if the Common Stock is traded in the
over-the-counter market or on the National
Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ"), the
average per share closing prices of the Common
Stock on the 20 consecutive trading days
immediately preceding the date in question as
reported by NASDAQ or an equivalent generally
accepted reporting service, or (ii) if the
Common Stock is traded on a national securities
exchange, the average for the 20
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consecutive trading days immediately preceding
the date in question of the daily per share
closing prices of the Common Stock on the
principal stock exchange on which it is listed,
as the case may be. The closing price referred
to above shall be the last reported sales price
or in case no such reported sale takes place on
such day, the average of the reported closing
bid and asked prices, in either case on the
national securities exchange or automated
quotation system on which the Common Stock is
then listed. Whenever the number of shares of
Common Stock purchasable upon exercise of each
Warrant is adjusted, the Warrant Price for each
share of Common Stock payable upon exercise of
each Warrant shall be adjusted by multiplying
such Warrant Price immediately prior to such
adjustment by a fraction, the numerator of
which shall be the number of shares of Common
Stock purchasable upon the exercise of each
Warrant immediately prior to such adjustment
and the denominator of which shall be the
number of shares of Common Stock purchasable
immediately after such adjustment.
(iv) Within a reasonable time after the close of each
quarterly fiscal period of the Company during
which the Warrant Price or number of shares
issuable upon exercise of this Warrant has been
adjusted as herein provided, the Company shall
deliver to the Holder a certificate signed by
the President or Vice President of the Company
and by the Treasurer or Assistant Treasurer or
the Secretary or an Assistant Secretary of the
Company, showing in detail the facts requiring
all such adjustments occurring during such
period and the Warrant Price after each such
adjustment.
(b) In the event that the number of outstanding shares of
Common Stock is increased by a stock dividend or distribution payable in
Common Stock or by a subdivision of the outstanding Common Stock, then, from
and after the record date thereof, by reason of such dividend, distribution or
subdivision, the number of shares of Common Stock issuable upon the exercise
of the Warrant shall be increased in proportion to such increase in
outstanding shares. In the event that the number of shares of Common Stock
outstanding is decreased by a combination of the outstanding Common Stock,
then, from and after the record date thereof, the number of shares of Common
Stock issuable upon the exercise of the Warrant shall be decreased in
proportion to such decrease in the outstanding shares of Common Stock.
(c) In case of any reorganization or reclassification of the
outstanding Common Stock (other than a change in par value, or from par value
to no par value, or as a result of a subdivision or combination), or in case
of any consolidation of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger in which the
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Company is the continuing corporation and which does not result in any
reclassification of the outstanding Common Stock), or in case of any sale or
conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety, the holder of the Warrant then
outstanding shall thereafter have the right to purchase the kind and amount of
shares of common stock and other securities and property receivable upon such
reorganization, reclassification, consolidation, merger, sale or conveyance by
a holder of the number of shares of Common Stock which the holder of the
Warrant shall then be entitled to purchase; such adjustments shall apply with
respect to all such changes occurring between the date of this Warrant
Agreement and the date of exercise or expiration of the Warrant.
(d) Subject to the provisions of this Section, in case the
Company shall, at any time prior to the exercise of the Warrant, desire to
declare a dividend or make any distribution of its assets to holders of its
Common Stock, whether as a liquidating or a partial liquidating dividend or
for any other purpose, the Company shall provide the holder of the Warrant
with written notice of such intent not less than thirty (30) days prior to the
record date to determine holders of Common Stock entitled to receive such
distribution and the holder of this Warrant shall have until 5:00 p.m. EST on
the twentieth (20th) day following the actual receipt of such notice to elect
whether to exercise this Warrant in accordance with the terms herein. In the
event of proper election to exercise the Warrant, the holder of this Warrant
shall be deemed to be a holder of Common Stock as of the record date for such
distribution. Should the holder of the Warrant elect to exercise his Warrant
within 20 days after the record date for the determination of those holders of
Common Stock entitled to such dividend or distribution, he shall be entitled
to receive for the Warrant Price per Warrant, in addition to each share of
Common Stock, the amount of such distribution (or, at the option of the
Company, a sum equal to the value of any such assets at the time of such
distribution as determined by the Board of Directors of the Company in good
faith), which would have been payable to the holder had he been the holder of
record of the Common Stock receivable upon exercise of his Warrant on the
record date for the determination of those entitled to such distribution.
(e) In case of the dissolution, liquidation or winding-up of
the Company, all rights under the Warrant shall terminate on a date fixed by
the Company, such date to be no earlier than ten (10) days prior to the
effectiveness of such dissolution, liquidation or winding-up and not later
than five (5) days prior to such effectiveness. Notice of such termination of
purchase rights shall be given to the last registered holder of this Warrant,
as the same shall appear on the books of the Company, by registered mail at
least thirty (30) days prior to such termination date.
(f) In case the Company shall, at any time prior to the
expiration of this Warrant and prior to the exercise thereof, offer to the
holders of its Common Stock any rights to subscribe for additional shares of
any class of the Company, then the Company shall give written notice thereof
to the last registered holder hereof not less than thirty (30) days prior to
the date on which the books of the Company are closed or a record date is
fixed for the determination of the stockholders entitled to such subscription
rights. Such notice shall specify the date as to which
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the books shall be closed or record date fixed with respect to such offer of
subscription and the right of the holder hereof to participate in such offer
of subscription shall terminate if this Warrant shall not be exercised on or
before the date of such closing of the books or such record date.
(g) Any adjustment pursuant to the aforesaid provisions
shall be made on the basis of the number of shares of Common Stock which the
holder thereof would have been entitled to acquire by the exercise of the
Warrant immediately prior to the event giving rise to such adjustment.
(h) Irrespective of any adjustment in the Warrant Price or
the number or kind of shares purchasable upon exercise of this Warrant,
Warrants previously or hereafter issued may continue to express the same price
and number and kind of shares as are stated in this Warrant.
(i) The Company shall retain a firm of independent public
accountants (who may be any such firm regularly employed by the Company) to
make any computation required under this Section.
(j) If at any time, as a result of an adjustment made
pursuant to this Paragraph 7, the Holder of this Warrant shall become entitled
to purchase any securities other than shares of Common Stock, thereafter the
number of such securities so purchasable upon exercise of each Warrant and the
Warrant Price for such shares shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Common Stock.
8. FRACTIONAL SHARES.
The Company shall not be required to issue fractions of shares of
Common Stock on the exercise of this Warrant; provided, however, that if a
Holder exercises all the Warrants held of record by such Holder, the
fractional interests shall be eliminated by rounding any fraction up to the
nearest whole number of shares, if the fraction is equal to or greater than
.5, and down if the fraction is less than .5.
9. MISCELLANEOUS.
(a) This Warrant shall be governed by and in accordance with
the laws of the State of New York.
(b) All notices, requests, consents and other communications
hereunder shall be made in writing and shall be deemed to have been duly made
when delivered, or mailed by registered or certified mail, return receipt
requested: (i) if to a Holder, to the address of such Holder as shown on the
books of the Company, or (ii) if to the Company, One Penn Plaza, Suite 1503,
New York, NY 10119.
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(c) All the covenants and provisions of this Warrant by or
for the benefit of the Company and the Holders inure to the benefit of their
respective successors and assigns hereunder.
(d) Nothing in this Warrant other than Section 6 shall be
construed to give to any person or corporation other than the Company and the
registered Holder or Holders, any legal or equitable right, and this Warrant
is for the sole and exclusive benefit of the Company and the Holder or Holders.
IN WITNESS WHEREOF, Trans World Gaming Corp. has caused this
Warrant to be signed by its duly authorized officer and this Warrant to be
dated October 15, 1999.
TRANS WORLD GAMING CORP.
By:
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Its:
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FORM OF
NOTICE OF EXERCISE
(To be executed upon partial or full
exercise of the Warrants represented hereby)
The undersigned registered Holder of the Warrants represented by the attached
Warrant Certificate irrevocably exercises such Warrant for and purchases
______________________ (___________) shares of Common Stock of Trans World
Gaming Corp. (the "Company").
The undersigned herewith makes payment therefore in the amount of $
____________, consisting of $ ____________ by wire transfer or certified or
cashiers' check at a price of $_____ per share and requests that a certificate
(or certificates) in denominations of ______________ (___________) shares of
Common Stock of the Company hereby purchased be issued in the name of and
delivered to the undersigned or such designee of the undersigned and, if such
shares of Common Stock (together with any shares issued upon exercise of other
Warrants or replacement Warrants) shall not include all of the shares of
Common Stock issuable upon exercise of all Warrants represented by such
Warrant Certificate (or if a new or replacement Warrant is otherwise to be
provided pursuant to the Warrant Certificate), that a new or replacement
Warrant Certificate of like tenor for the number of Warrants not being
exercised (and not being surrendered) hereunder be issued in the name of and
delivered to the undersigned, whose address is __________________________.
Dated: __________ .
--------------------------------
(Signature of Registered Holder)
By:
-----------------------------
Title:
--------------------------
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THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES ACT, AND MAY NOT BE
TRANSFERRED WITHOUT REGISTRATION UNDER SUCH
ACTS OR PURSUANT TO AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE
COMMON STOCK
Series G No. 4
TRANS WORLD GAMING CORP.
(a Nevada corporation)
Dated: October 15, 1999
THIS CERTIFIES that Julio E. Heurtematte Jr. (together with its
successors or permitted assigns, the "Holder") is entitled to purchase from
Trans World Gaming Corp., a Nevada corporation ("Company") up to 41,691 shares
of the Company's common stock, par value $.001 per share (the "Common Stock"),
at a purchase price of $.01 per share of Common Stock (the "Warrant Price"),
subject to adjustment as hereafter provided.
This Warrant is issued pursuant to that certain Subscription
Agreement dated as of October 15, 1999 (the "Agreement"), between the Company
and the Holder.
1. EXERCISE OF THE WARRANT.
The rights represented by this Warrant may be exercised at any time
on or before 5:00 p.m., New York time, on March 31, 2008, in whole or in part,
by (i) the surrender of this Warrant (with the purchase form at the end hereof
properly executed) at the principal executive office of the Company (or such
other office or agency of the Company as it may designate by notice in writing
to the Holder at the address of the Holder appearing on the books of the
Company); (ii) payment to the Company of the Warrant Price then in effect for
the number of shares of
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Common Stock specified in the above-mentioned purchase form together with
applicable stock transfer taxes, if any; and (iii) delivery to the Company of
a duly executed agreement signed by the person(s) designated in the purchase
form to the effect that such person(s) agree(s) to be bound by the provisions
of Paragraph 5 and subparagraph (b), (c) and (d) of Paragraph 6 hereof. This
Warrant shall be deemed to have been exercised, in whole or in part to the
extent specified, immediately prior to the close of business on the date this
Warrant is surrendered and payment is made in accordance with the foregoing
provisions of this Paragraph 1, and the person or persons in whose name or
names the certificates for the Common Stock shall be issuable upon such
exercise shall become the Holder or Holders of record of such Common Stock at
that time and date. The Common Stock so purchased shall be delivered to the
Holder within a reasonable time, not exceeding ten (10) business days, after
the rights represented by this Warrant shall have been so exercised. If at any
time this Warrant is exercised as to less than the total number of shares for
which it may be exercised, and this Warrant shall not have expired, the
Company shall promptly issue to the Holder a new Warrant identical in form as
to this Warrant as to the remaining shares hereunder.
2. TRANSFER.
Subject to the legend set forth at the top of the first page hereof,
this Warrant may be assigned in whole or in part by the Holder by (i)
completing and executing the form of assignment at the end hereof and (ii)
surrendering this Warrant with such duly completed and executed assignment
form for cancellation, accompanied by funds sufficient to pay any transfer
tax, at the office or agency of the Company referred to in Paragraph 9(b),
hereof; whereupon the Company shall issue, in the name or names specified by
the Holder (including the Holder) a new Warrant or Warrants of like tenor and
representing in the aggregate rights to purchase the same number of shares of
Common Stock as are then purchasable hereunder.
3. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees that all Common Stock
and Common Stock issuable upon exercise of this Warrant will, upon issuance,
be duly and validly issued, fully paid and nonassessable and no personal
liability will, for Company obligations, attach to the holder thereof by
reason of being such a holder, other than as set forth herein.
(b) The Company covenants and agrees that during the period
within which this Warrant may be exercised, the Company will at all times have
authorized and reserved a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
4. NO RIGHTS OF STOCKHOLDER.
This Warrant shall not entitle the Holder to any voting rights or
other rights as a stockholder of the Company, either at law or in equity, and
the rights of the Holder are limited to
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those expressed in this Warrant and are not enforceable against the Company
except to the extent set forth herein.
5. REGISTRATION.
(a) The Holder shall have the right to have the shares of
Common Stock underlying this Warrant registered as part of the next public
offering of the Common Stock. Upon the written request of any combination of
the holders of Common Stock or of Warrants issued by the Company and
collectively exercisable into not less than 100,000 shares of Common Stock (as
such number may be adjusted under Paragraph 7), and on a one-time basis, the
Company shall file, within ninety (90) days after written request such
registration, and use its best efforts to cause to be declared effective
ninety (90) days thereafter, by the Securities and Exchange Commission, a
registration statement or post-effective amendment thereto as permitted under
the Securities Act of 1933, as amended (the "Act"), covering the sale by the
Holder of the Common Stock issuable upon exercise of this Warrant or any
portion hereof (the "Registerable Securities"). The Company shall supply
prospectuses in order to facilitate the public sale or other disposition of
the Registerable Securities, use its best efforts to register and qualify any
of the Registerable Securities for sale in such states as such Holder
reasonably designates and do any and all other acts and things which may be
necessary to enable such Holder to consummate the public sale of the
Registerable Securities, and furnish indemnification in the manner provided in
Paragraph 6 hereto. The Holder shall furnish information reasonably requested
by the Company in accordance with such post-effective amendments or
registration statements, including its intentions with respect thereto, and
shall furnish indemnification as set forth in Paragraph 6.
(b) The Company will maintain such registration statement or
post-effective amendment current and effective under the Act until two years
following the expiration of the exercisability of this Warrant, or until
shares owned by the Holder are eligible for sale without restriction under
Rule 144.
(c) The Company shall bear the entire cost and expense of
any registration of securities under Paragraph 5 hereof. Notwithstanding the
foregoing, any Holder whose Registerable Securities are included in any such
registration statement pursuant to this Paragraph 5 shall, however, bear the
fees of any counsel retained by him and any transfer taxes or underwriting
discounts or commissions applicable to the Registerable Securities sold by him
pursuant thereto.
(d) In addition the Company shall:
(i) furnish to the Holder such numbers of copies of
a summary prospectus or other prospectus, including a preliminary prospectus
or any amendment or supplement to any prospectus, in conformity with the
requirements of the 1933 Act, and such
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other documents, as the Holder may reasonably request in order to facilitate
the public sale or other disposition of the securities owned by the Holder;
(ii) use its best efforts to register and qualify
the securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the Holder shall
reasonably request, and do any and all other acts and things which may be
necessary or advisable to enable such Holder to consummate the public sale or
other disposition in such jurisdictions of the securities owned by such
Holder, except that the Company shall not for any such purpose be required to
qualify to do business as a foreign corporation in any jurisdiction wherein it
is not so qualified or to file therein any general consent to service of
process;
(iii) use its best efforts to list such securities
on any securities exchange on which any securities of the Company is then
listed, if the listing of such securities is then permitted under the rules of
such exchange;
(iv) enter into and perform its obligations under
an underwriting agreement, if the offering is an underwritten offering, in
usual and customary form, with the managing underwriter or underwriters of
such underwritten offering;
(v) notify the Holder of Registrable Securities
covered by such registration statement, at any time when a prospectus relating
thereto covered by such registration statement is required to be delivered
under the 1933 Act, of the happening of any event of which it has knowledge as
a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing; and
(vi) furnish, at the request of the Holder on the
date such Registrable Securities are delivered to the underwriters for sale
pursuant to such registration or, if such Registrable Securities are not being
sold through underwriters, on the date the registration statement with respect
to such Registrable Securities becomes effective, (i) an opinion, dated such
date, of the counsel representing the Company for the purpose of such
registration, addressed to the underwriters, if any, and to the Holder making
such request, covering such legal matters with respect to the registration in
respect of which such opinion is being given as the Holder of such Registrable
Securities may reasonably request and are customarily included in such an
opinion and (ii) letters, dated, respectively, (1) the effective date of the
registration statement and (2) the date such Registrable Securities are
delivered to the underwriters, if any, for sale pursuant to such registration,
from a firm of independent certified public accountants of recognized standing
selected by the Company, addressed to the underwriters, if any, and to the
Holder making such request, covering such financial, statistical and
accounting matters with respect to the registration in respect of which such
letters are being given as the Holder of such Registrable Securities may
reasonably request and are customarily included in such letters; and
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(vii) take such other actions as shall be
reasonably requested by any Holder to facilitate the registration and sale of
the Registrable Securities.
6. INDEMNIFICATION.
(a) Whenever pursuant to Paragraph 5 a registration
statement relating to any Registerable Securities is filed under the Act,
amended or supplemented, the Company will indemnify and hold harmless each
Holder of the Registerable Securities covered by such registration statement,
amendment or supplement (such holder hereinafter referred to as the
Distributing Holder), each person, if any, who controls (within the meaning of
the Act) the Distributing Holder, and each officer, director, employee,
partner or agent of the Distributing Holder, and each underwriter (within the
meaning of the Act) of such securities and each person, if any, who controls
(within the meaning of the Act) any such underwriter and each officer,
director, employee, agent or partner of such underwriter against any losses,
claims, damages or liabilities joint or several, to which the Distributing
Holder, any such underwriter or any other person described above may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any such registration statement or any preliminary prospectus or final
prospectus constituting a part thereof or any amendment or supplement thereto,
or arise out of or are based upon the omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and will reimburse the Distributing Holder and each such
underwriter or such other person for any legal or other expenses reasonably
incurred by the Distributing Holder, or underwriter or such other person, in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case (i) to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in said registration statement, said
preliminary prospectus, said final prospectus or said amendment or supplement
in reliance upon and in conformity with written information furnished by such
Distributing Holder, any other Distributing Holder or any such an underwriter
or any other such person for use in the preparation thereof, and (ii) such
losses, claims, damages or liabilities arise out of or are based upon any
actual or alleged untrue statement or omission made in or from any preliminary
prospectus, but corrected in the final prospectus, as amended or supplemented.
(b) Whenever pursuant to Paragraph 5 a registration
statement relating to the Registerable Securities is filed, amended or
supplemented under the Act, the Distributing Holder will indemnify and hold
harmless the Company and each underwriter, each of their respective directors,
each of their respective officers, employees, partners and agents thereto, and
each person, if any, who controls the Company (within the meaning of the Act)
against any losses, claims, damages or liabilities to which the Company or any
such director, officer, employees, partners and agents or controlling person
may become subject under the Act or otherwise, insofar
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as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in any such registration statement or any preliminary
prospectus or final prospectus constituting a part thereof, or any amendment
or supplement thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent that such untrue statement or
alleged untrue statement or omission was made in said registration statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information
furnished by such Distributing Holder for use in the preparation thereof; and
will reimburse the Company or any such director, officer, employees, partners
and agents or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under
this Paragraph 6 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any
indemnifying party, give the indemnifying party notice of the commencement
thereof; but the omission to so notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise
than under this Paragraph 6.
(d) In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnified party will be entitled to participate in, and, to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof with counsel reasonably
satisfactory to such indemnifying party, and after notice from the indemnified
party to such indemnifying party of its election to so assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Paragraph 6 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
7. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SECURITIES.
(a) The Warrant Price shall be subject to adjustment from
time to time as follows:
(i) In case the Company shall at any time after the
date hereof pay a dividend in shares of Common
Stock or make a distribution in shares of
Common Stock, then upon such dividend or
distribution the Warrant Price in effect
immediately prior to such dividend or
distribution shall forthwith be reduced to a
price determined by dividing:
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(A) an amount equal to the total number of
shares of Common Stock outstanding
immediately prior to such dividend or
distribution multiplied by the Warrant
Price in effect immediately prior to
such dividend or distribution, by
(B) the total number of shares of Common
Stock outstanding immediately after such
issuance or sale.
For the purposes of any computation to be made in accordance
with the provision of this clause (i), the following provisions shall be
applicable: Common Stock issuable by way of dividend or other distribution on
any stock of the Company shall be deemed to have been issued immediately after
the opening of business on the date following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution.
(ii) In case the Company shall at any time subdivide
or combine the outstanding Common Stock, the
Warrant Price shall forthwith be
proportionately decreased in the case of
subdivision or increased in the case of
combination. Any such adjustment shall become
effective at the time such subdivision or
combination shall become effective.
(iii) In case the Company shall at any time or from
time to time issue or sell shares of Common
Stock (or securities convertible into or
exchangeable for shares of Common Stock, or any
options, warrants or other rights to acquire
shares of Common Stock) at a price per share
less than the Market Price per share of Common
Stock (treating the price per share of any
security exchangeable or exercisable into
Common Stock as equal to (x) the sum of the
price for such security convertible,
exchangeable or exercisable into Common Stock
plus any additional consideration payable
(without regard to any anti-dilution
adjustments) upon the conversion, exchange or
exercise of such security into Common Stock
divided by (y) the number of shares of Common
Stock initially underlying such convertible,
exchangeable or exercisable security), other
than issuance or sales of Common Stock pursuant
to any employee benefit plan, then, and in each
such case, the number of shares of Common Stock
thereafter purchasable upon exercise of a
Warrant shall be determined by multiplying the
number of shares of Common Stock theretofore
purchasable upon exercise of each Warrant by a
fraction (A) the numerator of which shall be
the sum of the number of shares of Common Stock
outstanding on such date plus the number of
additional shares of Common Stock issued (or
the maximum number into which such convertible
or
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exchangeable securities initially may convert
or exchange or for which such options, warrants
or other rights initially may be exercised) and
(B) the denominator of which shall be the sum
of the number of shares of Common Stock
outstanding on such date plus the number of
shares of Common Stock which the aggregate
consideration for the total number of such
additional shares of Common Stock so issued (or
into which such convertible or exchangeable
securities may convert or exchange or for which
such options, warrants or other rights may be
exercised plus the aggregate amount of any
additional consideration initially payable upon
conversion, exchange or exercise of such
security) would purchase at the Market Price
per share of Common Stock on such date. Such
adjustment shall be made whenever such shares,
securities, options, warrants or other rights
are issued, and shall become effective
retroactively immediately after the close of
business on the record date for the
determination of stockholders entitled to
receive such shares, securities, options,
warrants or other rights; PROVIDED, that the
determination as to whether an adjustment is
required to be made pursuant to this Section
7(a) shall only be made upon the issuance of
such shares or such convertible or exchangeable
securities, options, warrants or other rights,
and not upon the issuance of the security into
which such convertible or exchangeable security
converts or exchanges, or the security
underlying such option, warrant or other right.
Notwithstanding the foregoing, in the event of
such issuance or sale of Common Stock at a cash
price less than the Market Price, no such
adjustment under this Section 7(a) need be made
to the number of shares underlying the Warrant
unless such adjustment would require an
increase or decrease of at least 1% of the
number of shares underlying the Warrant. Any
lesser adjustment shall be carried forward and
shall be made at the time of and together with
the next subsequent adjustment which, together
with any adjustment or adjustments so carried
forward, shall amount to an increase or
decrease of at least 1% of number of shares
underlying the Warrant. For the purpose of this
Agreement, the term "Market Price" shall mean
(i) if the Common Stock is traded in the
over-the-counter market or on the National
Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ"), the
average per share closing prices of the Common
Stock on the 20 consecutive trading days
immediately preceding the date in question as
reported by NASDAQ or an equivalent generally
accepted reporting service, or (ii) if the
Common Stock is traded on a national securities
exchange, the average for the 20
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consecutive trading days immediately preceding
the date in question of the daily per share
closing prices of the Common Stock on the
principal stock exchange on which it is listed,
as the case may be. The closing price referred
to above shall be the last reported sales price
or in case no such reported sale takes place on
such day, the average of the reported closing
bid and asked prices, in either case on the
national securities exchange or automated
quotation system on which the Common Stock is
then listed. Whenever the number of shares of
Common Stock purchasable upon exercise of each
Warrant is adjusted, the Warrant Price for each
share of Common Stock payable upon exercise of
each Warrant shall be adjusted by multiplying
such Warrant Price immediately prior to such
adjustment by a fraction, the numerator of
which shall be the number of shares of Common
Stock purchasable upon the exercise of each
Warrant immediately prior to such adjustment
and the denominator of which shall be the
number of shares of Common Stock purchasable
immediately after such adjustment.
(iv) Within a reasonable time after the close of each
quarterly fiscal period of the Company during
which the Warrant Price or number of shares
issuable upon exercise of this Warrant has been
adjusted as herein provided, the Company shall
deliver to the Holder a certificate signed by
the President or Vice President of the Company
and by the Treasurer or Assistant Treasurer or
the Secretary or an Assistant Secretary of the
Company, showing in detail the facts requiring
all such adjustments occurring during such
period and the Warrant Price after each such
adjustment.
(b) In the event that the number of outstanding shares of
Common Stock is increased by a stock dividend or distribution payable in
Common Stock or by a subdivision of the outstanding Common Stock, then, from
and after the record date thereof, by reason of such dividend, distribution or
subdivision, the number of shares of Common Stock issuable upon the exercise
of the Warrant shall be increased in proportion to such increase in
outstanding shares. In the event that the number of shares of Common Stock
outstanding is decreased by a combination of the outstanding Common Stock,
then, from and after the record date thereof, the number of shares of Common
Stock issuable upon the exercise of the Warrant shall be decreased in
proportion to such decrease in the outstanding shares of Common Stock.
(c) In case of any reorganization or reclassification of the
outstanding Common Stock (other than a change in par value, or from par value
to no par value, or as a result of a subdivision or combination), or in case
of any consolidation of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger in which the
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Company is the continuing corporation and which does not result in any
reclassification of the outstanding Common Stock), or in case of any sale or
conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety, the holder of the Warrant then
outstanding shall thereafter have the right to purchase the kind and amount of
shares of common stock and other securities and property receivable upon such
reorganization, reclassification, consolidation, merger, sale or conveyance by
a holder of the number of shares of Common Stock which the holder of the
Warrant shall then be entitled to purchase; such adjustments shall apply with
respect to all such changes occurring between the date of this Warrant
Agreement and the date of exercise or expiration of the Warrant.
(d) Subject to the provisions of this Section, in case the
Company shall, at any time prior to the exercise of the Warrant, desire to
declare a dividend or make any distribution of its assets to holders of its
Common Stock, whether as a liquidating or a partial liquidating dividend or
for any other purpose, the Company shall provide the holder of the Warrant
with written notice of such intent not less than thirty (30) days prior to the
record date to determine holders of Common Stock entitled to receive such
distribution and the holder of this Warrant shall have until 5:00 p.m. EST on
the twentieth (20th) day following the actual receipt of such notice to elect
whether to exercise this Warrant in accordance with the terms herein. In the
event of proper election to exercise the Warrant, the holder of this Warrant
shall be deemed to be a holder of Common Stock as of the record date for such
distribution. Should the holder of the Warrant elect to exercise his Warrant
within 20 days after the record date for the determination of those holders of
Common Stock entitled to such dividend or distribution, he shall be entitled
to receive for the Warrant Price per Warrant, in addition to each share of
Common Stock, the amount of such distribution (or, at the option of the
Company, a sum equal to the value of any such assets at the time of such
distribution as determined by the Board of Directors of the Company in good
faith), which would have been payable to the holder had he been the holder of
record of the Common Stock receivable upon exercise of his Warrant on the
record date for the determination of those entitled to such distribution.
(e) In case of the dissolution, liquidation or winding-up of
the Company, all rights under the Warrant shall terminate on a date fixed by
the Company, such date to be no earlier than ten (10) days prior to the
effectiveness of such dissolution, liquidation or winding-up and not later
than five (5) days prior to such effectiveness. Notice of such termination of
purchase rights shall be given to the last registered holder of this Warrant,
as the same shall appear on the books of the Company, by registered mail at
least thirty (30) days prior to such termination date.
(f) In case the Company shall, at any time prior to the
expiration of this Warrant and prior to the exercise thereof, offer to the
holders of its Common Stock any rights to subscribe for additional shares of
any class of the Company, then the Company shall give written notice thereof
to the last registered holder hereof not less than thirty (30) days prior to
the date on which the books of the Company are closed or a record date is
fixed for the determination of the stockholders entitled to such subscription
rights. Such notice shall specify the date as to which
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the books shall be closed or record date fixed with respect to such offer of
subscription and the right of the holder hereof to participate in such offer
of subscription shall terminate if this Warrant shall not be exercised on or
before the date of such closing of the books or such record date.
(g) Any adjustment pursuant to the aforesaid provisions
shall be made on the basis of the number of shares of Common Stock which the
holder thereof would have been entitled to acquire by the exercise of the
Warrant immediately prior to the event giving rise to such adjustment.
(h) Irrespective of any adjustment in the Warrant Price or
the number or kind of shares purchasable upon exercise of this Warrant,
Warrants previously or hereafter issued may continue to express the same price
and number and kind of shares as are stated in this Warrant.
(i) The Company shall retain a firm of independent public
accountants (who may be any such firm regularly employed by the Company) to
make any computation required under this Section.
(j) If at any time, as a result of an adjustment made
pursuant to this Paragraph 7, the Holder of this Warrant shall become entitled
to purchase any securities other than shares of Common Stock, thereafter the
number of such securities so purchasable upon exercise of each Warrant and the
Warrant Price for such shares shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Common Stock.
8. FRACTIONAL SHARES.
The Company shall not be required to issue fractions of shares of
Common Stock on the exercise of this Warrant; provided, however, that if a
Holder exercises all the Warrants held of record by such Holder, the
fractional interests shall be eliminated by rounding any fraction up to the
nearest whole number of shares, if the fraction is equal to or greater than
.5, and down if the fraction is less than .5.
9. MISCELLANEOUS.
(a) This Warrant shall be governed by and in accordance with
the laws of the State of New York.
(b) All notices, requests, consents and other communications
hereunder shall be made in writing and shall be deemed to have been duly made
when delivered, or mailed by registered or certified mail, return receipt
requested: (i) if to a Holder, to the address of such Holder as shown on the
books of the Company, or (ii) if to the Company, One Penn Plaza, Suite 1503,
New York, NY 10119.
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(c) All the covenants and provisions of this Warrant by or
for the benefit of the Company and the Holders inure to the benefit of their
respective successors and assigns hereunder.
(d) Nothing in this Warrant other than Section 6 shall be
construed to give to any person or corporation other than the Company and the
registered Holder or Holders, any legal or equitable right, and this Warrant
is for the sole and exclusive benefit of the Company and the Holder or Holders.
IN WITNESS WHEREOF, Trans World Gaming Corp. has caused this
Warrant to be signed by its duly authorized officer and this Warrant to be
dated October 15, 1999.
TRANS WORLD GAMING CORP.
By:
--------------------
Its:
--------------------
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FORM OF
NOTICE OF EXERCISE
(To be executed upon partial or full
exercise of the Warrants represented hereby)
The undersigned registered Holder of the Warrants represented by the attached
Warrant Certificate irrevocably exercises such Warrant for and purchases
______________________ (___________) shares of Common Stock of Trans World
Gaming Corp. (the "Company").
The undersigned herewith makes payment therefore in the amount of $
____________, consisting of $ ____________ by wire transfer or certified or
cashiers' check at a price of $_____ per share and requests that a certificate
(or certificates) in denominations of ______________ (___________) shares of
Common Stock of the Company hereby purchased be issued in the name of and
delivered to the undersigned or such designee of the undersigned and, if such
shares of Common Stock (together with any shares issued upon exercise of other
Warrants or replacement Warrants) shall not include all of the shares of
Common Stock issuable upon exercise of all Warrants represented by such
Warrant Certificate (or if a new or replacement Warrant is otherwise to be
provided pursuant to the Warrant Certificate), that a new or replacement
Warrant Certificate of like tenor for the number of Warrants not being
exercised (and not being surrendered) hereunder be issued in the name of and
delivered to the undersigned, whose address is __________________________.
Dated:
-------------
-----------------------------
(Signature of Registered Holder)
By:
--------------------------
Title:
-----------------------
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THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES ACT, AND MAY NOT BE
TRANSFERRED WITHOUT REGISTRATION UNDER SUCH
ACTS OR PURSUANT TO AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE
COMMON STOCK
Series G No. 2
TRANS WORLD GAMING CORP.
(a Nevada corporation)
Dated: October 15, 1999
THIS CERTIFIES that Malcolm M.B. Sterrett (together with its
successors or permitted assigns, the "Holder") is entitled to purchase from
Trans World Gaming Corp., a Nevada corporation ("Company") up to 41,691 shares
of the Company's common stock, par value $.001 per share (the "Common Stock"),
at a purchase price of $.01 per share of Common Stock (the "Warrant Price"),
subject to adjustment as hereafter provided.
This Warrant is issued pursuant to that certain Subscription
Agreement dated as of October 15, 1999 (the "Agreement"), between the Company
and the Holder.
1. EXERCISE OF THE WARRANT.
The rights represented by this Warrant may be exercised at any time
on or before 5:00 p.m., New York time, on March 31, 2008, in whole or in part,
by (i) the surrender of this Warrant (with the purchase form at the end hereof
properly executed) at the principal executive office of the Company (or such
other office or agency of the Company as it may designate by notice in writing
to the Holder at the address of the Holder appearing on the books of the
Company); (ii) payment to the Company of the Warrant Price then in effect for
the number of shares of
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Common Stock specified in the above-mentioned purchase form together with
applicable stock transfer taxes, if any; and (iii) delivery to the Company of
a duly executed agreement signed by the person(s) designated in the purchase
form to the effect that such person(s) agree(s) to be bound by the provisions
of Paragraph 5 and subparagraph (b), (c) and (d) of Paragraph 6 hereof. This
Warrant shall be deemed to have been exercised, in whole or in part to the
extent specified, immediately prior to the close of business on the date this
Warrant is surrendered and payment is made in accordance with the foregoing
provisions of this Paragraph 1, and the person or persons in whose name or
names the certificates for the Common Stock shall be issuable upon such
exercise shall become the Holder or Holders of record of such Common Stock at
that time and date. The Common Stock so purchased shall be delivered to the
Holder within a reasonable time, not exceeding ten (10) business days, after
the rights represented by this Warrant shall have been so exercised. If at any
time this Warrant is exercised as to less than the total number of shares for
which it may be exercised, and this Warrant shall not have expired, the
Company shall promptly issue to the Holder a new Warrant identical in form as
to this Warrant as to the remaining shares hereunder.
2. TRANSFER.
Subject to the legend set forth at the top of the first page hereof,
this Warrant may be assigned in whole or in part by the Holder by (i)
completing and executing the form of assignment at the end hereof and (ii)
surrendering this Warrant with such duly completed and executed assignment
form for cancellation, accompanied by funds sufficient to pay any transfer
tax, at the office or agency of the Company referred to in Paragraph 9(b),
hereof; whereupon the Company shall issue, in the name or names specified by
the Holder (including the Holder) a new Warrant or Warrants of like tenor and
representing in the aggregate rights to purchase the same number of shares of
Common Stock as are then purchasable hereunder.
3. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees that all Common Stock
and Common Stock issuable upon exercise of this Warrant will, upon issuance,
be duly and validly issued, fully paid and nonassessable and no personal
liability will, for Company obligations, attach to the holder thereof by
reason of being such a holder, other than as set forth herein.
(b) The Company covenants and agrees that during the period
within which this Warrant may be exercised, the Company will at all times have
authorized and reserved a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
4. NO RIGHTS OF STOCKHOLDER.
This Warrant shall not entitle the Holder to any voting rights or
other rights as a stockholder of the Company, either at law or in equity, and
the rights of the Holder are limited to
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those expressed in this Warrant and are not enforceable against the Company
except to the extent set forth herein.
5. REGISTRATION.
(a) The Holder shall have the right to have the shares of
Common Stock underlying this Warrant registered as part of the next public
offering of the Common Stock. Upon the written request of any combination of
the holders of Common Stock or of Warrants issued by the Company and
collectively exercisable into not less than 100,000 shares of Common Stock (as
such number may be adjusted under Paragraph 7), and on a one-time basis, the
Company shall file, within ninety (90) days after written request such
registration, and use its best efforts to cause to be declared effective
ninety (90) days thereafter, by the Securities and Exchange Commission, a
registration statement or post-effective amendment thereto as permitted under
the Securities Act of 1933, as amended (the "Act"), covering the sale by the
Holder of the Common Stock issuable upon exercise of this Warrant or any
portion hereof (the "Registerable Securities"). The Company shall supply
prospectuses in order to facilitate the public sale or other disposition of
the Registerable Securities, use its best efforts to register and qualify any
of the Registerable Securities for sale in such states as such Holder
reasonably designates and do any and all other acts and things which may be
necessary to enable such Holder to consummate the public sale of the
Registerable Securities, and furnish indemnification in the manner provided in
Paragraph 6 hereto. The Holder shall furnish information reasonably requested
by the Company in accordance with such post-effective amendments or
registration statements, including its intentions with respect thereto, and
shall furnish indemnification as set forth in Paragraph 6.
(b) The Company will maintain such registration statement or
post-effective amendment current and effective under the Act until two years
following the expiration of the exercisability of this Warrant, or until
shares owned by the Holder are eligible for sale without restriction under
Rule 144.
(c) The Company shall bear the entire cost and expense of
any registration of securities under Paragraph 5 hereof. Notwithstanding the
foregoing, any Holder whose Registerable Securities are included in any such
registration statement pursuant to this Paragraph 5 shall, however, bear the
fees of any counsel retained by him and any transfer taxes or underwriting
discounts or commissions applicable to the Registerable Securities sold by him
pursuant thereto.
(d) In addition the Company shall:
(i) furnish to the Holder such numbers of copies of
a summary prospectus or other prospectus, including a preliminary prospectus
or any amendment or supplement to any prospectus, in conformity with the
requirements of the 1933 Act, and such
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other documents, as the Holder may reasonably request in order to facilitate
the public sale or other disposition of the securities owned by the Holder;
(ii) use its best efforts to register and qualify
the securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the Holder shall
reasonably request, and do any and all other acts and things which may be
necessary or advisable to enable such Holder to consummate the public sale or
other disposition in such jurisdictions of the securities owned by such
Holder, except that the Company shall not for any such purpose be required to
qualify to do business as a foreign corporation in any jurisdiction wherein it
is not so qualified or to file therein any general consent to service of
process;
(iii) use its best efforts to list such securities
on any securities exchange on which any securities of the Company is then
listed, if the listing of such securities is then permitted under the rules of
such exchange;
(iv) enter into and perform its obligations under
an underwriting agreement, if the offering is an underwritten offering, in
usual and customary form, with the managing underwriter or underwriters of
such underwritten offering;
(v) notify the Holder of Registrable Securities
covered by such registration statement, at any time when a prospectus relating
thereto covered by such registration statement is required to be delivered
under the 1933 Act, of the happening of any event of which it has knowledge as
a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing; and
(vi) furnish, at the request of the Holder on the
date such Registrable Securities are delivered to the underwriters for sale
pursuant to such registration or, if such Registrable Securities are not being
sold through underwriters, on the date the registration statement with respect
to such Registrable Securities becomes effective, (i) an opinion, dated such
date, of the counsel representing the Company for the purpose of such
registration, addressed to the underwriters, if any, and to the Holder making
such request, covering such legal matters with respect to the registration in
respect of which such opinion is being given as the Holder of such Registrable
Securities may reasonably request and are customarily included in such an
opinion and (ii) letters, dated, respectively, (1) the effective date of the
registration statement and (2) the date such Registrable Securities are
delivered to the underwriters, if any, for sale pursuant to such registration,
from a firm of independent certified public accountants of recognized standing
selected by the Company, addressed to the underwriters, if any, and to the
Holder making such request, covering such financial, statistical and
accounting matters with respect to the registration in respect of which such
letters are being given as the Holder of such Registrable Securities may
reasonably request and are customarily included in such letters; and
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(vii) take such other actions as shall be
reasonably requested by any Holder to facilitate the registration and sale of
the Registrable Securities.
6. INDEMNIFICATION.
(a) Whenever pursuant to Paragraph 5 a registration
statement relating to any Registerable Securities is filed under the Act,
amended or supplemented, the Company will indemnify and hold harmless each
Holder of the Registerable Securities covered by such registration statement,
amendment or supplement (such holder hereinafter referred to as the
Distributing Holder), each person, if any, who controls (within the meaning of
the Act) the Distributing Holder, and each officer, director, employee,
partner or agent of the Distributing Holder, and each underwriter (within the
meaning of the Act) of such securities and each person, if any, who controls
(within the meaning of the Act) any such underwriter and each officer,
director, employee, agent or partner of such underwriter against any losses,
claims, damages or liabilities joint or several, to which the Distributing
Holder, any such underwriter or any other person described above may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any such registration statement or any preliminary prospectus or final
prospectus constituting a part thereof or any amendment or supplement thereto,
or arise out of or are based upon the omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and will reimburse the Distributing Holder and each such
underwriter or such other person for any legal or other expenses reasonably
incurred by the Distributing Holder, or underwriter or such other person, in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case (i) to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in said registration statement, said
preliminary prospectus, said final prospectus or said amendment or supplement
in reliance upon and in conformity with written information furnished by such
Distributing Holder, any other Distributing Holder or any such an underwriter
or any other such person for use in the preparation thereof, and (ii) such
losses, claims, damages or liabilities arise out of or are based upon any
actual or alleged untrue statement or omission made in or from any preliminary
prospectus, but corrected in the final prospectus, as amended or supplemented.
(b) Whenever pursuant to Paragraph 5 a registration
statement relating to the Registerable Securities is filed, amended or
supplemented under the Act, the Distributing Holder will indemnify and hold
harmless the Company and each underwriter, each of their respective directors,
each of their respective officers, employees, partners and agents thereto, and
each person, if any, who controls the Company (within the meaning of the Act)
against any losses, claims, damages or liabilities to which the Company or any
such director, officer, employees, partners and agents or controlling person
may become subject under the Act or otherwise, insofar
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as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in any such registration statement or any preliminary
prospectus or final prospectus constituting a part thereof, or any amendment
or supplement thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent that such untrue statement or
alleged untrue statement or omission was made in said registration statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information
furnished by such Distributing Holder for use in the preparation thereof; and
will reimburse the Company or any such director, officer, employees, partners
and agents or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under
this Paragraph 6 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any
indemnifying party, give the indemnifying party notice of the commencement
thereof; but the omission to so notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise
than under this Paragraph 6.
(d) In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnified party will be entitled to participate in, and , to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof with counsel reasonably
satisfactory to such indemnifying party, and after notice from the indemnified
party to such indemnifying party of its election to so assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Paragraph 6 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
7. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SECURITIES.
(a) The Warrant Price shall be subject to adjustment from
time to time as follows:
(i) In case the Company shall at any time after the
date hereof pay a dividend in shares of Common
Stock or make a distribution in shares of
Common Stock, then upon such dividend or
distribution the Warrant Price in effect
immediately prior to such dividend or
distribution shall forthwith be reduced to a
price determined by dividing:
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(A) an amount equal to the total number of
shares of Common Stock outstanding
immediately prior to such dividend or
distribution multiplied by the Warrant
Price in effect immediately prior to
such dividend or distribution, by
(B) the total number of shares of Common
Stock outstanding immediately after
such issuance or sale.
For the purposes of any computation to be made in accordance
with the provision of this clause (i), the following provisions shall be
applicable: Common Stock issuable by way of dividend or other distribution on
any stock of the Company shall be deemed to have been issued immediately after
the opening of business on the date following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution.
(ii) In case the Company shall at any time subdivide
or combine the outstanding Common Stock, the
Warrant Price shall forthwith be
proportionately decreased in the case of
subdivision or increased in the case of
combination. Any such adjustment shall become
effective at the time such subdivision or
combination shall become effective.
(iii) In case the Company shall at any time or from
time to time issue or sell shares of Common
Stock (or securities convertible into or
exchangeable for shares of Common Stock, or any
options, warrants or other rights to acquire
shares of Common Stock) at a price per share
less than the Market Price per share of Common
Stock (treating the price per share of any
security exchangeable or exercisable into
Common Stock as equal to (x) the sum of the
price for such security convertible,
exchangeable or exercisable into Common Stock
plus any additional consideration payable
(without regard to any anti-dilution
adjustments) upon the conversion, exchange or
exercise of such security into Common Stock
divided by (y) the number of shares of Common
Stock initially underlying such convertible,
exchangeable or exercisable security), other
than issuance or sales of Common Stock pursuant
to any employee benefit plan, then, and in each
such case, the number of shares of Common Stock
thereafter purchasable upon exercise of a
Warrant shall be determined by multiplying the
number of shares of Common Stock theretofore
purchasable upon exercise of each Warrant by a
fraction (A) the numerator of which shall be
the sum of the number of shares of Common Stock
outstanding on such date plus the number of
additional shares of Common Stock issued (or
the maximum number into which such convertible
or
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exchangeable securities initially may convert
or exchange or for which such options, warrants
or other rights initially may be exercised) and
(B) the denominator of which shall be the sum
of the number of shares of Common Stock
outstanding on such date plus the number of
shares of Common Stock which the aggregate
consideration for the total number of such
additional shares of Common Stock so issued (or
into which such convertible or exchangeable
securities may convert or exchange or for which
such options, warrants or other rights may be
exercised plus the aggregate amount of any
additional consideration initially payable upon
conversion, exchange or exercise of such
security) would purchase at the Market Price
per share of Common Stock on such date. Such
adjustment shall be made whenever such shares,
securities, options, warrants or other rights
are issued, and shall become effective
retroactively immediately after the close of
business on the record date for the
determination of stockholders entitled to
receive such shares, securities, options,
warrants or other rights; PROVIDED, that the
determination as to whether an adjustment is
required to be made pursuant to this Section
7(a) shall only be made upon the issuance of
such shares or such convertible or exchangeable
securities, options, warrants or other rights,
and not upon the issuance of the security into
which such convertible or exchangeable security
converts or exchanges, or the security
underlying such option, warrant or other right.
Notwithstanding the foregoing, in the event of
such issuance or sale of Common Stock at a cash
price less than the Market Price, no such
adjustment under this Section 7(a) need be made
to the number of shares underlying the Warrant
unless such adjustment would require an
increase or decrease of at least 1% of the
number of shares underlying the Warrant. Any
lesser adjustment shall be carried forward and
shall be made at the time of and together with
the next subsequent adjustment which, together
with any adjustment or adjustments so carried
forward, shall amount to an increase or
decrease of at least 1% of number of shares
underlying the Warrant. For the purpose of this
Agreement, the term "Market Price" shall mean
(i) if the Common Stock is traded in the
over-the-counter market or on the National
Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ"), the
average per share closing prices of the Common
Stock on the 20 consecutive trading days
immediately preceding the date in question as
reported by NASDAQ or an equivalent generally
accepted reporting service, or (ii) if the
Common Stock is traded on a national securities
exchange, the average for the 20
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consecutive trading days immediately preceding
the date in question of the daily per share
closing prices of the Common Stock on the
principal stock exchange on which it is listed,
as the case may be. The closing price referred
to above shall be the last reported sales price
or in case no such reported sale takes place on
such day, the average of the reported closing
bid and asked prices, in either case on the
national securities exchange or automated
quotation system on which the Common Stock is
then listed. Whenever the number of shares of
Common Stock purchasable upon exercise of each
Warrant is adjusted, the Warrant Price for each
share of Common Stock payable upon exercise of
each Warrant shall be adjusted by multiplying
such Warrant Price immediately prior to such
adjustment by a fraction, the numerator of
which shall be the number of shares of Common
Stock purchasable upon the exercise of each
Warrant immediately prior to such adjustment
and the denominator of which shall be the
number of shares of Common Stock purchasable
immediately after such adjustment.
(iv) Within a reasonable time after the close of each
quarterly fiscal period of the Company during
which the Warrant Price or number of shares
issuable upon exercise of this Warrant has been
adjusted as herein provided, the Company shall
deliver to the Holder a certificate signed by
the President or Vice President of the Company
and by the Treasurer or Assistant Treasurer or
the Secretary or an Assistant Secretary of the
Company, showing in detail the facts requiring
all such adjustments occurring during such
period and the Warrant Price after each such
adjustment.
(b) In the event that the number of outstanding shares of
Common Stock is increased by a stock dividend or distribution payable in
Common Stock or by a subdivision of the outstanding Common Stock, then, from
and after the record date thereof, by reason of such dividend, distribution or
subdivision, the number of shares of Common Stock issuable upon the exercise
of the Warrant shall be increased in proportion to such increase in
outstanding shares. In the event that the number of shares of Common Stock
outstanding is decreased by a combination of the outstanding Common Stock,
then, from and after the record date thereof, the number of shares of Common
Stock issuable upon the exercise of the Warrant shall be decreased in
proportion to such decrease in the outstanding shares of Common Stock.
(c) In case of any reorganization or reclassification of the
outstanding Common Stock (other than a change in par value, or from par value
to no par value, or as a result of a subdivision or combination), or in case
of any consolidation of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger in which the
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Company is the continuing corporation and which does not result in any
reclassification of the outstanding Common Stock), or in case of any sale or
conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety, the holder of the Warrant then
outstanding shall thereafter have the right to purchase the kind and amount of
shares of common stock and other securities and property receivable upon such
reorganization, reclassification, consolidation, merger, sale or conveyance by
a holder of the number of shares of Common Stock which the holder of the
Warrant shall then be entitled to purchase; such adjustments shall apply with
respect to all such changes occurring between the date of this Warrant
Agreement and the date of exercise or expiration of the Warrant.
(d) Subject to the provisions of this Section, in case the
Company shall, at any time prior to the exercise of the Warrant, desire to
declare a dividend or make any distribution of its assets to holders of its
Common Stock, whether as a liquidating or a partial liquidating dividend or
for any other purpose, the Company shall provide the holder of the Warrant
with written notice of such intent not less than thirty (30) days prior to the
record date to determine holders of Common Stock entitled to receive such
distribution and the holder of this Warrant shall have until 5:00 p.m. EST on
the twentieth (20th) day following the actual receipt of such notice to elect
whether to exercise this Warrant in accordance with the terms herein. In the
event of proper election to exercise the Warrant, the holder of this Warrant
shall be deemed to be a holder of Common Stock as of the record date for such
distribution. Should the holder of the Warrant elect to exercise his Warrant
within 20 days after the record date for the determination of those holders of
Common Stock entitled to such dividend or distribution, he shall be entitled
to receive for the Warrant Price per Warrant, in addition to each share of
Common Stock, the amount of such distribution (or, at the option of the
Company, a sum equal to the value of any such assets at the time of such
distribution as determined by the Board of Directors of the Company in good
faith), which would have been payable to the holder had he been the holder of
record of the Common Stock receivable upon exercise of his Warrant on the
record date for the determination of those entitled to such distribution.
(e) In case of the dissolution, liquidation or winding-up of
the Company, all rights under the Warrant shall terminate on a date fixed by
the Company, such date to be no earlier than ten (10) days prior to the
effectiveness of such dissolution, liquidation or winding-up and not later
than five (5) days prior to such effectiveness. Notice of such termination of
purchase rights shall be given to the last registered holder of this Warrant,
as the same shall appear on the books of the Company, by registered mail at
least thirty (30) days prior to such termination date.
(f) In case the Company shall, at any time prior to the
expiration of this Warrant and prior to the exercise thereof, offer to the
holders of its Common Stock any rights to subscribe for additional shares of
any class of the Company, then the Company shall give written notice thereof
to the last registered holder hereof not less than thirty (30) days prior to
the date on which the books of the Company are closed or a record date is
fixed for the determination of the stockholders entitled to such subscription
rights. Such notice shall specify the date as to which
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the books shall be closed or record date fixed with respect to such offer of
subscription and the right of the holder hereof to participate in such offer
of subscription shall terminate if this Warrant shall not be exercised on or
before the date of such closing of the books or such record date.
(g) Any adjustment pursuant to the aforesaid provisions
shall be made on the basis of the number of shares of Common Stock which the
holder thereof would have been entitled to acquire by the exercise of the
Warrant immediately prior to the event giving rise to such adjustment.
(h) Irrespective of any adjustment in the Warrant Price or
the number or kind of shares purchasable upon exercise of this Warrant,
Warrants previously or hereafter issued may continue to express the same price
and number and kind of shares as are stated in this Warrant.
(i) The Company shall retain a firm of independent public
accountants (who may be any such firm regularly employed by the Company) to
make any computation required under this Section.
(j) If at any time, as a result of an adjustment made
pursuant to this Paragraph 7, the Holder of this Warrant shall become entitled
to purchase any securities other than shares of Common Stock, thereafter the
number of such securities so purchasable upon exercise of each Warrant and the
Warrant Price for such shares shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Common Stock.
8. FRACTIONAL SHARES.
The Company shall not be required to issue fractions of shares of
Common Stock on the exercise of this Warrant; provided, however, that if a
Holder exercises all the Warrants held of record by such Holder, the
fractional interests shall be eliminated by rounding any fraction up to the
nearest whole number of shares, if the fraction is equal to or greater than
.5, and down if the fraction is less than .5.
9. MISCELLANEOUS.
(a) This Warrant shall be governed by and in accordance with
the laws of the State of New York.
(b) All notices, requests, consents and other communications
hereunder shall be made in writing and shall be deemed to have been duly made
when delivered, or mailed by registered or certified mail, return receipt
requested: (i) if to a Holder, to the address of such Holder as shown on the
books of the Company, or (ii) if to the Company, One Penn Plaza, Suite 1503,
New York, NY 10119.
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(c) All the covenants and provisions of this Warrant by or
for the benefit of the Company and the Holders inure to the benefit of their
respective successors and assigns hereunder.
(d) Nothing in this Warrant other than Section 6 shall be
construed to give to any person or corporation other than the Company and the
registered Holder or Holders, any legal or equitable right, and this Warrant
is for the sole and exclusive benefit of the Company and the Holder or Holders.
IN WITNESS WHEREOF, Trans World Gaming Corp. has caused this
Warrant to be signed by its duly authorized officer and this Warrant to be
dated October 15, 1999.
TRANS WORLD GAMING CORP.
By:
-----------------------------
Its:
-----------------------------
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FORM OF
NOTICE OF EXERCISE
(To be executed upon partial or full
exercise of the Warrants represented hereby)
The undersigned registered Holder of the Warrants represented by the attached
Warrant Certificate irrevocably exercises such Warrant for and purchases
______________________ (___________) shares of Common Stock of Trans World
Gaming Corp. (the "Company").
The undersigned herewith makes payment therefore in the amount of $
____________, consisting of $ ____________ by wire transfer or certified or
cashiers' check at a price of $_____ per share and requests that a certificate
(or certificates) in denominations of ______________ (___________) shares of
Common Stock of the Company hereby purchased be issued in the name of and
delivered to the undersigned or such designee of the undersigned and, if such
shares of Common Stock (together with any shares issued upon exercise of other
Warrants or replacement Warrants) shall not include all of the shares of
Common Stock issuable upon exercise of all Warrants represented by such
Warrant Certificate (or if a new or replacement Warrant is otherwise to be
provided pursuant to the Warrant Certificate), that a new or replacement
Warrant Certificate of like tenor for the number of Warrants not being
exercised (and not being surrendered) hereunder be issued in the name of and
delivered to the undersigned, whose address is __________________________.
Dated: __________.
--------------------------------
(Signature of Registered Holder)
By:
-----------------------------
Title:
--------------------------
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THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES ACT, AND MAY NOT BE
TRANSFERRED WITHOUT REGISTRATION UNDER SUCH
ACTS OR PURSUANT TO AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE
COMMON STOCK
Series G No. 1
TRANS WORLD GAMING CORP.
(a Nevada corporation)
Dated: October 15, 1999
THIS CERTIFIES that Value Partners, Ltd. (together with its
successors or permitted assigns, the "Holder") is entitled to purchase from
Trans World Gaming Corp., a Nevada corporation ("Company") up to 1,125,655
shares of the Company's common stock, par value $.001 per share (the "Common
Stock"), at a purchase price of $.01 per share of Common Stock (the "Warrant
Price"), subject to adjustment as hereafter provided.
This Warrant is issued pursuant to that certain Subscription
Agreement dated as of October 15, 1999 (the "Agreement"), between the Company
and the Holder.
1. EXERCISE OF THE WARRANT.
The rights represented by this Warrant may be exercised at any time
on or before 5:00 p.m., New York time, on March 31, 2008, in whole or in part,
by (i) the surrender of this Warrant (with the purchase form at the end hereof
properly executed) at the principal executive office of the Company (or such
other office or agency of the Company as it may designate by notice in writing
to the Holder at the address of the Holder appearing on the books of the
Company); (ii) payment to the Company of the Warrant Price then in effect for
the number of shares of
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Common Stock specified in the above-mentioned purchase form together with
applicable stock transfer taxes, if any; and (iii) delivery to the Company of
a duly executed agreement signed by the person(s) designated in the purchase
form to the effect that such person(s) agree(s) to be bound by the provisions
of Paragraph 5 and subparagraph (b), (c) and (d) of Paragraph 6 hereof. This
Warrant shall be deemed to have been exercised, in whole or in part to the
extent specified, immediately prior to the close of business on the date this
Warrant is surrendered and payment is made in accordance with the foregoing
provisions of this Paragraph 1, and the person or persons in whose name or
names the certificates for the Common Stock shall be issuable upon such
exercise shall become the Holder or Holders of record of such Common Stock at
that time and date. The Common Stock so purchased shall be delivered to the
Holder within a reasonable time, not exceeding ten (10) business days, after
the rights represented by this Warrant shall have been so exercised. If at any
time this Warrant is exercised as to less than the total number of shares for
which it may be exercised, and this Warrant shall not have expired, the
Company shall promptly issue to the Holder a new Warrant identical in form as
to this Warrant as to the remaining shares hereunder.
2. TRANSFER.
Subject to the legend set forth at the top of the first page hereof,
this Warrant may be assigned in whole or in part by the Holder by (i)
completing and executing the form of assignment at the end hereof and (ii)
surrendering this Warrant with such duly completed and executed assignment
form for cancellation, accompanied by funds sufficient to pay any transfer
tax, at the office or agency of the Company referred to in Paragraph 9(b),
hereof; whereupon the Company shall issue, in the name or names specified by
the Holder (including the Holder) a new Warrant or Warrants of like tenor and
representing in the aggregate rights to purchase the same number of shares of
Common Stock as are then purchasable hereunder.
3. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees that all Common Stock
and Common Stock issuable upon exercise of this Warrant will, upon issuance,
be duly and validly issued, fully paid and nonassessable and no personal
liability will, for Company obligations, attach to the holder thereof by
reason of being such a holder, other than as set forth herein.
(b) The Company covenants and agrees that during the period
within which this Warrant may be exercised, the Company will at all times have
authorized and reserved a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.
4. NO RIGHTS OF STOCKHOLDER.
This Warrant shall not entitle the Holder to any voting rights or
other rights as a stockholder of the Company, either at law or in equity, and
the rights of the Holder are limited to
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those expressed in this Warrant and are not enforceable against the Company
except to the extent set forth herein.
5. REGISTRATION.
(a) The Holder shall have the right to have the shares of
Common Stock underlying this Warrant registered as part of the next public
offering of the Common Stock. Upon the written request of any combination of
the holders of Common Stock or of Warrants issued by the Company and
collectively exercisable into not less than 100,000 shares of Common Stock (as
such number may be adjusted under Paragraph 7), and on a one-time basis, the
Company shall file, within ninety (90) days after written request such
registration, and use its best efforts to cause to be declared effective
ninety (90) days thereafter, by the Securities and Exchange Commission, a
registration statement or post-effective amendment thereto as permitted under
the Securities Act of 1933, as amended (the "Act"), covering the sale by the
Holder of the Common Stock issuable upon exercise of this Warrant or any
portion hereof (the "Registerable Securities"). The Company shall supply
prospectuses in order to facilitate the public sale or other disposition of
the Registerable Securities, use its best efforts to register and qualify any
of the Registerable Securities for sale in such states as such Holder
reasonably designates and do any and all other acts and things which may be
necessary to enable such Holder to consummate the public sale of the
Registerable Securities, and furnish indemnification in the manner provided in
Paragraph 6 hereto. The Holder shall furnish information reasonably requested
by the Company in accordance with such post-effective amendments or
registration statements, including its intentions with respect thereto, and
shall furnish indemnification as set forth in Paragraph 6.
(b) The Company will maintain such registration statement or
post-effective amendment current and effective under the Act until two years
following the expiration of the exercisability of this Warrant, or until
shares owned by the Holder are eligible for sale without restriction under
Rule 144.
(c) The Company shall bear the entire cost and expense of
any registration of securities under Paragraph 5 hereof. Notwithstanding the
foregoing, any Holder whose Registerable Securities are included in any such
registration statement pursuant to this Paragraph 5 shall, however, bear the
fees of any counsel retained by him and any transfer taxes or underwriting
discounts or commissions applicable to the Registerable Securities sold by him
pursuant thereto.
(d) In addition the Company shall:
(i) furnish to the Holder such numbers of copies of
a summary prospectus or other prospectus, including a preliminary prospectus
or any amendment or supplement to any prospectus, in conformity with the
requirements of the 1933 Act, and such
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other documents, as the Holder may reasonably request in order to facilitate
the public sale or other disposition of the securities owned by the Holder;
(ii) use its best efforts to register and qualify
the securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the Holder shall
reasonably request, and do any and all other acts and things which may be
necessary or advisable to enable such Holder to consummate the public sale or
other disposition in such jurisdictions of the securities owned by such
Holder, except that the Company shall not for any such purpose be required to
qualify to do business as a foreign corporation in any jurisdiction wherein it
is not so qualified or to file therein any general consent to service of
process;
(iii) use its best efforts to list such securities
on any securities exchange on which any securities of the Company is then
listed, if the listing of such securities is then permitted under the rules of
such exchange;
(iv) enter into and perform its obligations under
an underwriting agreement, if the offering is an underwritten offering, in
usual and customary form, with the managing underwriter or underwriters of
such underwritten offering;
(v) notify the Holder of Registrable Securities
covered by such registration statement, at any time when a prospectus relating
thereto covered by such registration statement is required to be delivered
under the 1933 Act, of the happening of any event of which it has knowledge as
a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing; and
(vi) furnish, at the request of the Holder on the
date such Registrable Securities are delivered to the underwriters for sale
pursuant to such registration or, if such Registrable Securities are not being
sold through underwriters, on the date the registration statement with respect
to such Registrable Securities becomes effective, (i) an opinion, dated such
date, of the counsel representing the Company for the purpose of such
registration, addressed to the underwriters, if any, and to the Holder making
such request, covering such legal matters with respect to the registration in
respect of which such opinion is being given as the Holder of such Registrable
Securities may reasonably request and are customarily included in such an
opinion and (ii) letters, dated, respectively, (1) the effective date of the
registration statement and (2) the date such Registrable Securities are
delivered to the underwriters, if any, for sale pursuant to such registration,
from a firm of independent certified public accountants of recognized standing
selected by the Company, addressed to the underwriters, if any, and to the
Holder making such request, covering such financial, statistical and
accounting matters with respect to the registration in respect of which such
letters are being given as the Holder of such Registrable Securities may
reasonably request and are customarily included in such letters; and
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<PAGE>
(vii) take such other actions as shall be
reasonably requested by any Holder to facilitate the registration and sale of
the Registrable Securities.
6. INDEMNIFICATION.
(a) Whenever pursuant to Paragraph 5 a registration
statement relating to any Registerable Securities is filed under the Act,
amended or supplemented, the Company will indemnify and hold harmless each
Holder of the Registerable Securities covered by such registration statement,
amendment or supplement (such holder hereinafter referred to as the
Distributing Holder), each person, if any, who controls (within the meaning of
the Act) the Distributing Holder, and each officer, director, employee,
partner or agent of the Distributing Holder, and each underwriter (within the
meaning of the Act) of such securities and each person, if any, who controls
(within the meaning of the Act) any such underwriter and each officer,
director, employee, agent or partner of such underwriter against any losses,
claims, damages or liabilities joint or several, to which the Distributing
Holder, any such underwriter or any other person described above may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any such registration statement or any preliminary prospectus or final
prospectus constituting a part thereof or any amendment or supplement thereto,
or arise out of or are based upon the omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and will reimburse the Distributing Holder and each such
underwriter or such other person for any legal or other expenses reasonably
incurred by the Distributing Holder, or underwriter or such other person, in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case (i) to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in said registration statement, said
preliminary prospectus, said final prospectus or said amendment or supplement
in reliance upon and in conformity with written information furnished by such
Distributing Holder, any other Distributing Holder or any such an underwriter
or any other such person for use in the preparation thereof, and (ii) such
losses, claims, damages or liabilities arise out of or are based upon any
actual or alleged untrue statement or omission made in or from any preliminary
prospectus, but corrected in the final prospectus, as amended or supplemented.
(b) Whenever pursuant to Paragraph 5 a registration
statement relating to the Registerable Securities is filed, amended or
supplemented under the Act, the Distributing Holder will indemnify and hold
harmless the Company and each underwriter, each of their respective directors,
each of their respective officers, employees, partners and agents thereto, and
each person, if any, who controls the Company (within the meaning of the Act)
against any losses, claims, damages or liabilities to which the Company or any
such director, officer, employees, partners and agents or controlling person
may become subject under the Act or otherwise, insofar
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as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in any such registration statement or any preliminary
prospectus or final prospectus constituting a part thereof, or any amendment
or supplement thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent that such untrue statement or
alleged untrue statement or omission was made in said registration statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information
furnished by such Distributing Holder for use in the preparation thereof; and
will reimburse the Company or any such director, officer, employees, partners
and agents or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under
this Paragraph 6 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any
indemnifying party, give the indemnifying party notice of the commencement
thereof; but the omission to so notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise
than under this Paragraph 6.
(d) In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnified party will be entitled to participate in, and, to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof with counsel reasonably
satisfactory to such indemnifying party, and after notice from the indemnified
party to such indemnifying party of its election to so assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Paragraph 6 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
7. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SECURITIES.
(a) The Warrant Price shall be subject to adjustment from
time to time as follows:
(i) In case the Company shall at any time after
the date hereof pay a dividend in shares of
Common Stock or make a distribution in
shares of Common Stock, then upon such
dividend or distribution the Warrant Price
in effect immediately prior to such dividend
or distribution shall forthwith be reduced
to a price determined by dividing:
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<PAGE>
(A) an amount equal to the total number
of shares of Common Stock
outstanding immediately prior to
such dividend or distribution
multiplied by the Warrant Price in
effect immediately prior to such
dividend or distribution, by
(B) the total number of shares of Common
Stock outstanding immediately after
such issuance or sale.
For the purposes of any computation to be made in accordance
with the provision of this clause (i), the following provisions shall be
applicable: Common Stock issuable by way of dividend or other distribution on
any stock of the Company shall be deemed to have been issued immediately after
the opening of business on the date following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution.
(ii) In case the Company shall at any time
subdivide or combine the outstanding Common
Stock, the Warrant Price shall forthwith be
proportionately decreased in the case of
subdivision or increased in the case of
combination. Any such adjustment shall
become effective at the time such
subdivision or combination shall become
effective.
(iii) In case the Company shall at any time or
from time to time issue or sell shares of
Common Stock (or securities convertible into
or exchangeable for shares of Common Stock,
or any options, warrants or other rights to
acquire shares of Common Stock) at a price
per share less than the Market Price per
share of Common Stock (treating the price
per share of any security exchangeable or
exercisable into Common Stock as equal to
(x) the sum of the price for such security
convertible, exchangeable or exercisable
into Common Stock plus any additional
consideration payable (without regard to any
anti-dilution adjustments) upon the
conversion, exchange or exercise of such
security into Common Stock divided by (y)
the number of shares of Common Stock
initially underlying such convertible,
exchangeable or exercisable security), other
than issuance or sales of Common Stock
pursuant to any employee benefit plan, then,
and in each such case, the number of shares
of Common Stock thereafter purchasable upon
exercise of a Warrant shall be determined by
multiplying the number of shares of Common
Stock theretofore purchasable upon exercise
of each Warrant by a fraction (A) the
numerator of which shall be the sum of the
number of shares of Common Stock outstanding
on such date plus the number of additional
shares of Common Stock issued (or the
maximum number into which such convertible
or
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<PAGE>
exchangeable securities initially may
convert or exchange or for which such
options, warrants or other rights initially
may be exercised) and (B) the denominator
of which shall be the sum of the number of
shares of Common Stock outstanding on such
date plus the number of shares of Common
Stock which the aggregate consideration for
the total number of such additional shares
of Common Stock so issued (or into which
such convertible or exchangeable securities
may convert or exchange or for which such
options, warrants or other rights may be
exercised plus the aggregate amount of any
additional consideration initially payable
upon conversion, exchange or exercise of
such security) would purchase at the Market
Price per share of Common Stock on such
date. Such adjustment shall be made
whenever such shares, securities, options,
warrants or other rights are issued, and
shall become effective retroactively
immediately after the close of business on
the record date for the determination of
stockholders entitled to receive such
shares, securities, options, warrants or
other rights; PROVIDED, that the
determination as to whether an adjustment
is required to be made pursuant to this
Section 7(a) shall only be made upon the
issuance of such shares or such convertible
or exchangeable securities, options,
warrants or other rights, and not upon the
issuance of the security into which such
convertible or exchangeable security
converts or exchanges, or the security
underlying such option, warrant or other
right. Notwithstanding the foregoing, in
the event of such issuance or sale of
Common Stock at a cash price less than the
Market Price, no such adjustment under this
Section 7(a) need be made to the number of
shares underlying the Warrant unless such
adjustment would require an increase or
decrease of at least 1% of the number of
shares underlying the Warrant. Any lesser
adjustment shall be carried forward and
shall be made at the time of and together
with the next subsequent adjustment which,
together with any adjustment or adjustments
so carried forward, shall amount to an
increase or decrease of at least 1% of
number of shares underlying the Warrant.
For the purpose of this Agreement, the term
"Market Price" shall mean (i) if the Common
Stock is traded in the over-the-counter
market or on the National Association of
Securities Dealers, Inc. Automated
Quotations System ("NASDAQ"), the average
per share closing prices of the Common
Stock on the 20 consecutive trading days
immediately preceding the date in question
as reported by NASDAQ or an equivalent
generally accepted reporting service, or
(ii) if the Common Stock is traded on a
national securities exchange, the average
for the 20
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consecutive trading days immediately
preceding the date in question of the daily
per share closing prices of the Common
Stock on the principal stock exchange on
which it is listed, as the case may be. The
closing price referred to above shall be
the last reported sales price or in case no
such reported sale takes place on such day,
the average of the reported closing bid and
asked prices, in either case on the
national securities exchange or automated
quotation system on which the Common Stock
is then listed. Whenever the number of
shares of Common Stock purchasable upon
exercise of each Warrant is adjusted, the
Warrant Price for each share of Common
Stock payable upon exercise of each Warrant
shall be adjusted by multiplying such
Warrant Price immediately prior to such
adjustment by a fraction, the numerator of
which shall be the number of shares of
Common Stock purchasable upon the exercise
of each Warrant immediately prior to such
adjustment and the denominator of which
shall be the number of shares of Common
Stock purchasable immediately after such
adjustment.
(iv) Within a reasonable time after the close of
each quarterly fiscal period of the Company
during which the Warrant Price or number of
shares issuable upon exercise of this
Warrant has been adjusted as herein
provided, the Company shall deliver to the
Holder a certificate signed by the President
or Vice President of the Company and by the
Treasurer or Assistant Treasurer or the
Secretary or an Assistant Secretary of the
Company, showing in detail the facts
requiring all such adjustments occurring
during such period and the Warrant Price
after each such adjustment.
(b) In the event that the number of outstanding shares of
Common Stock is increased by a stock dividend or distribution payable in
Common Stock or by a subdivision of the outstanding Common Stock, then, from
and after the record date thereof, by reason of such dividend, distribution or
subdivision, the number of shares of Common Stock issuable upon the exercise
of the Warrant shall be increased in proportion to such increase in
outstanding shares. In the event that the number of shares of Common Stock
outstanding is decreased by a combination of the outstanding Common Stock,
then, from and after the record date thereof, the number of shares of Common
Stock issuable upon the exercise of the Warrant shall be decreased in
proportion to such decrease in the outstanding shares of Common Stock.
(c) In case of any reorganization or reclassification of the
outstanding Common Stock (other than a change in par value, or from par value
to no par value, or as a result of a subdivision or combination), or in case
of any consolidation of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger in which the
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Company is the continuing corporation and which does not result in any
reclassification of the outstanding Common Stock), or in case of any sale or
conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety, the holder of the Warrant then
outstanding shall thereafter have the right to purchase the kind and amount of
shares of common stock and other securities and property receivable upon such
reorganization, reclassification, consolidation, merger, sale or conveyance by
a holder of the number of shares of Common Stock which the holder of the
Warrant shall then be entitled to purchase; such adjustments shall apply with
respect to all such changes occurring between the date of this Warrant
Agreement and the date of exercise or expiration of the Warrant.
(d) Subject to the provisions of this Section, in case the
Company shall, at any time prior to the exercise of the Warrant, desire to
declare a dividend or make any distribution of its assets to holders of its
Common Stock, whether as a liquidating or a partial liquidating dividend or
for any other purpose, the Company shall provide the holder of the Warrant
with written notice of such intent not less than thirty (30) days prior to the
record date to determine holders of Common Stock entitled to receive such
distribution and the holder of this Warrant shall have until 5:00 p.m. EST on
the twentieth (20th) day following the actual receipt of such notice to elect
whether to exercise this Warrant in accordance with the terms herein. In the
event of proper election to exercise the Warrant, the holder of this Warrant
shall be deemed to be a holder of Common Stock as of the record date for such
distribution. Should the holder of the Warrant elect to exercise his Warrant
within 20 days after the record date for the determination of those holders of
Common Stock entitled to such dividend or distribution, he shall be entitled
to receive for the Warrant Price per Warrant, in addition to each share of
Common Stock, the amount of such distribution (or, at the option of the
Company, a sum equal to the value of any such assets at the time of such
distribution as determined by the Board of Directors of the Company in good
faith), which would have been payable to the holder had he been the holder of
record of the Common Stock receivable upon exercise of his Warrant on the
record date for the determination of those entitled to such distribution.
(e) In case of the dissolution, liquidation or winding-up of
the Company, all rights under the Warrant shall terminate on a date fixed by
the Company, such date to be no earlier than ten (10) days prior to the
effectiveness of such dissolution, liquidation or winding-up and not later
than five (5) days prior to such effectiveness. Notice of such termination of
purchase rights shall be given to the last registered holder of this Warrant,
as the same shall appear on the books of the Company, by registered mail at
least thirty (30) days prior to such termination date.
(f) In case the Company shall, at any time prior to the
expiration of this Warrant and prior to the exercise thereof, offer to the
holders of its Common Stock any rights to subscribe for additional shares of
any class of the Company, then the Company shall give written notice thereof
to the last registered holder hereof not less than thirty (30) days prior to
the date on which the books of the Company are closed or a record date is
fixed for the determination of the stockholders entitled to such subscription
rights. Such notice shall specify the date as to which
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<PAGE>
the books shall be closed or record date fixed with respect to such offer of
subscription and the right of the holder hereof to participate in such offer
of subscription shall terminate if this Warrant shall not be exercised on or
before the date of such closing of the books or such record date.
(g) Any adjustment pursuant to the aforesaid provisions
shall be made on the basis of the number of shares of Common Stock which the
holder thereof would have been entitled to acquire by the exercise of the
Warrant immediately prior to the event giving rise to such adjustment.
(h) Irrespective of any adjustment in the Warrant Price or
the number or kind of shares purchasable upon exercise of this Warrant,
Warrants previously or hereafter issued may continue to express the same price
and number and kind of shares as are stated in this Warrant.
(i) The Company shall retain a firm of independent public
accountants (who may be any such firm regularly employed by the Company) to
make any computation required under this Section.
(j) If at any time, as a result of an adjustment made
pursuant to this Paragraph 7, the Holder of this Warrant shall become entitled
to purchase any securities other than shares of Common Stock, thereafter the
number of such securities so purchasable upon exercise of each Warrant and the
Warrant Price for such shares shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Common Stock.
8. FRACTIONAL SHARES.
The Company shall not be required to issue fractions of shares of
Common Stock on the exercise of this Warrant; provided, however, that if a
Holder exercises all the Warrants held of record by such Holder, the
fractional interests shall be eliminated by rounding any fraction up to the
nearest whole number of shares, if the fraction is equal to or greater than
.5, and down if the fraction is less than .5.
9. MISCELLANEOUS.
(a) This Warrant shall be governed by and in accordance with
the laws of the State of New York.
(b) All notices, requests, consents and other communications
hereunder shall be made in writing and shall be deemed to have been duly made
when delivered, or mailed by registered or certified mail, return receipt
requested: (i) if to a Holder, to the address of such Holder as shown on the
books of the Company, or (ii) if to the Company, One Penn Plaza, Suite 1503,
New York, NY 10119.
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(c) All the covenants and provisions of this Warrant by or
for the benefit of the Company and the Holders inure to the benefit of their
respective successors and assigns hereunder.
(d) Nothing in this Warrant other than Section 6 shall be
construed to give to any person or corporation other than the Company and the
registered Holder or Holders, any legal or equitable right, and this Warrant
is for the sole and exclusive benefit of the Company and the Holder or Holders.
IN WITNESS WHEREOF, Trans World Gaming Corp. has caused this
Warrant to be signed by its duly authorized officer and this Warrant to be dated
October 15, 1999.
TRANS WORLD GAMING CORP.
By:
--------------------------
Its:
--------------------------
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FORM OF
NOTICE OF EXERCISE
(To be executed upon partial or full
exercise of the Warrants represented hereby)
The undersigned registered Holder of the Warrants represented by the attached
Warrant Certificate irrevocably exercises such Warrant for and purchases
______________________ (___________) shares of Common Stock of Trans World
Gaming Corp. (the "Company").
The undersigned herewith makes payment therefore in the amount of $
____________, consisting of $ ____________ by wire transfer or certified or
cashiers' check at a price of $_____ per share and requests that a certificate
(or certificates) in denominations of ______________ (___________) shares of
Common Stock of the Company hereby purchased be issued in the name of and
delivered to the undersigned or such designee of the undersigned and, if such
shares of Common Stock (together with any shares issued upon exercise of other
Warrants or replacement Warrants) shall not include all of the shares of
Common Stock issuable upon exercise of all Warrants represented by such
Warrant Certificate (or if a new or replacement Warrant is otherwise to be
provided pursuant to the Warrant Certificate), that a new or replacement
Warrant Certificate of like tenor for the number of Warrants not being
exercised (and not being surrendered) hereunder be issued in the name of and
delivered to the undersigned, whose address is __________________________.
Dated: __________.
--------------------------------
(Signature of Registered Holder)
By:
-----------------------------
Title:
--------------------------
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