Exhibit 4.1
EXHIBIT A
ACCLAIM ENTERTAINMENT, INC.
10% Convertible Subordinated Note due 2002
ACCLAIM ENTERTAINMENT, INC., a Delaware corporation, promises to pay
to ______________________________________________________________________ or
registered assigns, the principal sum of _____________________________ Dollars,
on March 1, 2002.
Interest Payment Dates: March 1 and September 1
Regular Record Dates: February 15 and August 15
Additional provisions of this Security are set forth on other side
of this Security.
IN WITNESS WHEREOF, ACCLAIM ENTERTAINMENT, INC. has caused this
instrument to be duly signed.
ACCLAIM ENTERTAINMENT, INC.
By: _____________________________
Co-Chairman of the Board and
Chief Executive Officer
CERTIFICATE OF AUTHENTICATION By: _____________________________
Secretary
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company,
as Trustee, certifies that this is
one of the Securities referred to
in the within mentioned Indenture.
IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company,
as Trustee
By: __________________________
Authorized Signatory
Dated:
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1. Interest. ACCLAIM ENTERTAINMENT, INC., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Security at 10% per annum from and including February 26, 1997 to maturity or
earlier redemption. The Company will pay interest semi-annually on March 1 and
September 1 of each year commencing September 1, 1997. Interest on the
Securities will accrue from the most recent date to which interest has been paid
or if no interest has been paid, from February 26, 1997. If an Interest Payment
Date falls on a day that is not a Business Day, the interest payment to be made
on such Interest Payment Date will be made on the next succeeding Business Day
with the same force and effect as if made on such Interest Payment Date, and no
additional interest will accrue as a result of such delayed payment. Interest
will be computed on the basis of a 360-day year of twelve 30-day months. The
Company shall pay interest on overdue principal at the rate borne by this
Security, and it shall pay interest on overdue installments of interest at the
same rate to the extent lawful.
2. Method of Payment. The Company will pay interest on the
Securities (except defaulted interest) to the Persons who are the registered
Holders of the Securities at the close of business on the February 15 or August
15 next preceding the Interest Payment Date. Holders must surrender Securities
to a Paying Agent to collect principal payments. The Company will pay principal
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. The Company, however, may pay
principal and interest by its check payable in such money. It may mail an
interest check to a Holder's registered address.
3. Registrar and Agents. Initially, IBJ ▇▇▇▇▇▇▇▇ Bank & Trust
Company will act as the Registrar, the Paying Agent, the Conversion Agent and
agent for service of notices and demands. The Company may change any Registrar,
co-registrar, Paying Agent, Conversion Agent and agent for service of notices
and demands without the prior consent of the Holders but upon notice to the
Holders. The Company or any of its Subsidiaries may act as Registrar,
co-registrar, Paying Agent or Conversion Agent.
4. Indenture; Limitations. The Company issued the Securities under
an Indenture dated as of February 26, 1997 (the "Indenture") between the Company
and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company (the "Trustee"). Capitalized terms herein
are used as defined in the Indenture unless otherwise defined herein. The terms
of the Securities include those stated in the Indenture and those made part of
the Indenture by the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of the Indenture. The Securities are
subject to all such terms, and the Holders of the Securities are referred to the
Indenture and said Act for a statement of such terms. The Securities are general
unsecured obligations of the Company limited to $50,000,000 aggregate principal
amount.
5. Optional Redemption by the Company. The Company may, at its
option (subject to the rights of holders of Senior Indebtedness), redeem the
Securities, in whole or from time to time in part, on any date on or after March
1, 2000, at the following redemption prices, expressed as percentages of the
principal amount, if redeemed during the 12-month period beginning March 1, of
the years indicated below:
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Year Percentage
---- ----------
2000..................... 104.00%
2001..................... 102.00%
and at maturity at 100% of principal, together in the case of any such
redemption with accrued interest to the Redemption Date (subject to the right of
Holders of record on the relevant Regular Record Date to receive interest due on
an Interest Payment Date that is on or prior to the Redemption Date).
6. Notice of Redemption. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder to be redeemed at such ▇▇▇▇▇▇'s address appearing in the Note Register.
Securities in denominations larger than $1,000 principal amount may be redeemed
in part, but only in an amount of $1,000 principal amount or integral multiples
thereof. In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation of this Security. On and after
the Redemption Date, interest ceases to accrue on Securities or portions of them
called for redemption.
7. Repurchase Event. In the event of a Repurchase Event (as
hereinafter defined) each Holder of Securities shall have the right (which right
may not be waived by the Board of Directors or the Trustee) at the Holder's
option, to require the Company to repurchase all of such Holder's Securities, or
any portion thereof that is an integral multiple of $1,000, on the date (the
"Repurchase Date") that is 45 calendar days after the date of the Company Notice
(as defined below), at a price equal to 100% of the principal amount of such
Securities to be repurchased (the "Repurchase Price"), together with accrued
interest to the Repurchase Date; provided however, that a Repurchase Event shall
not be deemed to have occurred if the closing price per share of the Common
Stock for any five Trading Days within the period of ten consecutive Trading
Days ending immediately before the Repurchase Event shall equal or exceed 110%
of the Conversion Price (as defined herein) of such Securities in effect on each
such Trading Day. A "beneficial owner" shall be determined in accordance with
Rule 13d-3 promulgated by the Commission under the Exchange Act, as in effect on
the date of execution of the Indenture. A Repurchase Event shall be deemed to
have occurred at such time after February 26, 1997 if: (i) any Person (including
any syndicate or group deemed to be a "Person" under Section 13(d)(3) of the
Exchange Act), other than the Company, any Subsidiary, or any current or future
employee or director benefit plan of the Company or any Subsidiary or any entity
holding capital stock of the Company for or pursuant to the terms of such plan,
or an underwriter engaged in a firm commitment underwriting in connection with a
public offering of capital stock of the Company, is or becomes the beneficial
owner, directly or indirectly, through a purchase, merger or other acquisition
transaction or series of transactions of shares of capital stock of the Company
entitling such Person to exercise 50% or more of the total voting power of all
shares of capital stock of the Company entitled to vote generally in the
election of directors; (ii) the Company sells or transfers all or substantially
all of the assets of the Company to another Person; (iii) there occurs any
consolidation of the
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Company with, or merger of the Company into, any other Person, any merger of
another Person into the Company (other than a merger (a) which does not result
in any reclassification, conversion, exchange or cancellation of outstanding
shares of Common Stock, (b) which is effected solely to change the jurisdiction
of incorporation of the Company and results in a reclassification, conversion or
exchange of outstanding shares of Common Stock solely into shares of Common
Stock or (c) a transaction in which the stockholders of the Company immediately
prior to such transaction owned, directly or indirectly, immediately following
such transaction, a majority of the combined voting power of the voting capital
stock of the corporation resulting from the transaction, such stock to be owned
by such stockholders in substantially the same proportion as their ownership of
the voting stock of the Company immediately prior to such transaction); (iv) a
change in the Board of Directors in which the individuals who constituted the
Board of Directors at the beginning of the 24-month period immediately preceding
such change (together with any other director whose election by the Board of
Directors or whose nomination for election by the stockholders of the Company
was approved by a vote of at least a majority of the directors then in office
either who were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the directors then in office; or (v) the Common Stock
is the subject of a "Rule 13e-3 transaction" as defined under the Exchange Act.
8. Conversion. Beginning April 28, 1997, a Holder of a Security may
convert such Security into Common Stock of the Company at any time before the
close of business on March 1, 2002. If the Security is called for redemption or
delivered for repurchase, the Holder may convert it at any time before the close
of business on the last Business Day prior to the Redemption Date or the
Repurchase Date, as the case may be, unless the Company defaults in making the
payment due upon redemption or repurchase. The initial Conversion Price is $5.18
per share, subject to adjustment in certain events as set forth in the
Indenture. To determine the number of shares issuable upon conversion of a
Security, divide the principal amount to be converted by the Conversion Price in
effect on the conversion date and then round to the nearest 1/100th share. The
Company will deliver a check for any fractional share.
To convert a Security, a Holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender the Security to the
Conversion Agent or Registrar, (3) furnish appropriate endorsements and transfer
documents if required by the Registrar or Conversion Agent and (4) pay any
transfer or similar tax if required. Securities (or portion of a Security)
surrendered for conversion during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date (except Securities called for redemption
on a Redemption Date within such period) must be accompanied by payment of an
amount equal to the interest thereon which the registered Holder is to receive.
In the case of any Securities that have been converted after any Regular Record
Date but on or before the next Interest Payment Date, interest due on such
Interest Payment Date will be payable on such Interest Payment Date,
notwithstanding such conversion, to the Holder of record of such Note as of such
Regular Record Date. Except as described above, no interest on converted
Securities will be payable by the Company on any Interest Payment Date
subsequent to the date
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of conversion. No other payment or adjustment for interest or dividends will be
made upon conversion.
If the Company is a party to a consolidation or merger or a transfer
or lease of all or substantially all of its assets, the right to convert a
Security into Common Stock may be changed into a right to convert it into
securities, cash or other assets of the Company or another Person.
9. Subordination. This Security is subordinated to all existing and
future Senior Indebtedness of the Company as defined in the Indenture and to the
Trustee's fees and expenses as more fully described in the Indenture. To the
extent and in the manner provided in the Indenture, Senior Indebtedness must be
paid in cash before any payment may be made to any Holders of Securities. Any
Securityholder by accepting this Security agrees to the subordination and
authorizes the Trustee to give it effect.
In addition to all other rights of Senior Indebtedness described in
the Indenture, the Senior Indebtedness shall continue to be Senior Indebtedness
and entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of any instrument relating to the
Senior Indebtedness or extension or renewal of the Senior Indebtedness.
10. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 principal amount and
integral multiples thereof. A Holder may register the transfer of or exchange of
the Securities in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar shall not be required to exchange or register a
transfer of any Securities for a period of 15 days immediately preceding the
first mailing of notice of redemption of Securities to be redeemed or of any
Security selected, called or being called for redemption except, in the case of
any Security where public notice has been given that such Security is to be
redeemed in part, the portion thereof not to be redeemed.
11. Persons Deemed Owners. The registered Holder of a Security shall
be treated as the owner of it for all purposes.
12. Unclaimed Money. If money for the payment of principal and
premium, if any, or interest on any Securities remains unclaimed for two years,
the Trustee or any Paying Agent will pay the money back to the Company at its
request. After that, Holders may look only to the Company for payment.
13. Merger or Consolidation. The Company may not consolidate with,
or merge into, or transfer or lease all or substantially all of its assets to,
another Person unless: the Person is a corporation; such corporation assumes by
supplemental indenture all the obligations of the Company under the Securities
and the Indenture; at the time thereof and after giving effect to the
transaction no Default or Event of Default shall exist; and certain other
conditions set forth in the Indenture are satisfied.
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14. Discharge Prior to Redemption or Maturity. The Indenture will be
discharged and canceled except for certain sections thereof upon payment of
funds sufficient to pay principal and premium, if any, or interest due on such
payment or redemption of all Outstanding Securities.
15. Amendment and Waiver. Subject to certain exceptions, the
Indenture or the Securities may be amended with the consent of the Holders of at
least two-thirds in principal amount of the Securities then Outstanding (as
defined in the Indenture) and any existing Event of Default may be waived with
the consent of the Holders of a majority in principal amount of the Securities
then Outstanding. Without the consent of or notice to any Securityholder, the
Company may amend the Indenture or the Securities to, among other things,
provide for uncertificated Securities, to cure any ambiguity, defect or
inconsistency or make any other change that does not adversely affect the rights
of any Securityholder.
16. Successors. When a successor assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor will be
released from those obligations.
17. Defaults and Remedies. If an Event of Default, as defined in the
Indenture, occurs and is continuing, the Trustee or the Holders of at least 30%
in principal amount of Securities then Outstanding may declare all the
Securities to be due and payable in the manner and with the effect provided in
the Indenture, and upon any such declaration such principal and accrued interest
shall become due and payable immediately. Holders of Securities may not enforce
the Indenture or the Securities except as provided in the Indenture. The Trustee
has the absolute right to require indemnity satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in principal amount of the Securities then outstanding may
direct the Trustee in its exercise of any trust or power. The Company is
required to file periodic reports with the Trustee as to the absence of Default.
An Event of Default is: the Company defaults in the payment of the principal of
or premium, if any, of any of the Securities as and when the same shall become
due and payable either at maturity, or upon redemption; the Company defaults in
the payment of any installment of interest upon any of the Securities as and
when the same shall become due and payable and the default continues for a
period of 30 days; the Company defaults in the payment of the Repurchase Price
in respect of any Security on the Repurchase Date therefor, whether or not such
payment is prohibited by the subordination provisions of the Indenture; the
Company fails to perform or breaches any other covenant or agreement in the
Securities or in the Indenture and the default continues for 60 days after
receipt by the Company of notice in accordance with the Indenture; or certain
events of bankruptcy, insolvency or reorganization of the Company or any
Significant Subsidiary.
18. Trustee Dealings with the Company. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its affiliates, and may otherwise deal with
the Company or its affiliates, as if it were not the Trustee.
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19. No Recourse Against Others. No stockholder, director, officer or
incorporator, as such, past, present or future, of the Company or any successor
corporation shall have any liability for any obligation of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
20. Authentication. This Security shall not be valid until the
Trustee signs the certificate of authentication on the other side of this
Security.
21. Abbreviations. Customary abbreviations may be used in the name
of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture. It also will furnish the text of
this Security in larger type. Requests may be made to: Acclaim Entertainment,
Inc., One Acclaim Plaza, Glen Cove, New York 11542, Attention: Secretary.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST
THEREIN MAY BE OFFRED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM
REGISTRATION UNDER SUCH SECURITIES ACT AND SUCH LAWS WHICH, IN THE
OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS
AVAILABLE.
ASSIGNMENT FORM
If you the Holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
(INSERT ASSIGNEE'S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER)
______________________________________
______________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
______________________________________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
Date:___________________________________________________________________________
Your signature:_________________________________________________________________
(Sign exactly as your name appears on the
other side of this Security)
Signature guaranteed by:________________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND
LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
CONVERSION NOTICE
To convert this Security into Common Stock of the Company, check the box:
|_|
To convert only part of this Security, state the principal amount to be
converted (which must be a minimum of $1,000 or any integral multiple thereof):
-------------------------
$
-------------------------
If you want the stock certificate made out in another Person's name, fill in the
form below:
(INSERT OTHER Person'S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER)
______________________________________
______________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type other Person's name, address and zip code)
Date:___________________________________________________________________________
Your signature:_________________________________________________________________
(Sign exactly as your name appears on the
other side of this Security)
Signature guaranteed by:________________________________________________________
If you want the stock certificate made out in another
Person's name, please have your signature guaranteed by an
eligible guarantor institution (banks, stockbrokers,
savings and loan associations and credit unions with
membership in an approved signature guarantee medallion
program), pursuant to S.E.C.
Rule 17Ad-15.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 6.09 of the Indenture, check the box:
|_|
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 6.09 of the Indenture, state the amount:
_____________________________________
(in an integral multiple of $1,000)
Date:_______________ Signature(s): __________________
___________________________________________
(Sign exactly as your name(s) appear(s)
on the other side of this Security)
Signature(s) guaranteed by:______________________________________________
THE SIGNATURES SHOULD BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.