Document:

exhibit10-1.htm

     

                                                                                    Exhibit
10.1

     

    THE
WARRANT AMENDED BY THIS WARRANT MODIFICATION AGREEMENT AND ANY SECURITIES
ACQUIRED UPON THE EXERCISE OF SUCH WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR ANY
STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.

    

    ________________________________________

    

    WMS
INDUSTRIES INC.

    

    COMMON
STOCK PURCHASE WARRANT MODIFICATION AGREEMENT

    

    _________________________________________

    

    

    

    This
Common Stock Purchase Warrant Modification Agreement (this “Agreement”) modifies
the terms of that certain Common Stock Purchase Warrant issued by WMS Industries
Inc., a Delaware corporation (the “Company”), to HASBRO,
INC. (“Hasbro”
or the “Warrantholder”)
effective September 15, 2003 (the “Warrant”).  Capitalized
terms used in this Agreement and not defined herein have the meanings set forth
in the Warrant.  In consideration of the mutual covenants and
representations contained herein and other good and valuable consideration, each
of the Company and Hasbro agrees to the following modifications to the
Warrant:

    

    1. Expiration
Date.  The first paragraph of the Warrant is amended to delete
the phrase “on September 14, 2013 (the “Expiration Date”)”
and substitute in place thereof “on the Expiration Date (as defined below)” and
to add the following sentence at the end of such paragraph:

     

    “Expiration Date”
means December 31, 2018 or, solely in the event that the term of that certain
Gaming Device License Agreement dated as of April 1, 2009 between Hasbro and
Hasbro International, Inc., as licensor, and WMS Gaming Inc., as licensee, is
extended for the Extension Term (as defined in such Gaming Device License
Agreement), December 31, 2021.

     

    2. Vesting of the
Warrant. Section 1.1 of the Warrant is deleted in its entirety and
replaced with the following:

     

    Vesting. The Warrant
shall vest with respect to 20% of the Warrant Shares per year commencing January
1, 2007 and continuing on each anniversary of January 1, 2007 until fully
vested.

     

    

     

    3. Representations and
Warranties.  Each of Hasbro and the Company, severally and not
jointly, hereby represents and warrants solely with respect to itself as
follows:

     

    3.1. This
Agreement has been duly authorized and executed by it and is a valid and binding
obligation, respectively, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting the enforcement of creditors’ rights.

     

    3.2. The
execution, delivery and/or performance by it of this Agreement shall not, by the
lapse of time, the giving of notice or otherwise, constitute a violation of any
applicable law or a breach of any provision contained in such party’s
Certificate of Incorporation or Bylaws (each as amended, restated or otherwise
modified through the date hereof) or contained in any agreement, instrument or
document to which it is a party or by which it is bound.

     

    3.3. No
consent, approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the valid
execution or performance of any of its obligations hereunder.

     

    4. Miscellaneous.

     

    4.1. Entire
Agreement.  This Agreement and the Warrant constitute the
entire agreement between the Company and the Warrantholder with respect to the
subject matter hereof and thereof.

     

    4.2. Binding Effects;
Benefits.  This Agreement shall inure to the benefit of and
shall be binding upon the Company and the Warrantholder and their respective
heirs, legal representatives, successors and assigns.  Nothing in this
Agreement, expressed or implied, is intended to or shall confer on any person
other than the Company and the Warrantholder, or their respective heirs, legal
representatives, successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

     

    4.3. Section and Other
Headings.  The section and other headings contained in this
Agreement are for reference purposes only and shall not be deemed to be a part
of this Agreement or to affect the meaning of interpretation of this
Agreement.

     

    4.4. No Further
Modifications.  Except as expressly set forth in this
Agreement, the terms of the Warrant remain in full force and effect in
accordance with their terms.

     

     

    
      
        
        

      

      
        1

        
        

      

      
        
        

      

    

    4.5. Further
Assurances.  Each of the Company and the Warrantholder shall do
and perform all such further acts and things and execute and deliver all such
other certificates, instruments and documents as the Company or the
Warrantholder may, at any time and from time to time, reasonably request in
connection with the performance of any of the provisions of this
Agreement.

     

    

     

    IN
WITNESS WHEREOF, each of the Company and Hasbro has caused this Agreement to be
signed by its duly authorized officer.

    

    

    WMS
INDUSTRIES INC.

    

    

    By:  /s/ Orrin J.
Edidin

    Name: Orrin J. Edidin

    Title:
President

    

    

    
      	
               
      

            	
              HASBRO,
      INC.

            

    

    

    

    By: /s/ Brian
Goldner

    Name:
Brian Goldner

    Title:
President and CEO

    

    Dated:                      June
11, 2009

    

	    
      
        
        

      

      
        2exhibit10-2.htm

    
                                                                                              Exhibit
10.2

       

      THIS
WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR ANY
STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.

      

      ________________________________________

      

      WMS
INDUSTRIES INC.

      

      COMMON
STOCK PURCHASE WARRANT

      

      _________________________________________

      

      

      

      This
certifies that, for good and valuable consideration, WMS Industries Inc., a
Delaware corporation (the “Company”), grants to
HASBRO, INC. (“Hasbro” or the “Warrantholder”), the
right to subscribe for and purchase from the Company the number of validly
issued, fully paid and nonassessable shares (the “Warrant Shares”) of
the Company’s Common Stock, par value $0.50 per share (the “Common Stock”)
determined pursuant to the schedule set forth in Section 1 below, at the
purchase price per share of $30.03 (the “Exercise Price”),
from time to time after vesting of the Warrant pursuant to Section 1 below and
before 5:00 PM Eastern Standard Time on the Expiration Date (as defined below),
all subject to the terms, conditions and adjustments herein set forth.
“Expiration Date” means December 31, 2018 or, solely in the event that the term
of that certain Gaming Device License Agreement dated as of April 1, 2009
between Hasbro and WMS Gaming Inc. (the “License Agreement”)
is extended for the Extension Term (as defined in the License Agreement),
December 31, 2021.

      

      1. Duration
and Exercise of Warrant; Limitation on Exercise; Payment of Taxes.

       

      1.1. Warrant
Shares.  The number of Warrant Shares, if any,
purchasable  under this Warrant shall be determined based on the date
by which Hasbro executes and delivers to the Company an unqualified written
consent to an assignment of the License Agreement (including, without
limitation, “assignment” or “Constructive Assignment” (as such terms are defined
in section 20.1 of the Basic Terms of such Agreement)) (an “Assignment”), if such
consent is requested by the Company and timely delivered by Hasbro as
follows:

       

      

       

      
        	
                Date
      of Delivery of Hasbro Consent to Assignment

              	
                Number
      of Warrant Shares

              
	
                On
      or before December 31, 2011

              	
                500,000

              
	
                After
      December 31, 2011 but on or before December 31, 2012

              	
                475,000

              
	
                After
      December 31, 2012 but on or before December 31, 2013

              	
                450,000

              
	
                After
      December 31, 2013 but on or before December 31, 2014

              	
                425,000

              
	
                After
      December 31, 2014 but on or before December 31, 2015

              	
                400,000

              
	
                After
      December 31, 2015 but prior to the Expiration Date

              	
                375,000

              

      

       

      

       

      1.1. Vesting.  The
Warrant shall vest with respect to the number of Warrant Shares determined
pursuant to Section 1.1 solely upon the consummation of an Assignment for which
Hasbro has executed and delivered an unqualified written consent.

       

      1.2. Duration and Exercise of
Warrant.  Subject to the terms and conditions set forth herein,
the Warrant may be exercised, in whole or in part, by the Warrantholder
by:

       

      1.2.1. the
delivery of this Warrant to the Company, with a duly executed Exercise Form
attached as Exhibit A hereto specifying the number of vested Warrant Shares to
be purchased, prior to the Expiration Date; and

       

      1.2.2. the
delivery of payment to the Company, for the account of the Company, by cash, by
wire transfer of immediately available funds or by certified or bank cashier’s
check, of the Exercise Price for the number of vested Warrant Shares specified
in the Exercise Form in lawful money of the United States of
America.  The Company agrees that such Warrant Shares shall be deemed
to be issued to the Warrantholder as the record holder of such Warrant Shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for the Warrant Shares as aforesaid.

       

      1.3. Conversion of
Warrant.

       

      1.3.1.  Right to
Convert.  In addition to, and without limiting, the other
rights of the Warrantholder hereunder, the Warrantholder shall have the right
(the "Conversion
Right") to convert this Warrant or any part hereof into Warrant Shares at
any time and from time to time to the extent that this Warrant has vested and
prior to the Expiration Date. Upon exercise of the Conversion Right, the Company
shall deliver to the Warrantholder, without payment by the Warrantholder of any
Exercise Price or any cash or other consideration, that number of Warrant Shares
computed using the following formula:

       

      X= Y
(A-B)

      -------

      A

      

      Where:                      X=
The number of Warrant Shares to be issued to the Warrantholder

      

      
        	
                 
      

              	
                Y=
      The number of Warrant Shares purchasable pursuant to this Warrant or such
      lesser number of Warrant Shares as may be selected by the
      Warrantholder

              

      

      
        	
                 
      

              	
                A=
      The Fair Market Value (as defined in Section 6.1.6) of one Warrant Share
      as of the Conversion Date

              

      

      

      B= The Exercise Price

       

      
        
          
          

        

        
          1

          
          

        

        
          
          

        

      

      
        
                                                     
1.3.2. Method of Conversion.
The Conversion Right may be exercised by the Warrantholder by the surrender of
this Warrant to the Company, together with a written statement (the "Conversion
Statement") in the form of Exhibit A hereto specifying that the
Warrantholder intends to exercise the Conversion Right and indicating the number
of Warrant Shares that are the subject of such exercise of the Conversion Right.
Such conversion shall be effective upon the Company's receipt of this Warrant,
together with the Conversion Statement, or on such later date as is specified in
the Conversion Statement (the "Conversion Date")
and, at the Warrantholder’s election, may be made contingent upon the closing of
the consummation of the sale of Common Stock pursuant to a Registration
Statement (as defined in Section 8.1 below). Certificates for the Warrant Shares
so acquired shall be delivered to the Warrantholder within a reasonable time,
not exceeding three (3) Business Days after the Conversion Date.  A
“Business Day”
is a day other than Saturday, Sunday or a day on which national banks are
authorized by law to close in the State of Illinois.

        

      

       

      1.4. Warrant Shares
Certificate.  A stock certificate or certificates for the
Warrant Shares specified in the Exercise Form shall be delivered to the
Warrantholder within three (3) Business Days after receipt of the Exercise Form
and receipt of payment of the exercise price.  If this Warrant shall
have been exercised only in part, the Company shall, at the time of delivery of
the stock certificate or certificates, deliver to the Warrantholder a new
Warrant evidencing the rights to purchase the remaining Warrant Shares, which
new Warrant shall in all other respects be identical to this
Warrant.

       

      1.5. Payment of
Taxes.  The issuance of certificates for Warrant Shares shall
be made without charge to the Warrantholder for any stock transfer or other
issuance tax or other incidental expense of issuance; provided, however, that the
Warrantholder shall be required to pay any and all taxes which may be payable in
respect of any transfer involved in the issuance and delivery of any certificate
in a name other than that of the Warrantholder as reflected upon the books of
the Company.

       

      2. Warrantholder
Representations and Warranties; Restrictions on Transfer; Restrictive
Legends.

       

      2.1. The
Warrantholder represents and warrants that:

       

      2.1.1. The
Warrantholder (i) is acquiring this Warrant, and (ii) upon exercise of this
Warrant will acquire the Warrant Shares (this Warrant and the Warrant Shares
collectively are referred to herein as the “Securities”) for its
own account for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except pursuant to
sales registered or exempted under the 1933 Act.

       

      2.1.2. The
Warrantholder is an “accredited investor” as that term is defined in Rule
501(a)(3) of Regulation D under the 1933 Act.

       

      2.1.3. The
Warrantholder understands that the Securities are being offered and sold to it
in reliance on specific exemptions from the registration requirements of the
United States federal and state securities laws and that the Company is relying
upon the truth and accuracy of, and the Warrantholder’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Warrantholder set forth herein in order to determine the availability of
such exemptions and the eligibility of the Warrantholder to acquire the
Securities.

       

      2.1.4. The
Warrantholder has been furnished with all materials relating to the business,
finances and operations of the Company and materials relating to the offer and
sale of the Securities that have been requested by the
Warrantholder.

       

      2.1.5. The
Warrantholder understands that no United States federal or state agency or any
other government or governmental agency has passed on or made any recommendation
or endorsement of the Securities or the fairness or suitability of the
investment in the Securities nor have such authorities passed upon or endorsed
the merits of the offering of the Securities.

       

      2.1.6. The
Warrantholder understands that (i) the Securities have not been and are, except
as provided in Section 8 hereof, not being
registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned, pledged or transferred or otherwise disposed
of unless (A) subsequently registered thereunder, (B) the Warrantholder shall
have delivered to the Company an opinion of counsel, in form and substance
reasonably acceptable to the Company, to the effect that such Securities to be
sold, assigned or transferred may be sold, assigned or transferred pursuant to
an exemption from such registration, or (C) the Warrantholder provides the
Company with reasonable assurance that such Securities can be sold, assigned or
transferred pursuant to Rule 144 promulgated under the 1933 Act (or a successor
rule thereto) (“Rule
144”); and (ii) any sale of the Securities made in reliance on Rule 144
may be made only in accordance with the terms of Rule 144 and further, if Rule
144 is not applicable, any resale of the Securities under circumstances in which
the seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 1933 Act) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the
Securities and Exchange Commission (the “Commission”)
thereunder.

       

      2.1.7. The
Warrantholder shall not sell, assign or otherwise transfer, pledge or
hypothecate all or part of this Warrant without the prior written consent of the
Company; provided that (x) any such sale, assignment or other transfer by the
Warrantholder of the Warrant in its entirety to an entity owned or controlled by
the Warrantholder (but only for so long as it remains so owned or controlled and
such entity agrees (i) to be bound by the terms and conditions of this Warrant
pursuant to an agreement reasonably acceptable to the Company (an "Assumption
Agreement") and (ii) to transfer this Warrant back to the Warrantholder
if it ceases to be owned or controlled by the Warrantholder), and (y) any such
sale, assignment or other transfer by the Warrantholder of the Warrant in its
entirety to the successor to the Warrantholder or substantially all of
Warrantholder’s assets or business in connection with (i) the merger,
consolidation or reorganization of the Warrantholder or (ii) the sale,
assignment, transfer or other disposition of all or substantially all of the
Warrantholder's assets or business in one or more related transactions, provided
that any transferee described in this clause (y) executes an Assumption
Agreement, may be effected without any such consent.

       

      2.1.8. Except as
otherwise agreed to by the Company, each Warrant shall be stamped or otherwise
imprinted with a legend in substantially the following form:

       

      THIS
WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, ASSIGNED, PLEDGED, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.

       

      Except as
otherwise agreed to by the Company, each stock certificate for Warrant Shares
issued upon the exercise of any Warrant and each stock certificate issued upon
the direct or indirect transfer of any such Warrant Shares shall be stamped or
otherwise imprinted with a legend in substantially the following
form:

       

      
        
          
          

        

        
          2

          
          

        

        
          
          

        

         

      

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, ASSIGNED, PLEDGED,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT AND SUCH LAWS.

       

      2.1.9. Except
with respect to the restrictions set forth in Section 2.1.7 above, the
restrictions imposed under this Section 2 upon the transferability of the
Warrant and the shares of Common Stock acquired upon the exercise of this
Warrant shall cease when (i) the Warrant Shares have been sold pursuant to a
registration statement that is effective under the 1933 Act, (ii) the Company is
presented with an opinion of counsel reasonably satisfactory to the Company that
such restrictions are no longer required in order to insure compliance with the
1933 Act or with a Commission "no-action" letter stating that future transfers
of such securities by the transferor or the contemplated transferee would be
exempt from registration under the 1933 Act, or (iii) such securities may be
transferred by the holder in accordance with Rule 144 without the holder being
deemed an underwriter of such securities within the meaning of Section 2(a)(11)
of the 1933 Act.  When such restrictions terminate, the Company shall,
or shall instruct its transfer agent to, promptly, and without expense to the
holder issue new securities in the name of the holder not bearing the legends
required under this Section 2.

       

      2.1.10. At the
Warrantholder’s option, this Warrant may be exchanged for one or more other
Warrants representing the right to purchase a like aggregate number of shares of
Common Stock upon surrender of such Warrant(s) to the Company as is represented
by this Warrant; provided, however, that this Warrant shall not be exchanged for
other Warrants unless each such new Warrant represents the right to purchase at
least 50,000 shares of Common Stock. Whenever this Warrant is so surrendered to
the Company for exchange, the Company shall execute and deliver the Warrants
which the Warrantholder is entitled to receive. All Warrants issued upon any
registration of transfer or exchange of Warrants shall be the valid obligations
of the Company, evidencing the same rights, and entitled to the same benefits,
as the Warrants surrendered upon such registration of transfer or exchange. No
service charge shall be made for any exchange of this Warrant.

       

      3. Company Representations and
Warranties.

       

      The
Company hereby represents and warrants as follows:

      3.1. All
Warrant Shares that are issued upon the exercise of this Warrant will, upon
issuance, be validly issued, fully paid, and nonassessable, not subject to any
preemptive rights, and free from all taxes, liens, security interests, charges,
and other encumbrances with respect to the issue thereof, other than taxes with
respect to any transfer occurring contemporaneously with such
issue.

       

      3.2. During
the period within which this Warrant may be exercised, the Company will at all
times have authorized and reserved, and keep available free from preemptive
rights, a sufficient number of shares of Common Stock to provide for the
exercise of the rights represented by this Warrant.

       

      3.3. This
Warrant has been duly authorized and executed by the Company and is a valid and
binding obligation of the Company enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting the enforcement of creditors’
rights.

       

      3.4. The
execution, delivery and/or performance by the Company of this Warrant shall not,
by the lapse of time, the giving of notice or otherwise, constitute a violation
of any applicable law or a breach of any provision contained in the Company's
Certificate of Incorporation (as amended, restated or otherwise modified) or
Bylaws (as amended, restated or otherwise modified) or contained in any
agreement, instrument or document to which the Company is a party or by which it
is bound.

       

      3.5. No
consent, approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the valid
issuance of the Warrant or for the performance of any of the Company's
obligations hereunder, except in connection with listing of the Warrant Shares
on the New York Stock Exchange, which listing will be effected in accordance
with the rules and regulations of the New York Stock Exchange and in connection
with the registration of the Warrant Shares under the 1933 Act as provided in
Section 8.

       

      3.6. The
Company, at its expense, will take all such action as may be necessary to assure
that the Common Stock issuable upon the exercise of this Warrant may be so
issued without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange or automated quotation system
upon which any capital stock of the Company may be listed or quoted, as the case
may be. Such action by the Company may include, but not be limited to, causing
such shares to be duly registered or approved, listed or quoted on relevant
domestic securities exchanges or automated quotation systems.

       

      4. Loss or Destruction of
Warrant.

       

      Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant and, in the case of loss, theft
or destruction, of such indemnification as the Company may require, and, in the
case of such mutilation, upon surrender and cancellation of this Warrant, the
Company will execute and deliver a new Warrant of like tenor.

       

      5. Ownership of
Warrant.

       

      The
Company may deem and treat the person in whose name this Warrant is registered
as the holder and owner hereof (notwithstanding any notations of ownership or
writing thereon made by anyone other than the Company) for all purposes and
shall not be affected by any notice to the contrary.

      

      6. Certain
Adjustments.

       

      6.1. The
number of Warrant Shares purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment as follows:

       

      6.1.1. Stock Dividends,
etc.  If at any time after the date of the issuance of this
Warrant (i) the Company shall fix a record date for the issuance of any stock
dividend payable in shares of Common Stock or (ii) the number of shares of
Common Stock shall have been increased by a subdivision or split-up of shares of
Common Stock, then, on the record date fixed for the determination of holders of
Common Stock entitled to receive such dividend or immediately after the
effective date of such subdivision or split up, as the case may be, the number
of shares to be delivered upon exercise of this Warrant will be increased so
that the Warrantholder will be entitled to receive the number of shares of
Common Stock that such Warrantholder would have owned immediately following such
action had this Warrant been exercised in full immediately prior thereto, and
the Exercise Price will be adjusted as provided below in Section
6.1.5.

      
        
          
          

        

        
          3

          
          

        

        
          
          

        

      

       

      6.1.2. Combination of
Stock.  If the number of shares of Common Stock outstanding at
any time after the date of the issuance of this Warrant shall have been
decreased by a combination of the outstanding shares of Common Stock, then,
immediately after the effective date of such combination, the number of shares
of Common Stock to be delivered upon exercise of this Warrant will be decreased
so that the Warrantholder thereafter will be entitled to receive the number of
shares of Common Stock that such Warrantholder would have owned immediately
following such action had this Warrant been exercised in full immediately prior
thereto, and the Exercise Price will be adjusted as provided below in Section
6.1.5.

      
         

      

      6.1.3. Reorganization, Merger,
etc.  If any capital reorganization of the Company, any
recapitalization or reclassification of the Common Stock, any consolidation of
the Company with or merger of the Company with or into any other person, or any
sale or lease or other transfer of all or substantially all of the assets of the
Company to any other person (each, a “Transaction”), shall
be effected in such a way that the holders of Common Stock shall be entitled to
receive stock, other securities or assets (whether such stock, other securities
or assets are issued or distributed by the Company or another person) with
respect to or in exchange for Common Stock, then, upon exercise of this Warrant,
the Warrantholder shall have the right to receive the kind and amount of stock,
other securities or assets receivable upon such Transaction by a holder of the
number of shares of Common Stock that such Warrantholder would have been
entitled to receive upon exercise of this Warrant had this Warrant been
exercised in full immediately before such Transaction.  This section
shall apply to successive reorganizations, reclassifications, recapitalizations,
consolidations, mergers, sales and transfers and to the stock or securities of
any other corporation that are at the time receivable upon the exercise of this
Warrant.

      

      6.1.4. Carryover.  Notwithstanding
any other provision of this Section 6.1, no adjustment shall be made to the
number of shares of Common Stock to be delivered to the Warrantholder (or to the
Exercise Price) if such adjustment represents less than 1% of the number of
shares to be so delivered, but any lesser adjustment shall be carried forward
and shall be made at the time and together with the next subsequent adjustment
which together with any adjustments so carried forward shall amount to 1% or
more of the number of shares to be so delivered.

       

      6.1.5. Exercise Price
Adjustment.  Whenever the number of Warrant Shares purchasable
upon the exercise of this Warrant is adjusted as provided in this Section 6, the
Exercise Price payable upon the exercise of this Warrant shall be adjusted by
multiplying such Exercise Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of the Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant Shares
purchasable immediately thereafter.

       

      6.1.6. Antidilution
Provisions.

       

      (a) Definitions. For
purposes of this Section 6.1.6 the following definitions shall
apply:

       

      "Common Stock
Equivalents" shall mean Convertible Securities and rights entitling the
holder thereof to receive directly, or indirectly, additional shares of Common
Stock without the payment of any consideration by such holder for such
additional shares of Common Stock or

      Common
Stock Equivalents.

      

      "Common Stock
Outstanding" shall mean the aggregate of all Common Stock outstanding and
all Common Stock issuable upon conversion of all outstanding Convertible
Securities and exercise of all options.

       

      "Convertible
Securities" means evidences of indebtedness, shares of stock or other
securities which are convertible into or exchangeable for, with or without
payment of additional consideration, shares of Common Stock, either immediately
or upon the arrival of a specified date or the happening of a specified event or
both.

       

      "Current Exercise
Price" shall mean the Exercise Price immediately before the occurrence of
any event, which, pursuant to Section 6.1.6, causes an adjustment to the
Exercise Price.

       

      "Fair Market Value"
means with respect to a share of Common Stock at any date:

       

      (i) If
shares of Common Stock are being sold pursuant to a public offering under an
effective registration statement under the 1933 Act which has been declared
effective by the Commission and Fair Market Value is being determined as of the
closing of the public offering, the "per share price to public" specified for
such shares in the final prospectus for such public offering;

       

      (ii) If
shares of Common Stock are then listed or admitted to trading on any national
securities exchange or traded on any national market system and Fair Market
Value is not being determined as of the date described in clause (i) of this
definition, the closing price for the trading day immediately preceding such
date;

       

      (iii) If
no shares of Common Stock are then listed or admitted to trading on any national
securities exchange or traded on any national market system or being offered to
the public pursuant to a registration described in clause (i) of this
definition, the average of the reported closing bid and asked prices thereof on
such date in the over-the-counter market as published
by Pink OTC Markets Inc. or any similar successor organization, and as reported
by any member firm of the New York Stock Exchange selected by the Company and
reasonably acceptable to the Warrantholder;

       

      (iv) If
no shares of Common Stock are then listed or admitted to trading on any national
exchange or traded on any national market system, if no closing bid and asked
prices thereof are then so quoted or published in the over-the-counter market
and if no such shares are being offered to the public pursuant to a registration
described in clause (i) of this definition, the fair value of a share of Common
Stock shall be as determined by an investment bank

      selected
by Company with the approval of the Warrantholder (which approval shall not be
unreasonably withheld or delayed), the costs of such investment bank to be paid
by the Company.

       

      (b) Adjustments to Exercise
Price. The Exercise Price in effect from time to time shall be subject to
adjustment in certain cases as follows:

       

      (i) In
case the Company shall at any time after the issue date of this Warrant issue or
sell any Common Stock or Common Stock Equivalent without consideration, or for a
consideration per share less than the then Fair Market Value, then, and
thereafter successively upon each such issuance or sale, the Current Exercise
Price shall simultaneously with such issuance or sale be adjusted to an Exercise
Price (calculated to the nearest cent) determined by multiplying the Current
Exercise Price in effect immediately prior to such issuance or sale by a
fraction, the numerator of which shall be the number of shares of Common Stock
Outstanding on such date of sale or issuance plus the number of shares of Common
Stock which the aggregate consideration received for the issuance or sale of
such additional shares would purchase at the Fair Market Value and the
denominator of which shall be the number of shares of Common Stock Outstanding
immediately after the issuance or sale.

      
        
          
          

        

        
          4

          
          

        

        
          
          

        

      

                     
For the purposes of this subsection, the following provisions shall also be
applicable:

       

      (A)           Cash Consideration.
In case of the issuance or sale of additional Common Stock or Common Stock
Equivalents for cash, the consideration received by the Company therefor shall
be deemed to be the amount of cash received by the Company for such shares (or,
if such shares are offered by the Company for subscription, the subscription
price, or, if such shares are sold to underwriters or dealers for public
offering without a subscription offering, the initial public offering price),
without deducting therefrom any compensation or discount paid or allowed to
underwriters or dealers or others performing similar services or for any
expenses incurred in connection therewith.

       

      (B)           Non-Cash
Consideration. In case of the issuance (otherwise than upon conversion or
exchange of Convertible Securities) or sale of additional Common Stock, options
or Convertible Securities for a consideration other than cash or a
consideration, a part of which shall be other than cash, the fair value of such
consideration as determined by the board of directors
of the Company in the good faith exercise of its business judgment, irrespective
of the accounting treatment thereof, shall be deemed to be the value, for
purposes of this section, of the consideration other than cash received by the
Company for such securities.

      
         

      

         
 (C)           Options and Convertible
Securities. In case the Company shall in any manner issue or grant any
options or any Convertible Securities, the total maximum number of shares of
Common Stock issuable upon the exercise of such options or upon conversion or
exchange of the total maximum amount of such Convertible Securities at the time
such Convertible Securities first become convertible or exchangeable shall (as
of the date of issue or grant of such options or, in the case of the issue or
sale of Convertible Securities other than where the same are issuable upon the
exercise of options, as of the date of such issue or sale) be deemed to be
issued and to be outstanding for the purpose of this section and to have been
issued for the sum of the amount (if any) paid for such options or Convertible
Securities and the minimum amount (if any) payable upon the exercise of such
options or upon conversion or exchange of such Convertible Securities at the
time such Convertible Securities first become convertible or exchangeable;
provided that, subject to the provisions of subsection (D) below, no adjustment
or further adjustment of the Exercise Price shall be made upon the actual
issuance of (a) any such Common Stock or Convertible Securities or upon the
conversion or exchange of any such Convertible Securities or the exercise of
such options or (b) any Common Stock issued or sold pursuant to conversion of
any Convertible Securities or exercise of any Options to the extent outstanding
on the date of issue of this Warrant.

       

      (D)           Change in Option Price or
Conversion Rate. If the exercise price provided for in any option
referred to in subsection (C) above, or the rate at which any Convertible
Securities referred to in subsection (C) are convertible into or exchangeable
for shares of Common Stock shall change at any time (other than under or by
reason of provisions designed to protect against dilution), the Current Exercise
Price in effect at the time of such event shall forthwith be readjusted to the
Exercise Price that would have been in effect at such time had such options or
Convertible Securities still outstanding provided for such changed exercise
price, additional consideration or conversion rate, as the case may be, at the
time initially granted, issued or sold. If the exercise price provided for in
any such option referred to in subsection (C), or the additional consideration
(if any) payable upon the conversion or exchange of any Convertible Securities
referred to in subsection (C), or the rate at which any Convertible Securities
referred to in subsection (C) are convertible into or exchangeable for shares of
Common Stock, shall be reduced at any time under or by reason of provisions with
respect thereto designed to protect against dilution and such reduction would
trigger an adjustment under this section, then in case of the delivery of shares
of Common Stock upon the exercise of any such option or upon conversion or
exchange of any such Convertible Security, the Current Exercise Price then in
effect hereunder shall, upon issuance of such shares of Common Stock, be
adjusted to such amount as would have obtained had such option or Convertible
Security never been issued and had adjustments been made only upon the issuance
of the shares of Common Stock actually delivered and for the consideration
actually received for such option or Convertible Security and the Common
Stock.

       

      (E)           Termination of Option or
Conversion Rights. In the event of the termination or expiration of any
right to purchase Common Stock under any option or of any right to convert or
exchange Convertible Securities, the Current Exercise Price shall, upon such
termination, be changed to the Exercise Price that would have been in effect at
the time of such expiration or termination had such Option or Convertible
Security, to the extent outstanding immediately prior to such expiration or
termination, never been issued, and the shares of Common Stock issuable
thereunder shall no longer be deemed to be Common Stock
Outstanding.

       

      (F)           Notwithstanding
anything to the contrary set forth above, no adjustment pursuant to this Section
6.1.6 shall be made for the issuance of Common Stock or Common Stock Equivalents
to employees, directors or consultants of the Company with the approval of, or
pursuant to a plan approved by, the Board of Directors of the Company; provided,
however, that for purposes of this Warrant, “consultant” shall mean individuals
who are natural persons and provide bona fide services to the Company or its
subsidiaries that are not in connection with the offer or sale of the Company’s
securities in a capital raising transaction and do not relate to the promotion
or maintenance of a market for the Company’s securities.

      

      6.2. Notice of
Adjustments.  Whenever the number of Warrant Shares or the
Exercise Price of such Warrant Shares is adjusted, as herein provided, the
Company shall promptly mail by first class, postage prepaid, to the
Warrantholder, notice of such adjustment or adjustments setting forth in
reasonable detail the number of Warrant Shares and the Exercise Price of such
Warrant Shares after such adjustment, a brief statement of the facts requiring
such adjustment, and the computation by which such adjustment was
made.

       

      6.3. Extraordinary Corporate
Events. If the Company, after the date hereof, proposes to effect (i) any
transaction described in Sections 6.1.1, 6.1.2 or 6.1.3 hereof, or (ii) a
liquidation, dissolution or winding up of the Company or (iii) any payment of a
dividend or distribution with respect to the Common Stock (other than a cash
dividend or distribution), then, in each such case, the Company shall mail to
the Warrantholder a notice describing such proposed action and specifying the
date on which the Company's books shall close, or a record shall be taken, for
determining the holders of Common Stock entitled to participate in such action,
or the date on which such reorganization, reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution or winding up shall take place
or commence, as the case may be, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to receive securities and/or
other property deliverable upon such action, if any such date is to be fixed.
Such notice shall be mailed to the Warrantholder at least ten days prior to the
record date for any such action. The failure to give notice required by this
Section 6.3 or any defect therein shall be a breach of this Warrant but shall
not affect the legality or validity of the action taken by the Company or the
vote upon any such action. Unless specifically required by this Section 6, the
Exercise Price, the number of shares covered by each Warrant and the number of
Warrants outstanding shall not be subject to adjustment as a result of the
Company being required to give notice pursuant to this Section 6.3.

       

      6.4. No Impairment. The
Company shall not, by amendment of the Charter or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution,
issuance or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company, but shall at all times in good faith assist
in the carrying out of all the provisions of this Section 6 and in the taking of
all such action as may be necessary or appropriate in order to protect the
rights of the Warrantholder against impairment.

       

      7. Fractional
Shares.  No fractional shares of Common Stock or scrip shall be
issued to the Warrantholder in connection with the exercise or conversion of
this Warrant.  Instead of any fractional shares of Common Stock that
would otherwise be issuable to the Warrantholder, the Company will pay to the
Warrantholder a cash adjustment in respect of such fractional interest in an
amount equal to the product of such fractional interest and the Exercise Price
paid by the Warrantholder for its Warrant Shares upon such
exercise.

      
        
          
          

        

        
          5

          
          

        

        
          
          

        

      

       

      8. Piggyback Registration
Rights.

       

      8.1. Registration
Statements.  If at any time the Company proposes to register
for its own account any of its Common Stock under the 1933 Act by registration
on any form other than Form S-4 or S-8 (even if other stockholders will
participate in such registration), it shall each such time give written notice
to the Warrantholder of its intention to do so at least 10 Business Days prior
to the initial filing of a registration statement or statements or similar
documents (the “Registration
Statement”) for such registration.  Upon the written request of
the Warrantholder, made within 5 Business Days after the receipt of any such
notice (which request shall specify the Warrant Shares intended to be disposed
of by the Warrantholder and the intended method of disposition), the Company
shall use its reasonable best efforts to effect the registration under the 1933
Act of all the Warrant Shares that the Company has been so requested to register
by the Warrantholder to the extent required to permit the disposition of such
Warrant Shares in accordance with the intended methods of disposition thereof
described as aforesaid; provided, however, that, in the
case of an underwritten offering, prior to the effective date of the
registration statement filed in connection with such registration, immediately
upon notification to the Company from the managing underwriter of the price at
which such securities are to be sold, if such price is below the price which the
Warrantholder shall have indicated to be acceptable to the Warrantholder, the
Company shall so advise the Warrantholder of such price, and the Warrantholder
shall then have the right to withdraw its request to have its Warrant Shares
included in such registration statement; provided further,
that if, at any time after giving written notice of its intention to register
any securities and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for any
reason not to register or to delay registration of such securities, the Company
may, at its election, give written notice of such determination to the
Warrantholder and the Company shall be relieved of its obligation to register
any Warrant Shares in connection with such registration (but not from any
obligation of the Company to pay the registration expenses in connection
therewith).  The obligations of the Company to effect a registration
pursuant to this Section 8.1 shall continue until all of the Warrant Shares have
been sold by the holder or could immediately be sold pursuant to Rule 144
without the holder being deemed an underwriter of such securities within the
meaning of Section 2(a)(11) of the 1933 Act.

      
         

      

      8.2. Underwriter
Holdback.  If the managing underwriter of any underwritten
offering under this Section 8 shall inform the
Company by letter that, in its opinion, the number of Warrant Shares requested
to be included in such registration would adversely affect such offering, and
the Company has so advised the Warrantholder in writing, then the Company will
include in such registration, to the extent of the number that the Company is so
advised can be sold in (or during the time of) such offering, first, all securities
proposed by the Company to be sold for its own account, second, any holders
with contractual rights senior to the Warrantholder, third, the Warrant
Shares requested to be included in such registration pursuant to this Warrant
and, fourth,
all other securities proposed to be registered.

       

      8.3. Obligations of the
Company.  In connection with the registration of the Warrant
Shares as contemplated by this Section 8 the Company
shall:

       

      8.3.1. Following
receipt of a written request from the Warrantholder under Section 8.1 to register Warrant Shares with the Commission,
prepare and file a Registration Statement with respect to the securities to be
sold by the Company together with the Warrant Shares to be sold by the
Warrantholder, and thereafter use its reasonable commercial efforts to cause the
Registration Statement to become effective as soon as practicable, which
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein), in each case, shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading:

       

      8.3.2. Prepare
and file with the Commission such amendments (including post-effective
amendments) and supplements to the Registration Statement and the prospectus
used in connection with the Registration Statement as may be necessary to keep
the Registration Statement effective and to comply with the provisions of the
1933 Act with respect to the disposition of all Warrant Shares covered by the
Registration Statement until the earlier to occur of (i) such time as all of
such Warrant Shares have been disposed of in accordance with the intended
methods of disposition by the Warrantholder as set forth in the Registration
Statement and (ii) the expiration of one year from the date the registration
statement is declared effective by the Commission;

       

      8.3.3. Furnish
to the Warrantholder (without charge to the Warrantholder) such number of copies
of a prospectus, including a preliminary prospectus and all amendments and
supplements thereto and such other documents, as the Warrantholder may
reasonably request in order to facilitate the disposition of the Warrant Shares;
the Company consents to the use of the prospectus and any amendment or
supplement thereto by the Warrantholder in connection with the offering and the
sale of the Warrant Shares covered by the prospectus or any amendment or
supplement thereto;

       

      8.3.4. Use its
reasonable commercial efforts to (a) register and qualify the Warrant Shares
covered by the Registration Statement under such securities or Blue Sky laws of
such jurisdictions as the Warrantholder reasonably requests, (b) prepare and
file in those jurisdictions all required amendments (including post-effective
amendments) and supplements, (c) take such other reasonable actions as may be
necessary to maintain such registrations and qualifications in effect at all
times the Registration Statement is in effect and (d) take all other reasonable
actions necessary or advisable to enable the disposition of such securities in
all such jurisdictions; provided, however, that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 8.3.4.

       

      8.3.5. In the
event of an underwritten offering, enter into and perform its obligations under
an underwriting agreement with the managing underwriter of such offering, in
usual and customary form, including, without limitation, customary
indemnification and contribution obligations, and in the case of any
non-underwritten offering, provide to broker-dealers participating in any
distribution of Warrant Shares reasonable indemnification.

       

      8.3.6. Promptly
(and in any event within two Business Days) notify the Warrantholder of the
happening of any event of which the Company has knowledge, as a result of which
the prospectus included in the 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,
in light of the circumstances then existing, not misleading, and use its
reasonable commercial efforts to prepare promptly a supplement or amendment to
the Registration Statement to correct such untrue statement or omission, and
deliver a number of copies of such supplement or amendment to the Warrantholder
as such Warrantholder may reasonably request;

       

      8.3.7. Promptly
(and in any event within two Business Days) notify the Warrantholder (and, in
the event of an underwritten offering, the managing underwriters) of the
issuance by the Commission of any stop order or other suspension of
effectiveness of the Registration Statement, and use its reasonable commercial
efforts to obtain the withdrawal of any order suspending the effectiveness of
the Registration Statement;

       

      8.3.8. Make
available for inspection by the Warrantholder, any underwriter participating in
any disposition pursuant to the Registration Statement, and any attorney,
accountant, or other agent retained by the Warrantholder or underwriter
(collectively, the “Inspectors”), all
pertinent financial and other records, pertinent corporate documents and
properties of the Company, as shall be reasonably necessary to enable each
Inspector to exercise its due diligence responsibility, and cause the Company’s
officers, directors and employees to supply all information reasonably requested
by any such Inspector in connection with the Registration
Statement;

       

      8.3.9. Use its
reasonable commercial efforts either to (a) cause all the Warrant Shares covered
by the Registration Statement to be listed on a national securities exchange and
on each additional national securities exchange on which similar securities
issued by the Company are then listed, if any, if the listing of such Warrant
Shares is then permitted under the rules of such exchange or, (b) if similar
securities issued by the Company are not then listed on a national securities
exchange, cause all the Warrant Shares covered by the Registration Statement to
be listed or included for trading on the exchange or quotation system on which
similar securities issued by the Company are then listed or traded;

      
        
          
          

        

        
          6

        

        
          
          

        

      

       

      8.3.10. Promptly
(and in any event within two Business Days) notify the Warrantholder when the
prospectus or any prospectus supplement or post-effective amendment has been
filed, and with respect to the Registration Statement or any post-effective
amendment thereto, when the same has become effective; and

       

      8.3.11. Use its
best efforts to comply with all applicable rules and regulations of the
Commission, and make available to its securityholders, to the extent required,
as soon as reasonably practicable, an earnings statement covering the period of
at least twelve months, but not more than eighteen months, beginning with the
first month after the effective date of the Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the 1933
Act.

      
         

      

      8.4. Obligations of the
Warrantholder.  It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Warrant that the
Warrantholder shall comply with its obligations under this Warrant, including
this Section 8.4.

       

      8.4.1. The
Warrantholder shall furnish to the Company such information regarding itself,
the Warrant Shares and the intended method of disposition of the Warrant Shares
as shall be reasonably required to effect the registration of the Warrant Shares
and shall execute such documents and agreements in connection with such
registration as the Company may reasonably request, all in a timely manner so as
to enable the Company to comply with its obligations
hereunder.  Concurrent with the notice delivered pursuant to Section
8.1 above, the Company shall notify the Warrantholder of the information the
Company requires from the Warrantholder (the “Requested
Information”) if the Warrantholder elects to have any of its Warrant
Shares included in the Registration Statement.  If within 5 Business
Days of the notice delivered by the Company pursuant to Section 8.1 above, the
Company has not received the Requested Information from the Warrantholder and
the Company has properly notified the Warrantholder in accordance with the
preceding sentence, then the Company may file the Registration Statement without
including Warrant Shares.

       

      8.4.2. The
Warrantholder, by its acceptance of the Warrant Shares, agrees to cooperate with
any reasonable request made by the Company in connection with the preparation
and filing of any registration statement hereunder which includes the Warrant
Shares.

       

      8.4.3. In the
event of an underwritten offering, the Warrantholder agrees to enter into and
perform its obligations under any underwriting agreement, in usual and customary
form, including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering and take such other
actions as are reasonable required in order to expedite or facilitate the
disposition of the Warrant Shares.

       

      8.4.4. The
Warrantholder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 8.3.6, the Warrantholder will immediately discontinue
disposition of Warrant Shares pursuant to the Registration Statement covering
such Warrant Shares until the Warrantholder’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 8.3.6 and, if so directed by the Company, the
Warrantholder shall deliver to the Company (at the expense of the Company) or
destroy (and deliver to the Company a certificate of such destruction ) all
copies, other than permanent file copies then in the Warrantholder’s possession,
of the prospectus covering Warrant Shares at the time of receipt of such notice;
and

       

      8.4.5. The
Warrantholder may not participate in any underwritten registration hereunder
unless the Warrantholder (a) agrees to sell such Warrant Shares on the basis
provided in any underwriting arrangements, (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and (c) agrees to pay the Warrantholder’s pro rata portion of all
underwriting discounts and commissions.

       

      8.5. Expenses of
Registration.  All expenses (other than underwriting discounts
and commissions and fees and disbursements of any counsel retained by the
Warrantholder) incurred in connection with registration, filings or
qualifications pursuant to Section 8 including,
without limitation, all registration, listing, filing and qualification fees,
printers and accounting fees, and the fees and disbursements of counsel for the
Company shall be borne by the Company.

       

      8.6. Indemnification.  In
the event any Warrant Shares are included in a Registration Statement under this
Agreement:

       

      8.6.1. To the
extent permitted by law, the Company shall indemnify and hold harmless the
Warrantholder, each person, if any, who controls the Warrantholder, any
underwriter (as defined in the 1933 Act) for the Warrantholder, and each person,
if any, who controls any such underwriter within the meaning of the 1933 Act or
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (each,
an “Indemnified
Holder”), against any losses, claims, damages, expenses, liabilities
(joint or several) (collectively, “Claims”) to which any
of them may become subject under the 1933 Act, the Exchange Act or otherwise,
insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any of the
following statements, omissions of violations (collectively a “Violation”): (a) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or any post-effective amendment thereof, or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, (b) untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the pricing prospectus, the final prospectus or any
“issuer free writing prospectus” or any “issuer information” within the meaning
of Rule 433 promulgated under the 1933 Act (as amended or supplemented if the
Company files any amendment thereof or supplement thereto with the Commission),
or the omission or alleged omission to state therein a material fact required to
be stated therein, or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, or (c)
any violation or alleged violation by the Company of the 1933 Act, the Exchange
Act, any state securities law, or any rule or regulation promulgated under the
1933 Act, the Exchange Act, or any state securities law.  Subject to
the restrictions set forth in Section 8.6.3, with
respect to the number of legal counsel, the Company shall reimburse
Warrantholder and each such underwriter or controlling person, promptly as such
expenses are incurred and are due and payable, for any legal fees or other
reasonable expenses incurred by them in connection with investigating or
defending any such Claim, whether or not such claim, investigation or proceeding
is brought or initiated by the Company or a third
party.  Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 8.6(x) shall not apply to a Claim arising out of or
based upon a Violation which occurs solely in reliance upon and in conformity
with information furnished in writing to the Company by any Indemnified Holder
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto; and (y) shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld.

      
        7

        
        

      

      8.6.2. In
connection with any Registration Statement in which the Warrantholder is
participating, the Warrantholder agrees to indemnify and hold harmless, to the
same extent and in the same manner set forth in Section 8.6.1, the Company, each of its directors, each of its
officers who sign the Registration Statement, each person, if any, who controls
the Company within the meaning of the 1933 Act or the Exchange Act, any
underwriter and any other stockholder selling securities pursuant to the
Registration Statement or any of its directors or officers or any person who
controls such stockholder or underwriter (collectively and together with an
Indemnified Holder, an “Indemnified Party”),
against any Claim to which any of them may become subject, under the 1933 Act,
the Exchange Act or otherwise, insofar as such Claim arises out of or is based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation occurs solely in reliance upon and in conformity with written
information furnished to the Company by the Warrantholder expressly for use in
connection with such Registration Statement; and the Warrantholder will
reimburse any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 8.6.2
shall not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of such Warrantholder, which consent
shall not be unreasonably withheld.

       

      8.6.3. Promptly
after receipt by an Indemnified Party under Section 8.6 of notice of the commencement of any action
(including any governmental action), such Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under Section 8.6, deliver to the indemnifying party a written notice
of the commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel satisfactory to the Indemnified Parties; provided, however, that an
Indemnified Party shall have the right to retain its own counsel, with the fees
and expenses to be paid by the indemnifying party, if, in the reasonable opinion
of counsel for the Indemnified Party, representation of such Indemnified Party
by the counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Party and any
other party represented by such counsel in such proceeding.  The
Company shall pay for only one legal counsel for the
Warrantholder.  The failure by an Indemnified Party to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to
the Indemnified Party under Section 8.6, except to
the extent that such failure to notify results in the forfeiture by the
indemnifying party or substantive rights or defenses.  The
indemnification required by Section 8.6 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.

       

      8.7. Contribution.  To
the extent any indemnification by an indemnifying party is prohibited or limited
by law, the indemnifying party agrees to make the maximum contribution with
respect to any amounts for which it would otherwise be liable under Section 8.6 to the fullest extent permitted by
law.

      
         

      

      8.8. Transfer Of Registration
Rights. The right to sell Warrant Shares pursuant to the Registration
Statement described herein will automatically be assigned to each transferee of
the Warrant or Warrant Shares permitted under the terms of this Warrant. In the
event that it is necessary, in order to permit a Warrantholder to sell Warrant
Shares pursuant to the Registration Statement, to supplement or amend the
Registration Statement to name such Warrantholder, such Warrantholder shall upon
written notice to the Company, be entitled to have the Company make such
amendment or supplement as soon as reasonably practicable.

       

      9. Miscellaneous.

       

      9.1. Entire
Agreement.  This Warrant constitutes the entire agreement
between the Company and the Warrantholder with respect to the subject matter
hereof.

       

      9.2. Binding Effects;
Benefits.  This Warrant shall inure to the benefit of and shall
be binding upon the Company and the Warrantholder and their respective heirs,
legal representatives, successors and assigns.  Nothing in this
Warrant, expressed or implied, is intended to or shall confer on any person
other than the Company and the Warrantholder, or their respective heirs, legal
representatives, successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Warrant.  Except as otherwise
set forth herein, this Warrant may not be assigned, sold, pledged, transferred
or otherwise disposed of by the Warrantholder without the prior written consent
of the Company.

       

      9.3. Section and Other
Headings.  The section and other headings contained in this
Warrant are for reference purposes only and shall not be deemed to be a part of
this Warrant or to affect the meaning of interpretation of this
Warrant.

       

      9.4. Pronouns.  All
pronouns and any variations thereof refer to the masculine, feminine or neuter,
singular or plural, as the context may require.

       

      9.5. Further
Assurances.  Each of the Company and the Warrantholder shall do
and perform all such further acts and things and execute and deliver all such
other certificates, instruments and documents as the Company or the
Warrantholder may, at any time and from time to time, reasonably request in
connection with the performance of any of the provisions of this
Warrant.

      
        
          
          

        

        
          8

          
          

        

        
          
          

        

      

       

      9.6. Notices.  All
notices and other communications required or permitted to be given under this
Warrant shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by United States mail or overnight courier, postage
prepaid, to the parties hereto at the following addresses or to such other
address as any party hereto shall hereafter specify by notice to the other party
hereto:

       

      (a)           if
to the Company, addressed to:

      

      WMS
Industries Inc.

      800 S.
Northpoint Blvd.

      Waukegan,
IL 60085

      Attention:
Executive Vice President and Chief Financial Officer

      

      

      With a
copy to:

      

      WMS
Industries Inc.

      800 S.
Northpoint Blvd.

      Waukegan,
IL  60085

      Attention:  Vice
President, General Counsel and Secretary

      

      

      (b)           if
to the Warrantholder, addressed to:

      

      Hasbro,
Inc.

      1011
Newport Avenue

      Pawtucket,
RI 02862

      Attn:  General
Counsel

      

      With a
copy to:

      

      Hasbro,
Inc.

      1011
Newport Avenue

      Pawtucket,
RI 02862

      Attn:  President,
Hasbro Properties Group

      

      Except as
otherwise provided herein, all such notices and communications shall be deemed
to have been received on the date of delivery thereof, if delivered personally,
on the next Business Day if sent by overnight courier, or on the third Business
Day after the mailing thereof if sent by U.S. mail.

      

      9.7. Separability.  Any
term or provision of this Warrant which is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the terms and provisions of this Warrant or affecting the validity or
enforceability of any of the terms or provisions of this Warrant in any other
jurisdiction.

       

      9.8. Governing
Law.  This Warrant shall be deemed to be a contract made under
the laws of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to such agreements made and to
be performed entirely within such State.

       

      9.9. No Rights or Liabilities as
Stockholder.  Nothing contained in this Warrant shall be
determined as conferring upon the Warrantholder any rights as a stockholder of
the Company or as imposing any liabilities on the Warrantholder to purchase any
securities whether such liabilities are asserted by the Company or by creditors
or stockholders of the Company or otherwise.

       

      
         

      

      IN
WITNESS WHEREOF, each of the Company and Hasbro has caused this Warrant to be
signed by its duly authorized officer.

       

      WMS
INDUSTRIES INC.

      

      

      By: /s/ Orrin J.
Ediden

      Name: Orrin J. Edidin

      Title:
President

      

      
        	
                 
      

              	
                HASBRO,
      INC.

              

      

      

      
        	
                 
      

              	
                By:
      /s/ Brian Goldner

              

      

      Name:
Brian Goldner

      Title:
President and CEO

      Dated:                      June
11, 2009

      

      
        
          
          

        

        
          9

          
          

        

        
          
          

        

      

      Exhibit
A

       

      EXERCISE AND CONVERSION
FORM

      

      

      (To be
executed upon exercise or conversion of this Warrant)

      Exercise.  The
undersigned hereby irrevocably elects to exercise its right to purchase _________________ of
the Warrant Shares pursuant to Section 1.2 of the Warrant and herewith tenders
payment for such Warrant Shares to the order of WMS Industries Inc. in the
amount of $________________.

       

      Conversion.  The
undersigned hereby irrevocably elects to exercise its Conversion Right with
respect to _______________
Warrant Shares pursuant to Section 1.3 of the Warrant.

       

      The
undersigned requests that a certificate for the Warrant Shares deliverable to
the undersigned upon exercise or conversion, as applicable, be registered in the
name of __________ and that
such certificates be delivered to _________________
whose address is _______________.

      

      Dated:
__________________________

      

      

      Signature                      ______________________________

      

      ______________________________

      (Print Name)

      

      ______________________________

      (Street Address)

      

      ______________________________

      (City)                 (State)                      (Zip
Code)

      

      

      Signed in
the Presence of:

      

      

      ________________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00159-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00159-of-00352.parquet"}]]