Document:

Exhibit

Exhibit 10.2
SECOND AMENDMENT TO TERM LOAN AGREEMENT AND OTHER LOAN DOCUMENTS

THIS SECOND AMENDMENT TO TERM LOAN AGREEMENT AND OTHER LOAN DOCUMENTS (this “Amendment”) made as of the 8th day of April, 2016, by and among DUPONT FABROS TECHNOLOGY, L.P., a Maryland limited partnership (“Borrower”), DUPONT FABROS TECHNOLOGY, INC., a Maryland corporation (“REIT”), the parties executing below as Subsidiary Guarantors (the “Subsidiary Guarantors”; REIT and the Subsidiary Guarantors, collectively, the “Guarantors”), ROYAL BANK OF CANADA, (“RBC”), THE OTHER LENDERS WHICH ARE SIGNATORIES HERETO (RBC and the other lenders which are signatories hereto, collectively, the “Lenders”), and ROYAL BANK OF CANADA, as Agent for the Lenders (the “Agent”).
W I T N E S S E T H:
WHEREAS, Borrower, the Agent and certain of the Lenders entered into that certain Term Loan Agreement dated as of September 13, 2013, and that certain First Amendment to Term Loan Agreement and Other Loan Documents dated as of July 21, 2014 (as so amended, the “Loan Agreement”); and
WHEREAS, Borrower has requested that the Agent and the Lenders make certain modifications to the terms of the Loan Agreement; and
WHEREAS, the Agent and the Lenders have agreed to make such modifications subject to the execution and delivery by Borrower and Guarantors of this Amendment.
NOW, THEREFORE, for and in consideration of the sum of TEN and NO/100 DOLLARS ($10.00), and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby covenant and agree as follows:
1.Definitions.  All the terms used herein which are not otherwise defined herein shall have the meanings set forth in the Loan Agreement.
2.Modifications of the Loan Agreement.  Borrower, the Lenders and the Agent do hereby modify and amend the Loan Agreement as follows:
(a)By deleting in their entirety the definitions of “Environmental Laws”, “Hazardous Substances”, “International Investments” and “Off-Balance Sheet Obligations” appearing in §1.1 of the Loan Agreement, and inserting in lieu thereof the following:
“Environmental Laws.  Any federal, state, provincial or local statute, regulation or ordinance or any judicial or administrative decree or decision, whether now existing or hereinafter enacted, promulgated or issued, with respect to any Hazardous Substances, Mold, drinking water, groundwater, wetlands, landfills, open dumps, storage tanks, underground storage tanks, solid waste, waste water, storm water run-off, waste emissions or wells.  Without limiting the generality of the foregoing, the term shall encompass each of the following statutes and their state and local equivalents, and regulations promulgated thereunder, and amendments and successors to such statutes and regulations, as may be enacted and promulgated from time to time:  (i) CERCLA (codified in scattered sections of 26 U.S.C.; 33 U.S.C.; 42 U.S.C. and 42 U.S.C. §9601 et seq.); (ii) the Resource Conservation and Recovery Act of 1976 (42 U.S.C. 

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§6901 et seq.); (iii) the Hazardous Materials Transportation Act (49 U.S.C. §1801 et seq.); (iv) the Toxic Substances Control Act (15 U.S.C. §2061 et seq.); (v) the Clean Water Act (33 U.S.C. §1251 et seq.); (vi) the Clean Air Act (42 U.S.C. §7401 et seq.); (vii) the Safe Drinking Water Act (21 U.S.C. §349; 42 U.S.C. §201 and §300f et seq.); (viii) the National Environmental Policy Act of 1969 (42 U.S.C. §4321); (ix) the Superfund Amendment and Reauthorization Act of 1986 (codified in scattered sections of 10 U.S.C., 29 U.S.C., 33 U.S.C. and 42 U.S.C.); (x) Title III of the Superfund Amendment and Reauthorization Act (40 U.S.C. §1101 et seq.); (xi) Environmental Protection Act, RSO 1990, c E.19, as amended and any regulations enacted pursuant to it; (xii) Ontario Water Resources Act, RSO 1990, c O.40, as amended and any regulations enacted pursuant to it; (xiii) Clean Water Act, 2006, SO 2006, c 22, as amended and any regulations enacted pursuant to it; (xiv) Safe Drinking Water Act, 2002, SO 2002, c 32, as amended and any regulations enacted pursuant to it; (xv) Canadian Environmental Protection Act, 1999, SC 1999, c 33, as amended and any regulations enacted pursuant to it; (xvi) Fisheries Act, RSC 1985, c F-14, as amended and any regulations enacted pursuant to it; and (xvii) Transportation of Dangerous Goods Act, 1992, SC 1992, c 34, as amended and any regulations enacted pursuant to it.
Hazardous Substances.  Each and every element, compound, chemical mixture, contaminant, pollutant, toxic substances, oil, material, waste or other substance which is defined, determined or identified as hazardous or toxic under any Environmental Law.  Without limiting the generality of the foregoing, the term shall mean and include:
		
	(i)
	“hazardous substances” as defined in CERCLA, the Superfund Amendment and Reauthorization Act of 1986, or Title III of the Superfund Amendment and Reauthorization Act, each as amended, and regulations promulgated thereunder;

		
	(ii)
	“hazardous waste” and “regulated substances” and “subject waste” as defined in the Resource Conservation and Recovery Act of 1976, as amended, and regulations promulgated thereunder, or the Environmental Protection Act, RSO 1990, c E.19, as amended and any regulations enacted pursuant to it;

		
	(iii)
	“hazardous materials” or “dangerous goods” as defined in the Hazardous Materials Transportation Act, as amended, and regulations promulgated thereunder or the Transportation of Dangerous Goods Act, 1992, SC 1992, c 34, as amended and any regulations enacted pursuant to it; 

		
	(iv)
	“chemical substance or mixture” as defined in the Toxic Substances Control Act, as amended, and regulations promulgated thereunder; and

		
	(v)
	“contaminant” as defined in the Environmental Protection Act, RSO 1990, c E.19, as amended and any regulations enacted pursuant to it.

International Investments.  Investments in fee or leasehold interests in Data Center Properties located in Canada, Western Europe or Asia.  Such Data Center Properties must be located in sizeable cities in countries with well developed real estate debt and equity capital markets, as reasonably determined by the Agent.
Off-Balance Sheet Obligations. Liabilities and obligations of Borrower, any of its Subsidiaries or any other Person in respect of “off-balance sheet arrangements” (as defined in Item 303

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(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1933, as amended) which REIT would be required to disclose in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of REIT’s report on Form 10-Q or Form 10-K (or their equivalents) which REIT is required to file with the SEC or would be required to file if it were subject to the jurisdiction of the SEC (or any Governmental Authority substituted therefore).”; and
(b)By deleting in its entirety subparagraph (b) in the definition of “Change of Control”, appearing in §1.1 of the Loan Agreement, and inserting in lieu thereof the following:
“(b)    As of any date a majority of the Board of Directors or Trustees or similar body (the “Board”) of REIT or Borrower consists of individuals who were not either (i) directors or trustees of REIT or Borrower as of the corresponding date of the previous year, or (ii) approved to become directors or trustees by the Board of REIT or Borrower of which a majority consisted of individuals described in clause (b)(i) above, or (iii) approved to become directors or trustees by the Board of REIT or Borrower, which majority consisted of individuals described in clause (b)(i) above and individuals described in clause (b)(ii), above; or”; and
(c)By deleting the word “or” appearing before clause (d)(iii) of the definition of “Defaulting Lender” appearing in §1.1 of the Loan Agreement, and inserting the following new clause (d)(iv) into the definition of “Defaulting Lender” immediately after the word “appointment” appearing at the end of such clause (d)(iii):
“, or (iv) become the subject of a Bail-In Action”; and
(d)By deleting in its entirety clause (b) of the definition of “Eligible Real Estate” appearing in §1.1 of the Loan Agreement, and by inserting in lieu thereof the following:
“(b)    which is located within Canada or the 50 States of the continental United States or the District of Columbia.”; and
(e)By deleting in its entirety the last sentence of the definition of “Unencumbered Asset Value” appearing in §1.1 of the Loan Agreement, and by inserting in lieu thereof the following:
“International Investments (other than those located in Canada), Mortgage Notes and Investments in non‐Wholly Owned Subsidiaries and Unconsolidated Affiliates shall not be included in the calculation of Unencumbered Asset Value.”; and
(f)By inserting the following definitions in §1.1 of the Loan Agreement, in the appropriate alphabetical order:
“Bail-In Action.  The exercise of any Write-Down and Conversion Powers     by the applicable EEA Resolution Authority in respect of any liability of an EEA     Financial Institution.
Bail-In Legislation.  With respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.
Canadian Bankruptcy Legislation.  Bankruptcy and Insolvency Act (Canada), the Companies’ 

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Creditors Arrangement Act (Canada) or the Winding-Up and Restructuring Act (Canada) and corporate statutes to the extent used to compromise any debts and in each case all regulations thereunder, in each case as amended or replaced from time to time.
Canadian Benefit Plans.  All employee benefit plans of any nature or kind whatsoever that are not Canadian Pension Plans and are sponsored, administered, established, maintained or contributed to by REIT, the Borrower or any of their respective Subsidiaries having employees or former employees (but excluding trustees of REIT) in Canada.
Canadian Pension Plan.  Each plan which is a registered pension plan for the purposes of the Income Tax Act (Canada) sponsored, administered, established, maintained or contributed to by REIT, the Borrower or any of their respective Subsidiaries having employees or former employees in Canada.
Designated Person.   See §6.31.
EEA Financial Institution.  (a) Any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
EEA Member Country.  Any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
EEA Resolution Authority.  Any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
EU Bail-In Legislation Schedule. The EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
Insolvency Laws.  The Bankruptcy Code, the Canadian Bankruptcy Legislation and all other applicable liquidation, conservatorship, bankruptcy, moratorium, arrangement, rearrangement, receivership, insolvency, reorganization, readjustment of debt, dissolution, suspension of payments, or similar debtor relief laws affecting the rights of creditors generally of any jurisdiction, whether now or hereafter in effect.
PPSA.  The Personal Property Security Act or any similar law in effect from time to time in any province of Canada.
Sanctions Laws and Regulations. Any sanctions, prohibitions or requirements imposed, administered or enforced by, the U.S. government, including those administered by OFAC or the U.S. Department of State, or by the United Nations Security Council, the European Union or Her Majesty's Treasury of the United Kingdom.
Write-Down and Conversion Powers.  With respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.”; and

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(g)By inserting the following sentence to the end of §5.2(a) of the Loan Agreement:
“Each Subsidiary of Borrower that owns Real Estate included as an Unencumbered Property (and each other Subsidiary of Borrower having an interest in such Subsidiary of Borrower) shall be organized under the laws of a State and shall have its principal place of business in a State, consistent with the requirements of §7.2.”; and
(h)By deleting the words “original Guaranty” in the two (2) places where it appears in §5.2(c) of the Loan Agreement, and inserting in lieu thereof the words “Guaranty as then in effect (or if the Guaranty is not in effect, then as last in effect, with such modifications thereto as may be reasonably required by the Agent to describe the obligations to be guaranteed)”; and
(i)By deleting the words “federal and state” appearing in the second (2nd) line of §6.10 of the Loan Agreement, and inserting in lieu thereof the words “federal, state and provincial”; and
(j)By deleting in its entirety §6.13 of the Loan Agreement, and inserting in lieu thereof the following:  
“§6.13    Absence of Financing Statements, Etc.  Except with respect to Permitted Liens (including any UCC pre-filings or PPSA registrations in respect of Permitted Liens prior to the incurrence of such Permitted Lien, provided that if the Indebtedness to which such pre-filing relates is not promptly closed following such pre-filing, such pre-filed UCC or PPSA financing statement shall be promptly released), there is no effective financing statement (but excluding any financing statements that may be filed against Borrower, the Guarantors or their respective Subsidiaries without the consent or agreement of such Persons), security agreement, chattel mortgage, real estate mortgage or other document filed or recorded with any applicable filing records, registry, or other public office, that purports to cover, affect or give notice of any present or possible future lien on, or security interest or security title in, any property of Borrower, the Guarantors or their respective Subsidiaries or rights thereunder.”; and
(k)By inserting the following sentence to the end of §6.16 of the Loan Agreement:
“There are no current and never have been any Canadian Pension Plans or Canadian Benefit Plans.”; and
(l)By inserting the words “, provincial” following the words “state,” where they appear in the two (2) places where it appears in §6.20(b) of the Loan Agreement; and
(m)By deleting in its entirety §6.23 of the Loan Agreement, and inserting in lieu thereof the following:
“§6.23    Property.  All Real Estate of the Borrower, the Guarantors and their respective Subsidiaries is structurally sound, in good condition and working order, subject to ordinary wear and tear and casualty events, except for such portion of such Real Estate which is not occupied by any tenant and where such defects have not had and could not reasonably be expected to have a Material Adverse Effect.  Each of the Unencumbered Properties included in the calculation of Unencumbered Asset Value, and the use and operation thereof, is in material compliance with all applicable federal, state and provincial law and governmental regulations and any local or municipal ordinances, orders or regulations, including without limitation, laws, regulations and ordinances relating to zoning, building codes, subdivision, 

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fire protection, health, safety, handicapped access, historic preservation and protection, wetlands and tidelands.  There are no unpaid or outstanding real estate or other taxes or assessments on or against any of the Unencumbered Properties included in the calculation of Unencumbered Asset Value which are payable by Borrower or any Guarantor (except only real estate or other taxes or assessments, that are not yet delinquent or are being protested as permitted by this Agreement).  There are no unpaid or outstanding real estate or other taxes or assessments on or against any other property of the Borrower, the Guarantors or any of their respective Subsidiaries which are payable by any of such Persons in any material amount (except only real estate or other taxes or assessments, that are not yet delinquent or are being protested as permitted by this Agreement).  There are no pending, or to the knowledge of Borrower threatened or contemplated, eminent domain or expropriation proceedings against any of the Unencumbered Properties included in the calculation of Unencumbered Asset Value.  There are no pending, to the knowledge of the Borrower threatened or contemplated, Aboriginal right or Aboriginal title claims with respect to any of the Unencumbered Properties included in the calculation of Unencumbered Asset Value.  None of the Unencumbered Properties included in the calculation of Unencumbered Asset Value is, except as disclosed to the Agent in writing in accordance with §7.22(b), now damaged as a result of any fire, explosion, accident, flood or other casualty, and none of the other properties of Borrower, Guarantors or their respective subsidiaries is now damaged as a result of any fire, explosion, accident, floor or other casualty in any manner which individually or in the aggregate would have any Material Adverse Effect.  No person or entity has any right or option to acquire any Unencumbered Property included in the calculation of Unencumbered Asset Value or any building thereon or any portion thereof or interest therein, except for certain tenants pursuant to the terms of their leases with Subsidiary Guarantors.”; and
(n)By deleting in its entirety §6.27 of the Loan Agreement, and inserting in lieu thereof the following:
“§6.27    No Bankruptcy Filing.  Neither Borrower nor any Guarantor is contemplating either the filing of a petition by it under any state, provincial, federal or foreign bankruptcy or Insolvency Laws (including corporate laws to the extent used to compromise debts) or the liquidation of its assets or property, and neither Borrower nor any Guarantor has any knowledge of any Person contemplating the filing of any such proceeding or petition against it.”; and
(o)By deleting in its entirety §6.31 of the Loan Agreement, and inserting in lieu thereof the following:
“§6.31 OFAC.  None of the Borrower nor any Guarantor (i) is, or will take any action that would reasonably be expected to cause it to be, a Person included on the Specially Designated and Blocked Persons list maintained by OFAC or similar restricted party list maintained by the U.S. Government pursuant to Sanctions Laws and Regulations (any such Person, a “Designated Person”) or (ii) is engaged (or will engage) in any dealings or transactions with any such Designated Persons to the extent prohibited by applicable Sanctions Laws and Regulations.  Neither any Borrower, any Guarantor nor any Subsidiary, director or officer of a Borrower or Guarantor or, to the knowledge of any Borrower, any Affiliate, agent or employee of a Borrower or any Guarantor, has engaged in any activity or conduct which would violate any applicable anti-bribery, anti-corruption or anti-money laundering laws or regulations in any applicable jurisdiction.”; and
(p)By deleting the words “federal, state or local” in the two (2) places where it appears 

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in §7.5(b) of the Loan Agreement, and inserting in lieu thereof the words “foreign, federal, state, local or provincial”; and
(q)By inserting the following sentence to the end of §7.19 of the Loan Agreement:
“Neither the Borrower, the REIT nor any of their Subsidiaries shall have any Canadian Pension Plans or Canadian Benefit Plans.”; and
(r)By deleting the word “and” appearing at the end of §7.22(a)(vii) of the Loan Agreement, deleting the period appearing at the end of §7.22(a)(viii) of the Loan Agreement, and inserting in lieu thereof a semi-colon, and inserting the following as §7.22(a)(ix) and (x) of the Loan Agreement:
“(ix)  the Borrower or Subsidiary Guarantor owning such Eligible Real Estate (and any other Subsidiaries of Borrower owning an interest in such Subsidiary) shall be organized under the laws of a State and shall have its principal place of business in the United States, consistent with the requirements of §7.2; and
(x)   not more than ten percent (10.0%) of the Unencumbered Asset Value shall be attributable to Eligible Real Estate located in Canada; provided that a failure to satisfy the requirements of this clause (x) shall not result in any such Eligible Real Estate not being included in the calculation of Unencumbered Asset Value, but any Unencumbered Asset Value attributable thereto in excess of such limitation shall be excluded for the purposes of calculating Unencumbered Asset Value.”; and
(s)By inserting the following as §7.23 of the Loan Agreement:
“§7.23 Sanctions Laws and Regulations.
(a)  The Borrower shall not, directly or indirectly, use the proceeds of the Loans, or lend, contribute or otherwise make available such proceeds to any Subsidiary, Unconsolidated Affiliate or other Person (i) to fund any activities or business of or with any Designated Person, or in any country or territory, that at the time of such funding is itself the subject of territorial  sanctions under applicable Sanctions Laws and Regulations, or (ii) in any manner that would result in a violation of applicable Sanctions Laws and Regulations by any party to this Agreement.
(b)  None of the funds or assets of the Borrower or any Guarantor that are used to pay any amount due pursuant to this Agreement shall constitute funds obtained from transactions with or relating to Designated Persons or countries which are themselves the subject of territorial sanctions under applicable Sanctions Laws and Regulations.”; and
(t)By inserting the work “hypothec,” following the word “charge” appearing in §8.2(a) of the Loan Agreement, and by inserting the word “intangibles,” following the words “general intangibles” appearing in §8.2(e) of the Loan Agreement; and
(u)By deleting in its entirety §8.2(iv)(C) of the Loan Agreement, and inserting in lieu thereof the following:
“(C) UCC pre-filings or PPSA registrations in respect of Permitted Liens prior to incurrence of such Permitted Liens; provided that if the Indebtedness to which such pre-filing relates is not promptly closed following such pre-filing, such pre-filed UCC or PPSA financing 

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statement shall be promptly released.”; and
(v)By deleting the reference to “§8.1(i)(A)” in the last paragraph of §8.2 of the Loan Agreement, and inserting in lieu thereof “§8.2(i)(A)”; and
(w)By deleting in its entirety the last paragraph of §8.6 of the Loan Agreement, and inserting in lieu thereof the following:
“At any time after an Event of Default shall have occurred hereunder the Agent may at its election (and will at the request of the Required Lenders) obtain such environmental assessments of any or all of the Unencumbered Properties included in the calculation of Unencumbered Asset Value prepared by an environmental consultant as may be necessary or advisable for the purpose of evaluating or confirming (i) whether any Hazardous Substances are present in the air, soil or water at or adjacent to any such Unencumbered Property and (ii) whether the use and operation of any such Unencumbered Property complies with all Environmental Laws to the extent required by the Loan Documents.  Additionally, at any time that the Agent or the Required Lenders shall have reasonable and objective grounds to believe that a Release or threatened Release of Hazardous Substances which any Person may be legally obligated to contain, correct or otherwise remediate or which otherwise may expose such Person to liability may have occurred, relating to any Unencumbered Property included in the calculation of Unencumbered Asset Value, or that any of the Unencumbered Property included in the calculation of Unencumbered Asset Value is not in compliance with Environmental Laws to the extent required by the Loan Documents, Borrower shall promptly upon the request of the Agent obtain and deliver to the Agent such environmental assessments of such Unencumbered Property prepared by an environmental consultant reasonably acceptable to the Agent as may be necessary or advisable for the purpose of evaluating or confirming (i) whether any Hazardous Substances are present in the air, soil or water at or adjacent to such Unencumbered Property and (ii) whether the use and operation of such Unencumbered Property comply with all Environmental Laws to the extent required by the Loan Documents.  Environmental assessments may include detailed visual inspections of such Unencumbered Property including, without limitation, any and all storage areas, storage tanks, drains, dry wells and leaching areas, and the taking of air, water and soil samples, as well as such other investigations or analyses as are reasonably necessary or appropriate for a complete determination of the compliance of such Unencumbered Property and the use and operation thereof with all applicable Environmental Laws.  All environmental assessments contemplated by this §8.6 shall be at the sole cost and expense of the Borrower.”; and
(x)By deleting in their entirety §12.1(h), (i) and (j) of the Loan Agreement, and inserting in lieu thereof the following:
 “(h)  the Borrower, any Guarantor or any of their respective Subsidiaries, (i) shall make an assignment for the benefit of creditors, or admit in writing its general inability to pay or generally fail to pay its debts as they mature or become due, or shall petition or apply for the appointment of a trustee or other custodian, liquidator, monitor, receiver, receiver-manager, or similar official for it or any substantial part of its assets, (ii) shall commence any case or other proceeding relating to it under any Insolvency Law, or (iii) shall take any action to authorize or in furtherance of any of the foregoing;
(i)  a petition or application shall be filed for the appointment of a trustee or other custodian, liquidator, receiver, monitor, receiver-manager, or similar official of the Borrower, any 

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Guarantor or any of their respective Subsidiaries or any substantial part of the assets of any thereof, or a case or other proceeding shall be commenced against any such Person under any Insolvency Law, and any such Person shall indicate its approval thereof, consent thereto or acquiescence therein or such petition, application, case or proceeding shall not have been dismissed within sixty (60) days following the filing or commencement thereof;
(j)  a decree or order is entered appointing a trustee, custodian, liquidator, receiver, monitor, receiver-manager, or similar official for the Borrower, any Guarantor or any of their respective Subsidiaries or adjudicating any such Person, bankrupt or insolvent, or approving a petition in any such case or other proceeding, or a decree or order for relief is entered in respect of any such Person in an involuntary case under any Insolvency Law;”; and
(y)By deleting the word “federal” appearing in the second (2nd) line of §12.1(o) of the Loan Agreement, and inserting in lieu thereof the words “federal or foreign”; and
(z)By inserting the words “or PPSA” following the words “the UCC” appearing in the last sentence of §14.10 of the Loan Agreement; and
(aa)By inserting the words “and PPSA” following the word “UCC” appearing in §15(g) of the Loan Agreement; and
(bb)    By inserting the following new §34 into the Loan Agreement:
“34.    ACKNOWLEDGEMENT AND CONSENT TO BAIL-IN OF EEA FINANCIAL INSTITUTIONS.  
Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
		
	1.
	the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

		
	2.
	the effects of any Bail-In Action on any such liability, including, if applicable:

		
	1.
	a reduction in full or in part or cancellation of any such liability;

		
	2.
	a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

		
	3.
	the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.”

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3.Amendment to Guaranty.  Guarantors, the Lenders and the Agent do hereby modify and amend the Guaranty as follows:
(a)By inserting the words “, any Insolvency Law” following the words “(arising upon the voluntary or involuntary bankruptcy proceedings of the Borrower)” appearing in the second (2nd) line of Section 3(m) of the Guaranty; and
(b)By inserting the words “fraudulent conveyance, preference, transfer for undervalue or” before the words “bankruptcy preference period” appearing in the tenth (10th) line of the last paragraph of Section 3 of the Guaranty; and
(c)By inserting the word “, provincial” following the words “local, state” appearing in the second (2nd) line of Section 8 of the Guaranty; and
(d)By deleting in its entirety Section 10 of the Guaranty, and inserting in lieu thereof the following:
“10.    No Contest with Credit Parties; Subordination.  Any indebtedness of Borrower to Guarantors now or hereafter existing is hereby subordinated to the payment and performance of the Obligations.  Each Guarantor agrees that, for so long as any Obligation remains outstanding or subject to any bankruptcy preference, fraudulent conveyance, preference or transfer for undervalue period or any other possibility of disgorgement or any Credit Party has any obligation to make any Loans, no Guarantor will seek, accept, or retain for its own account, any payment from Borrower on account of such subordinated debt; provided however that so long as no Default or Event of Default shall exist, Guarantor may seek, accept and retain payments by Borrower of principal and interest in connection with the subordinated debt.  Any payments to any Guarantor on account of such subordinated debt which are not otherwise permitted herein shall be collected and received by such Guarantor in trust for the Credit Parties and shall be paid over to the Credit Parties on account of the Indebtedness without impairing or releasing the obligations of Guarantors hereunder.  No Guarantor will, by paying any sum recoverable hereunder (whether or not demanded by the Credit Parties) or by any means or on any other ground, claim any set-off or counterclaim against Borrower in respect of any liability of such Guarantor to Borrower or, in proceedings under any Insolvency Law of any nature, prove in competition with the Credit Parties in respect of any payment hereunder or be entitled to have the benefit of any counterclaim or proof of claim or dividend or payment by or on behalf of Borrower or the benefit of any other security for any of the Obligations hereby guaranteed which, now or hereafter, the Credit Parties may hold or in which they may have any share.  For so long as any Obligation remains outstanding or subject to any bankruptcy preference, fraudulent conveyance, preference or transfer for undervalue period or any other possibility of disgorgement or any Credit Party has any obligation to make any Loans, each Guarantor hereby expressly waives any right of contribution from or indemnity against Borrower, whether at law or in equity, arising from any payments made by any Guarantor pursuant to the terms of this Guaranty, and each Guarantor acknowledges that no Guarantor has any right whatsoever to proceed against Borrower or for reimbursement of any such payments except for those rights of each Guarantor under the Contribution Agreement; provided, however, each Guarantor agrees not to pursue or enforce any of its rights under the Contribution Agreement and each Guarantor agrees not to make or receive any payment on account of the Contribution Agreement so long as any of the Obligations remain unpaid or undischarged.  In the event any Guarantor shall receive such payment under or on account of the Contribution Agreement, it shall hold such payment as 

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trustee for Credit Parties and pay such amounts over to the Agent for distribution to the applicable Credit Parties on account of the indebtedness of Borrower to Credit Parties but without reducing or affecting in any manner the liability of Guarantors under the other provisions of this Guaranty except to the extent the principal amount or other portion of such indebtedness shall have been reduced by such payment.  In connection with the foregoing and for so long as any Obligation remains outstanding or subject to any bankruptcy preference, fraudulent conveyance, preference or transfer for undervalue period or any other possibility of disgorgement or any Credit Party has any obligation to make any Loans, each Guarantor expressly waives any and all rights of subrogation to the Credit Parties against Borrower, and each Guarantor hereby waives any rights to enforce any remedy which the Credit Parties may have against Borrower and any rights to participate in any collateral for Borrower’s obligations under the Loan Documents.”; and
(e)By deleting in its entirety Section 19 of the Guaranty, and inserting in lieu thereof the following:
“19.    Business Failure, Bankruptcy or Insolvency.  In the event of the business failure of any Guarantor or if there shall be pending any bankruptcy, insolvency or other case or proceeding with respect to any Guarantor under any Insolvency Law or any other applicable law or in connection with the insolvency of any Guarantor, or if a liquidator, receiver, or trustee shall have been appointed for any Guarantor or any Guarantor’s properties or assets, the Credit Parties may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Credit Parties allowed in any proceedings relative to such Guarantor, or any of such Guarantor’s properties or assets, and, irrespective of whether the indebtedness or other obligations of Borrower guaranteed hereby shall then be due and payable, by declaration or otherwise, the Credit Parties shall be entitled and empowered to file and prove a claim for the whole amount of any sums or sums owing with respect to the indebtedness or other obligations of Borrower guaranteed hereby, and to collect and receive any moneys or other property payable or deliverable on any such claim.  Each Guarantor covenants and agrees that upon the commencement of a voluntary or involuntary bankruptcy proceeding by or against Borrower, Guarantors shall not seek a supplemental stay or otherwise pursuant to 11 U.S.C. §105 or any other provision of the United States Bankruptcy Code, as amended, any other Insolvency Law or any other debtor relief law (whether statutory, common law, case law, or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may be or become applicable, to stay, interdict, condition, reduce or inhibit the ability of the Credit Parties to enforce any rights of the Credit Parties against Guarantors by virtue of this Guaranty or otherwise.”; and
(f)By deleting in its entirety Section 27(a) of the Guaranty, and inserting in lieu thereof the following:
 “(a)    This Guaranty and all covenants made by the Guarantors under the Loan Documents shall, subject to the terms of Section 5 hereof, continue in effect for so long as any Obligation remains outstanding or subject to any bankruptcy preference, fraudulent conveyance, preference or transfer for undervalue period or any other possibility of disgorgement or any Credit Party has any obligation to make any Loans and until all of the obligations (other than contingent indemnification obligations) of Guarantors to Credit Parties under this Guaranty are fully and finally performed and discharged in accordance with their terms (and without regard to any extension, reduction or other alteration thereof in any proceeding under the Bankruptcy Code, any other Insolvency Law or any other proceeding described in Section 

11

12.1(h), (i) or (j) of the Credit Agreement) and are not subject to any bankruptcy preference period or any other disgorgement.”; and
(g)By inserting the following as Section 28 of the Guaranty:
“28.  Judgment Currency.  For the purposes of obtaining judgment in any court if it is necessary to convert a sum due from the Guarantor hereunder in the currency expressed to be payable herein (i.e. Dollars) (the “Specified Currency”) into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Agent could purchase the Specified Currency with such other currency at the Agent’s main Cleveland, Ohio office on the Business Day preceding that on which final, non-appealable judgment is given.  The obligations of the Guarantor in respect of any sum due hereunder shall, notwithstanding any judgment in a currency other than the Specified Currency, be discharged only to the extent that on the Business Day following receipt by any Lender (including the Agent), as the case may be, of any sum adjudged to be so due in such other currency such Lender (including the Agent), as the case may be, may in accordance with normal, reasonable banking procedures purchase the Specified Currency with such other currency.  If the amount of the Specified Currency so purchased is less than the sum originally due to such Lender (including the Agent), as the case may be, in the Specified Currency, the Guarantor agrees, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender (including the Agent), as the case may be, against such loss, and to pay such additional amounts upon demand from the Agent.”
4.References to Loan Agreement and Guaranty.  All references in the Loan Documents to the Loan Agreement or Guaranty shall be deemed a reference to the Loan Agreement or Guaranty as modified and amended herein.
5.Acknowledgment of Borrower and Guarantors.  Borrower and Guarantors hereby acknowledge, represent and agree that the Loan Documents, as modified and amended herein, remain in full force and effect and constitute the valid and legally binding obligation of Borrower and Guarantors, as applicable, enforceable against Borrower and Guarantors in accordance with their respective terms, and that the execution and delivery of this Amendment does not constitute, and shall not be deemed to constitute, a release, waiver or satisfaction of Borrower’s or any Guarantor’s obligations under the Loan Documents.
6.Representations and Warranties.  Borrower and Guarantors represent and warrant to the Agent and the Lenders as follows:
(a)Authorization.  The execution, delivery and performance of this Amendment and the other documents executed in connection herewith and the transactions contemplated hereby and thereby (i) are within the authority of Borrower and Guarantors, (ii) have been duly authorized by all necessary proceedings on the part of Borrower and Guarantors, (iii) do not and will not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which any of Borrower or Guarantors is subject or any judgment, order, writ, injunction, license or permit applicable to any of Borrower or Guarantors, (iv) do not and will not conflict with or constitute a default (whether with the passage of time or the giving of notice, or both) under any provision of the partnership agreement or certificate, certificate of formation, operating agreement, articles of incorporation or other charter documents or bylaws of, or any mortgage, indenture, agreement, contract or other instrument binding upon, any of Borrower or Guarantors or any of their respective properties or to which any of Borrower or Guarantors is subject, and (v) do not and 

12

will not result in or require the imposition of any lien or other encumbrance on any of the properties, assets or rights of any of Borrower or Guarantors.
(b)Enforceability.  This Amendment and the other documents executed in connection herewith are the valid and legally binding obligations of Borrower and Guarantors enforceable in accordance with the respective terms and provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and the effect of general principles of equity.
(c)Approvals.  The execution, delivery and performance of this Amendment and the other documents executed in connection herewith and the transactions contemplated hereby and thereby do not require the approval or consent of any Person or the authorization, consent, approval of or any license or permit issued by, or any filing or registration with, or the giving of any notice to, any court, department, board, commission or other governmental agency or authority other than those already obtained and any disclosure filings with the SEC as may be required with respect to this Amendment.
(d)Reaffirmation.  Borrower and Guarantors reaffirm and restate as of the date hereof each and every representation and warranty made by Borrower and Guarantors and their respective Subsidiaries in the Loan Documents or otherwise made by or on behalf of such Persons in connection therewith except for representations or warranties that expressly relate to an earlier date.
7.No Default.  By execution hereof, Borrower and Guarantors certify that as of the date of this Amendment and immediately after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.
8.Waiver of Claims.  Borrower and Guarantors acknowledge, represent and agree that none of such Persons has any defenses, setoffs, claims, counterclaims or causes of action of any kind or nature whatsoever arising on or before the date hereof with respect to the Loan Documents, the administration or funding of the Loan or with respect to any acts or omissions of the Agent or any Lender, or any past or present officers, agents or employees of the Agent or any Lender pursuant to or relating to the Loan Documents, and each of such Persons does hereby expressly waive, release and relinquish any and all such defenses, setoffs, claims, counterclaims and causes of action arising on or before the date hereof, if any.
9.Ratification.  Except as hereinabove set forth, all terms, covenants and provisions of the Loan Agreement and Guaranty remain unaltered and in full force and effect, and the parties hereto do hereby expressly ratify and confirm the Loan Documents as modified and amended herein.  Guarantors hereby consent to the terms of this Amendment.  Nothing in this Amendment or any other document delivered in connection herewith shall be deemed or construed to constitute, and there has not otherwise occurred, a novation, cancellation, satisfaction, release, extinguishment or substitution of the indebtedness evidenced by the Notes or the other obligations of Borrower and Guarantors under the Loan Documents.
10.Effective Date.  The effectiveness of this Amendment is subject to receipt by the Agent of each of the following, each in form and substance reasonably satisfactory to the Agent:
(a)A counterpart of this Amendment duly executed by Borrower, Guarantors, the Required Lenders and the Agent;
(b)Evidence that Borrower shall have paid all fees due and payable with respect to this Amendment; and
(c)Such other certificates, documents, instruments and agreements as the Agent may 

13

reasonably request.
Borrower will pay the reasonable fees and expenses of the Agent in connection with this Amendment in accordance with Section 15 of the Loan Agreement.
11.Amendment as Loan Document.  This Amendment shall constitute a Loan Document.
12.Counterparts.  This Amendment may be executed in any number of counterparts which shall together constitute but one and the same agreement.   Delivery of an executed counterpart of a signature page of this Amendment by telecopier or other electronic means shall be effective as delivery of a manually executed counterpart of this Amendment.
13.MISCELLANEOUS.  THIS AMENDMENT SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective permitted successors, successors-in-title and assigns as provided in the Loan Agreement.

[CONTINUED ON NEXT PAGE]

14

IN WITNESS WHEREOF, the parties hereto have hereto set their hands and affixed their seals as of the day and year first above written.

BORROWER:

DUPONT FABROS TECHNOLOGY, L.P., a Maryland limited partnership

		
	By:
	DuPont Fabros Technology, Inc., a Maryland corporation, its sole General Partner

By: /s/ Richard A. Montfort, Jr.    
Name:    Richard A. Montfort, Jr.
		
	Title:
	Executive Vice President, General Counsel and Secretary

REIT:

DUPONT FABROS TECHNOLOGY, INC.,
a Maryland corporation, as Guarantor

By: /s/ Richard A. Montfort, Jr.    
		
	Name:
	Richard A. Montfort, Jr.

		
	Title:
	Executive Vice President, General Counsel and Secretary

SUBSIDIARY GUARANTORS:

GRIZZLY EQUITY LLC,
a Delaware limited liability company

By:    DuPont Fabros Technology, L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
		
	Name:
	Richard A. Montfort, Jr.

		
	Title:
	Executive Vice President, General Counsel and Secretary

15

GRIZZLY VENTURES LLC,
a Delaware limited liability company

By:     Grizzly Equity LLC,
a Delaware limited liability company,
its Managing Member

By:    DuPont Fabros Technology, L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
Name:    Richard A. Montfort, Jr.
		
	Title:
	Executive Vice President, General Counsel and Secretary

LEMUR PROPERTIES LLC,
a Delaware limited liability company

By:    DuPont Fabros Technology, L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
Name:    Richard A. Montfort, Jr.
		
	Title:
	Executive Vice President, General Counsel and Secretary

16

PORPOISE VENTURES LLC,
a Delaware limited liability company

By:    DuPont Fabros Technology, L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
		
	Name:
	Richard A. Montfort, Jr.

		
	Title:
	Executive Vice President, General Counsel and Secretary

RHINO EQUITY LLC, 
a Delaware limited liability company

By:    DuPont Fabros Technology, L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
Name:    Richard A. Montfort, Jr.
		
	Title:
	Executive Vice President, General Counsel and Secretary

17

TARANTULA INTERESTS LLC, 
a Delaware limited liability company

By:    DuPont Fabros Technology L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
Name:    Richard A. Montfort, Jr.
		
	Title:
	Executive Vice President, General Counsel and Secretary

TARANTULA VENTURES LLC,
a Delaware limited liability company

By:     Tarantula Interests, LLC,
a Delaware limited liability company,
its Managing Member

By:    DuPont Fabros Technology, L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
		
	Name:
	Richard A. Montfort, Jr.

		
	Title:
	Executive Vice President, General Counsel and Secretary

18

WHALE HOLDINGS LLC,
a Delaware limited liability company

By:    DuPont Fabros Technology, L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
Name:    Richard A. Montfort, Jr.
		
	Title:
	Executive Vice President, General Counsel and Secretary

WHALE INTERESTS LLC,
a Delaware limited liability company

By:     Whale Holdings LLC,
a Delaware limited liability company,
its Managing Member

By:    DuPont Fabros Technology, L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
		
	Name:
	Richard A. Montfort, Jr.

		
	Title:
	Executive Vice President, General Counsel and Secretary

19

WHALE VENTURES LLC,
a Delaware limited liability company

By:    Whale Interests LLC,
a Delaware limited liability company,
its Managing Member

By:     Whale Holdings LLC,
a Delaware limited liability company,
its Managing Member

By:    DuPont Fabros Technology, L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
Name:    Richard A. Montfort, Jr.
		
	Title:
	Executive Vice President, General Counsel and Secretary

YAK MANAGEMENT LLC, 
a Delaware limited liability company

By:    DuPont Fabros Technology, L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
Name:    Richard A. Montfort, Jr.
		
	Title:
	Executive Vice President, General Counsel and Secretary

20

YAK INTERESTS LLC,
a Delaware limited liability company

By:     Yak Management LLC,
a Delaware limited liability company,
its Managing Member

By:    DuPont Fabros Technology, L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
		
	Name:
	Richard A. Montfort, Jr.

		
	Title:
	Executive Vice President, General Counsel and Secretary

XERES MANAGEMENT LLC,
a Delaware limited liability company

By:    DuPont Fabros Technology, L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
Name:    Richard A. Montfort, Jr.
		
	Title:
	Executive Vice President, General Counsel and Secretary

21

XERES INTERESTS LLC,
a Delaware limited liability company

By:    Xeres Management LLC,
a Delaware limited liability company,
its Managing Member

By:    DuPont Fabros Technology, L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
		
	Name:
	Richard A. Montfort, Jr.

		
	Title:
	Executive Vice President, General Counsel and Secretary

XERES VENTURES LLC,
a Delaware limited liability company

By:    Xeres Interests LLC,
a Delaware limited liability company,
its Managing Member

By:     Xeres Management LLC,
a Delaware limited liability company,
its Managing Member

By:    DuPont Fabros Technology, L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
Name:    Richard A. Montfort, Jr.
		
	Title:
	Executive Vice President, General Counsel and Secretary

22

FOX PROPERTIES LLC,
a Delaware limited liability company

By:    DuPont Fabros Technology, L.P.,
a Maryland limited partnership,
its Managing Member

By:    DuPont Fabros Technology, Inc.,
a Maryland corporation,
its General Partner

By: /s/ Richard A. Montfort, Jr.    
Name:    Richard A. Montfort, Jr.
		
	Title:
	Executive Vice President, General Counsel and Secretary

23

AGENT AND LENDERS:

ROYAL BANK OF CANADA, 
as Agent

By: /s/ Yvonne Brazier    
      Name: Yvonne Brazier
      Title:  Manager Agency

ROYAL BANK OF CANADA, 
as Lender 

By: /s/ Dan LePage    
      Name: Dan LePage
      Title:  Authorized Signatory

STATE BANK OF INDIA, LOS ANGELES AGENCY, 
as Lender 

By: /s/ Yenduri Subba Rao    
      Name: Yenduri Subba Rao
      Title:  Chief Executive Officer

RAYMOND JAMES BANK, N.A., 
as Lender

By: /s/ James M. Armstrong    
     Name:  James M. Armstrong
     Title:  Senior Vice President

SUNTRUST BANK, 
as Lender

By: /s/ Nancy B. Richards    
     Name:   Nancy B. Richards
     Title:     Senior Vice President

CITIZENS BANK, N.A. (formerly knows as RBS Citizens, N.A.) 
as Lender 

By: /s/ Brad E. Bindas    
      Name: Brad E. Bindas
      Title:  Senior Vice President

24

COBANK, ACB, 
as Lender

By: /s/ Gloria Hancock    
     Name:  Gloria Hancock
     Title:  Vice President

 FIRST TENNESSEE BANK N.A., 
as Lender

By: /s/ Jean M. Brennan    
     Name: Jean M. Brennan
     Title: Senior Vice President

REGIONS BANK, 
as Lender

By: /s/ Kerri L. Raines    
     Name: Kerri L. Raines
     Title: Senior Vice President
 

SYNOVUS BANK, 
as Lender

By: /s/ Conner Parsons    
     Name: Conner Parsons
     Title: Associate

TD BANK, N.A., 
as Lender

By: /s/ Mary Merrill    
     Name: Mary Merrill, VP
     Title: Senior Credit Manager
 

TRISTATE CAPITAL BANK, 
as Lender

By: /s/ Ellen Frank    
     Name: Ellen Frank
     Title: Senior Vice President

25ex4-1.htm

Exhibit 4.1

 

FORM OF COMMON STOCK PURCHASE WARRANT

MAJESCO ENTERTAINMENT COMPANY

 

 

Warrant Shares: [______]                                                                           Initial Issuance Date:  [___], 2016

 

Warrant No: [______]

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [______] or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the Initial Issuance Date  (the “Initial Exercise Date”) and on or prior to the close of business on the twenty four (24) month anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from MAJESCO ENTERTAINMENT COMPANY, a Delaware corporation (the “Company”), up to [____] shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.                      Definitions.  Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated [____] 2016, among the Company and the Holder.

 

Section 2.                      Exercise.

 

a) Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto. Within two (2) Trading Days following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. Notwithstanding anything herein to the contrary (although the Holder may surrender the Warrant to, and receive a replacement Warrant from, the Company), the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.  The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise Form within one (1) Trading Day of delivery of such notice.  The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

b) Exercise Price.  The initial exercise price per share of the Common Stock under this Warrant shall be $1.15, (the “Initial Exercise Price”) subject to adjustment hereunder (as adjusted, the “Exercise Price”), payable, subject to Section 2(c) below, in immediately available funds.

 

c) Cashless Exercise. If at any time after the six (6) month anniversary of the Initial Issuance Date, provided there is no effective registration statement registering, or no current prospectus available for the resale of the Warrant Shares by the Holder, then this Warrant may also be exercised at the Holder’s election, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

	
  

	
 (A) = the VWAP on the Trading Day immediately preceding the date on which Holder elects to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable Notice of Exercise;

	
  

	
(B) = the Exercise Price of this Warrant, as adjusted hereunder; and

	
  

	
(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

  

-1-

  

 

Notwithstanding anything herein to the contrary, on the Termination Date, unless the Holder notifies the Company otherwise, if there is no effective Registration Statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder and the Exercise Price is greater than the VWAP on the Trading Day immediately preceding the date on which the Warrant would otherwise expire, then this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).

d) Mechanics of Exercise.

 

(a) Delivery of Certificates Upon Exercise.  Certificates for shares purchased hereunder shall be transmitted by the Company’s transfer agent for its Common Stock (the “Transfer Agent”) to the Holder by crediting the account of the Holder’s prime broker with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) this Warrant is being exercised via cashless exercise and Rule 144 is available, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise by the date that is three (3) Trading Days after the latest of (A) the delivery to the Company of the Notice of Exercise, (B) surrender of this Warrant (if required) and (C) payment of the aggregate Exercise Price as set forth above (including by cashless exercise, if permitted) (such date, the “Warrant Share Delivery Date”).   The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of such shares, having been paid.  The Company understands that a delay in the delivery of the Warrant Shares after the Warrant Share Delivery Date could result in economic loss to the Holder. As compensation to the Holder for such loss, the Company agrees to pay (as liquidated damages and not as a penalty) to the Holder for late issuance of Warrant Shares upon exercise of this Warrant the proportionate amount of $10 per Trading Day (increasing to $20 per Trading Day after the fifth (5th) Trading Day) after the Warrant Share Delivery Date for each $1,000 of Exercise Price of Warrant Shares for which this Warrant is exercised which are not timely delivered.  The Company shall pay any payments incurred under this Section in immediately available funds upon demand.  Furthermore, in addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Warrant Shares by the Warrant Share Delivery Date, the Holder may revoke all or part of the relevant Warrant exercise by delivery of a notice to such effect to the Company, whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to the exercise of the relevant portion of this Warrant, except that the liquidated damages described above shall be payable through the date notice of revocation or rescission is given to the Company.

i. Delivery of New Warrants Upon Exercise.  If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

ii. Rescission Rights.  If the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right, at any time prior to issuance of such Warrant Shares, to rescind such exercise.

 

iii. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise.  In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder.  For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss.  Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

  

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iv. No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

v. Charges, Taxes and Expenses.  Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.  The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise.

 

vi. Closing of Books.  The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

e) Holder’s Exercise Limitations.  (i)                                                                The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other  Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith.   To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.   In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the SEC, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported.  The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.  The Holder may decrease the Beneficial Ownership Limitation at any time and the Holder, upon not less than 61 days’ prior notice to the Company, may increase the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply.  Any such increase will not be effective until the 61st day after such notice is delivered to the Company.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

  

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Section 3.                      Certain Adjustments.

 

a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant or pursuant to any of the other Transaction Documents), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b) Subsequent Rights Offerings.  In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to all of the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

c) Pro Rata Distributions.  If the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common Stock (and not to the Holder) evidences of its indebtedness or assets (including cash and cash dividends) or rights or warrants to subscribe for or purchase any security other than the Common Stock (which shall be subject to Section 3(c)), then in each such case the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the VWAP determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record date less the then per share fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith.  In either case the adjustments shall be described in a statement provided to the Holder of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock.  Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above.

 

d) Fundamental Transaction.  If, at any time while this Warrant is outstanding, the Company enters into a Fundamental Transaction then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant) the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant).  For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.  The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction).  Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

 

  

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e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest whole  share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

f) Notice to Holder.

 

i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, to the extent that such information constitutes material non-public information (as determined in good faith by the Company) the Company shall deliver to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice.  To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission SEC pursuant to a Current Report on Form 8-K.  The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

Section 4.                      Transfer of Warrant.

 

a) Transferability.  Subject to compliance with any applicable securities laws and the provisions of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled.  The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney.  Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

  

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c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company or its transfer agent for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

Section 5.                      Certain Definitions.  For purposes of this Warrant, the following terms shall have the following meanings:

 

 

(a)           “Affiliate” shall mean as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person.  For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.  For purposes of this definition, a Person shall be deemed to be “controlled by” a Person if such latter Person possesses, directly or indirectly, power to vote 10% or more of the securities having ordinary voting power for the election of directors of such former Person

(b)           “Bloomberg” means Bloomberg Financial Markets.

(c)           “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

(d)           “Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or the last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by the OTC Markets Group LLC.  If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.  All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

 

 

(e)           “Common Stock” means (i) the Company’s shares of Common Stock, par value $0.001 per share, and (ii) any share capital into which such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.

(f)           “Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock

  

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 (g)           “Fundamental Transaction” means that (i) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more related transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries is the surviving corporation) any other person unless immediately following the closing of such transaction or series of related transactions the persons holding more than 50% of the Voting Stock of the Company prior to such closing continue to hold more than 50% of the Voting Stock of the Company following such closing or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its respective properties or assets to any other person, or (3) assist any other person in making a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock of the Company held by the person or persons making or party to, or associated or affiliated with the persons making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other person whereby such other person acquires more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock of the Company held by the other person or other persons making or party to, or associated or affiliated with the other persons making or party to, such stock or share purchase agreement or other business combination) excluding any equity financing transaction in which shares of Voting Stock are issued, or (5) (I) reorganize, recapitalize or reclassify the Common Stock, (II) effect or consummate a stock combination, reverse stock split or other similar transaction involving the Common Stock or (III) make any public announcement or disclosure with respect to any stock combination, reverse stock split or other similar transaction involving the Common Stock (including, without limitation, any public announcement or disclosure of (x) any potential, possible or actual stock combination, reverse stock split or other similar transaction involving the Common Stock or (y) board or stockholder approval thereof, or the intention of the Company to seek board or stockholder approval of any stock combination, reverse stock split or other similar transaction involving the Common Stock), or (ii) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Voting Stock of the Company.

(h)           “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

(i)           “Principal Market” means The NASDAQ Capital Market or the principal securities exchange or securities market on which the Common Stock is then quoted or traded.

 

 

 (j)             “Rule 144” means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule

 

(k)             “Subsidiary” means any subsidiary of the Company including any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

 

(l)           “Trading Day” means any day on which the Common Stock are traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock are then traded; provided that “Trading Day” shall not include any day on which the Common Stock are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock are suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).

(m)           “Voting Stock” of a person means capital stock of such person of the class or classes pursuant to which the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers, trustees or other similar governing body of such person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

 

(n)           “VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function set to “weighted average” or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and such Holder. If the Company and such Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 22 of the Series C Certificate of Designations. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period

 

  

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Section 6.                      Miscellaneous.

 

a) No Rights as Stockholder Until Exercise.  This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).

 

b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c) Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.

 

d) Authorized Shares.

 

(i)           The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock 100% of the maximum number of shares for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Principal Market upon which the Common Stock may be listed.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

(ii)           Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

(iii)           Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

 

f) Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, or unless exercised in a cashless exercise when Rule 144 is available, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

  

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g) Non-waiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies.  Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company intentionally and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

h) Notices.  Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

 

i) Limitation of Liability.  No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

j) Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k) Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l) Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holders of not less than a 60% of the then outstanding Warrants issued pursuant to the Purchase Agreement.

 

m) Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

n) Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

********************

(Signature Page Follows)

  

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

 

	
MAJESCO ENTERTAINMENT COMPANY

 

 

	
 

 

By:__________________________________________

     Name: 

     Title:

 

  

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NOTICE OF EXERCISE

TO:           MAJESCO ENTERTAINMENT COMPANY

(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2) Payment shall take the form of (check applicable box):

 

[  ] in lawful money of the United States; or

 

[ ] [if permitted] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

(4) After giving effect to this Notice of Exercise, the undersigned will not have exceeded the Beneficial Ownership Limitation.

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

_______________________________

_______________________________

_______________________________

[SIGNATURE OF HOLDER]

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

  

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ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

MAJESCO ENTERTAINMENT COMPANY

FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

Dated:  ______________, _______

Holder’s Signature:             _____________________________

Holder’s Address:               _____________________________

 

_____________________________

Signature Guaranteed:  ___________________________________________

NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company.  Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

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