THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF
HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
ENTERTAINMENT BOULEVARD, INC.
Expires
No. W-
FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, ENTERTAINMENT BOULEVARD, INC., a Nevada corporation (together
with its successors and assigns, the "Issuer"), hereby certifies that
or its registered assigns is entitled to subscribe for and purchase, during
the period specified in this Warrant, up to shares (subject to
adjustment as hereinafter provided) of the duly authorized, validly issued,
fully paid and non-assessable common stock of the Issuer (the "Common
Stock"), at an exercise price per share equal to the Warrant Price then in
effect, subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. Capitalized terms used in this Warrant and not
otherwise defined herein shall have the respective meanings specified in
Section 7 hereof.
1. TERM. The right to subscribe for and purchase shares of Warrant
Stock represented hereby shall commence one year after the Original Issue
Date of this Warrant and shall expire at p.m., New York City time, on
(such period being the "Term"). Prior to the end of the Term, the
Issuer will not take any action which would terminate the Warrants.
2. METHOD OF EXERCISE PAYMENT: ISSUANCE OF NEW WARRANT;
REGISTRATION, TRANSFER AND EXCHANGE.
(a) TIME OF EXERCISE. The purchase rights represented by this Warrant
may be exercised in whole or in part at any time and from time to time during
the Term.
(b) METHOD OF EXERCISE. The Holder hereof may exercise this Warrant,
in whole or in part, by the surrender of this Warrant (with the exercise form
attached hereto duly executed) at the principal office of the Issuer, and by
the payment to the Issuer of an amount of consideration therefor equal to the
Warrant Price in effect on the date of such exercise multiplied by the number
of shares of Warrant Stock with respect to which this Warrant is then being
exercised, payable at such Xxxxxx's election (i) by certified or official
bank check, (ii) by surrender to the Issuer for cancellation of a portion of
this Warrant representing the difference between the total number of shares
of Warrant Stock in respect of which the Warrants are being exercised minus
the amount determined by multiplying the number of shares of Warrant Stock in
respect of which the Warrants are being exercised by a fraction, the
numerator of which is an amount equal to the Current Market Price per share
of Warrant Stock as of the date of such exercise less the Warrant Price, and
the denominator of which is the Current Market Price, or (iii) by a
combination of the foregoing methods of payment selected by the Holder of
this Warrant. In any case where the consideration payable upon such exercise
is being paid in whole or in part pursuant to the provisions of clause (ii)
of this Section 2(b), such exercise shall be accompanied by written notice
from the Holder of this Warrant specifying the manner of payment thereof, and
in the case of an application of clause (ii), containing a calculation
showing the number of shares of Warrant Stock with respect to which rights
are being surrendered thereunder and the net number of shares to be issued
after giving effect to such surrender.
(c) ISSUANCE OF STOCK CERTIFICATES. In the event of any exercise of
the rights represented by this Warrant in accordance with and subject to the
terms and conditions hereof, (i) certificates for the shares of Warrant Stock
so purchased shall be dated the date of such exercise and delivered to the
Holder hereof within a reasonable time, not exceeding three Trading Days
after such exercise, and the Holder hereof shall be deemed for all purposes
to be the Holder of the shares of Warrant Stock so purchased as of the date
of such exercise, and (ii) unless this Warrant has expired, a new Warrant
representing the number of shares of Warrant Stock, if any, with respect to
which this Warrant shall not then have been exercised (less any amount
thereof which shall have been canceled in payment or partial payment of the
Warrant Price as hereinabove provided) shall also be issued to the Holder
hereof at the Issuer's expense within such time.
(d) REGISTRATION. The Warrants shall be numbered and shall be
registered in a Warrant register (the "Warrant Register"). The Issuer shall
be entitled to treat the registered holder of any Warrant on the Warrant
Register (the "Holder") as the owner in fact thereof for all purposes and
shall not be bound to recognize any equitable or other claim to or interest
in such Warrant on the part of any other person, and shall not be liable for
any registration of transfer of Warrants which are registered or are to be
registered in the name of a fiduciary or the nominee of a fiduciary unless
made with the actual knowledge that a fiduciary or nominee is committing a
breach of trust in requesting such registration of transfer, or with such
knowledge of such facts that its participation therein amounts to bad faith.
The Warrants shall be registered initially in the name of in such
denominations as may request in writing to the
Issuer.
(e) TRANSFER OF WARRANT. The Warrants will not be sold, transferred,
assigned or hypothecated, in part or in whole (other than by will or pursuant
to the laws of descent and distribution), except to registered assigns of the
Holder and thereafter only upon delivery thereof duly endorsed by the Holder
or by his duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment or authority to transfer. In all
cases of transfer by an attorney, the original power of attorney, duly
approved, or an official copy thereof, duly certified, shall be deposited
with the Issuer. In case of transfer by executors, administrators, guardians
or other legal representatives, duly authenticated evidence of their
authority shall be produced, and may be required to be deposited with the
Issuer in its discretion. Upon any registration of transfer, the Issuer
shall deliver a new Warrant or
Warrants to the persons entitled thereto. The Warrants may be exchanged at
the option of the Holder thereof for another Warrant, or other Warrants, of
different denominations, of like tenor and representing in the aggregate the
right to purchase a like number of Common Shares upon surrender to the Issuer
or its duly authorized agent. Notwithstanding the foregoing, the Issuer shall
have no obligation to cause Warrants to be transferred on its books to any
person if such transfer would violate the Securities Act.
(f) COMPLIANCE WITH SECURITIES LAWS.
(i) The Holder of this Warrant, by acceptance hereof,
acknowledges that this Warrant and the shares of Warrant Stock to be issued
upon exercise hereof are being acquired solely for the Holder's own account
and not as a nominee for any other party, and for investment, and that the
Holder will not offer, sell or otherwise dispose of this Warrant or any
shares of Warrant Stock to be issued upon exercise hereof except pursuant to
an effective registration statement, or an exemption from registration, under
the Securities Act and any applicable state securities laws.
(ii) Except as provided in paragraph (iii) below, this
Warrant and all certificates representing shares of Warrant Stock issued
upon exercise hereof shall be stamped or imprinted with a legend in
substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.
(iii) The restrictions imposed by this subsection (f) upon the
transfer of this Warrant and the shares of Warrant Stock to be
purchased upon exercise hereof shall terminate (A) when such securities
shall have been effectively registered under the Securities Act, (B)
upon the Issuer's receipt of an opinion of counsel, in form and
substance reasonably satisfactory to the Issuer, addressed to the
Issuer to the effect that such restrictions are no longer required to
ensure compliance with the Securities Act or (C) upon the Issuer's
receipt of other evidence reasonably satisfactory to the Issuer that
such registration is not required. Whenever such restrictions shall
cease and terminate as to any such securities, the Holder thereof shall
be entitled to receive from the Issuer (or its transfer agent and
registrar), without expense (other than applicable transfer taxes, if
any), new Warrants (or, in the case of shares of Warrant Stock, new
stock certificates) of like tenor not bearing the applicable legends
required by paragraph (ii) above relating to the Securities Act and
state securities laws.
(g) CONTINUING RIGHTS OF HOLDER. The Issuer will, at the time of or
at any time after each exercise of this Warrant, upon the request of the
Holder hereof or of any shares of Warrant Stock issued upon such exercise,
acknowledge in writing the extent, if any, of its continuing obligation to
afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
PROVIDED that if any such Holder shall fail to make any such request, the
failure shall not affect the continuing obligation of the Issuer to afford
such rights to such Holder.
3. STOCK FULLY PAID: RESERVATION AND LISTING OF SHARES: COVENANTS.
(a) STOCK FULLY PAID. The Issuer represents, warrants, covenants and
agrees that all shares of Warrant Stock which may be issued upon the exercise
of this Warrant or otherwise hereunder will, upon issuance, be duly
authorized, validly issued, fully paid and non-assessable and free from all
taxes, liens and charges created by or through Issuer. The Issuer further
covenants and agrees that during the period within which this Warrant may be
exercised, the Issuer will at all times have authorized and reserved for the
purpose of the issue upon exercise of this Warrant a sufficient number of
shares of Common Stock to provide for the exercise of this Warrant.
(b) PAYMENT OF TAXES. The Issuer will pay all documentary stamp taxes,
if any, attributable to the issuance of Warrant Stock; provided, however,
that the Issuer shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involved in the issue or delivery of any
certificates for Warrant Stock in a name other than that of the Holder of
Warrants in respect of which such Warrant Stock is issued.
(c) RESERVATION. If any shares of Common Stock required to be reserved
for issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under
any federal or state law before such shares may be so issued, the Issuer will
in good faith use its best efforts as expeditiously as possible at its
expense to cause such shares to be duly registered or qualified. American
Securities Transfer & Trust, Inc., transfer agent for the Common Shares (the
"Transfer Agent"), and every subsequent transfer agent, if any, for the
Warrant Stock will be irrevocably authorized and directed at all times until
the end of the Term to reserve such number of authorized and unissued Common
Shares as shall be required for such purpose. The Issuer will keep a copy of
this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for of the Issuer's securities issuable upon the exercise of
the Warrants. The Issuer will supply the Transfer Agent or any subsequent
transfer agent with duly executed certificates for such purpose and will
itself provide or otherwise make available any cash which may be
distributable as provided in Section 6 of this Agreement. All Warrants
surrendered in the exercise of the rights thereby evidenced shall be
canceled, and such canceled Warrants shall constitute sufficient evidence of
the number of Shares that have been issued upon the exercise of such
Warrants. No Common Shares shall be subject to reservation in respect of
unexercised Warrants subsequent to the end of the Term. If the Issuer shall
list any shares of Common Stock on any securities exchange or market it will,
at its expense, list thereon, maintain and increase when necessary such
listing, of, all shares of Warrant Stock from time to time issued upon
exercise of this Warrant or as otherwise provided hereunder, and, to the
extent permissible under the applicable securities exchange rules, all
unissued shares of Warrant Stock which are at any time issuable hereunder,
so long as any shares of Common Stock shall be so listed. The Issuer will
also so list on each securities exchange or market, and will maintain such
listing of, any other securities which the Holder of this Warrant shall be
entitled to receive upon the exercise of this Warrant if at the time any
securities of the same class shall be listed on such securities exchange or
market by the Issuer.
(d) COVENANTS. The Issuer shall not by any action including, without
limitation, amending the Articles of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other 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 the Holder hereof against dilution (to
the extent specifically provided herein) or impairment. Without limiting the
generality of the foregoing, the Issuer will (i) not permit the par value, if
any, of its Common Stock to exceed the then effective Warrant Price, (ii) not
amend or modify any provision of the Articles of Incorporation or by-laws of
the Issuer in any manner
that would adversely affect in any way the powers, preferences or relative
participating, optional or other special rights of the Common Stock or which
would adversely affect the rights of the Holders of the Warrants, (iii) take
all such action as may be reasonably necessary in order that the Issuer may
validly and legally issue fully paid and nonassessable shares of Common
Stock, free and clear of any liens, claims, encumbrances and restrictions
(other than as provided herein) upon the exercise of this Warrant, and (iv)
use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may
be reasonably necessary to enable the Issuer to perform its obligations under
this Warrant.
(e) LOSS, THEFT, DESTRUCTION OF WARRANTS. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft,
destruction or mutilation of any Warrant and, in the case of any such loss,
theft or destruction, upon receipt of indemnity or security satisfactory to
the Issuer or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, the Issuer will make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like
tenor and representing the right to purchase the same number of shares of
Common Stock. An applicant for such substitute Warrants shall also comply
with such other reasonable regulations and pay such other reasonable charges
as the Issuer may prescribe.
(f) RIGHTS AND OBLIGATIONS UNDER THE REGISTRATION RIGHTS AGREEMENT.
This Warrant and the Warrant Stock are entitled to the benefits and subject
to the terms of the Registration Rights Agreement dated as of even date
herewith between the Issuer and the Holders listed on the signature pages
thereof (as amended from time to time, the "Registration Rights Agreement").
The Issuer shall keep or cause to be kept a copy of the Registration Rights
Agreement, and any amendments thereto, at its chief executive office and
shall furnish, without charge, copies thereof to the Holder upon request.
4. ADJUSTMENT OF WARRANT PRICE AND WARRANT SHARE NUMBER. The number
and kind of Securities purchasable upon the exercise of this Warrant and the
Warrant Price shall be subject to adjustment from time to time upon the
happening of certain events as follows:
(a) RECAPITALIZATION, REORGANIZATION, RECLASSIFICATION, CONSOLIDATION,
MERGER OR SALE.
(i) In case the Issuer after the Original Issue Date shall do
any of the following (each, a "Triggering Event") (a) consolidate with
or merge into any other Person and the Issuer shall not be the
continuing or surviving corporation of such consolidation or merger, or
(b) permit any other Person to consolidate with or merge into the Issuer
and the Issuer shall be the continuing or surviving Person but, in
connection with such consolidation or merger, any Capital Stock
(excluding cash paid out on account of fractional shares) of the Issuer
shall be changed into or exchanged for Securities of any other Person or
cash or any other property, or (c) transfer all or substantially all of
its properties or assets to any other Person, or (d) effect a capital
reorganization or reclassification of its Capital Stock, then, and in
the case of each such Triggering Event, proper provision shall be made
so that, upon the basis and the terms and in the manner provided in this
Warrant, the Holder of this Warrant shall be entitled (x) upon the
exercise hereof at any time after the consummation of such Triggering
Event, to the extent this Warrant is not exercised prior to such
Triggering Event, or is redeemed in connection with such Triggering
Event, to receive at the Warrant Price in effect at the time immediately
prior to the consummation of such Triggering Event in lieu of the Common
Stock issuable upon such exercise of this Warrant prior to such
Triggering Event, the Securities, cash and property to which such
Holder would have been entitled upon the consummation of such Triggering
Event if such Holder had exercised the rights represented by this
Warrant immediately prior thereto, subject to adjustments and increases
(subsequent to such corporate action) as nearly equivalent
as possible to the adjustments provided for in Section 4 hereof or (y)
to sell this Warrant (or, at such Holder's election, a portion hereof)
to the Person continuing after or surviving such Triggering Event, or to
the Issuer (if Issuer is the continuing or surviving Person) at a sales
price equal to the amount of cash, property and/or Securities to which a
holder of the number of shares of Common Stock which would otherwise
have been delivered upon the exercise of this Warrant would have been
entitled upon the effective date or closing of any such Triggering Event
(the "Event Consideration"), less the amount or portion of such Event
Consideration having a fair value equal to the aggregate Warrant Price
applicable to this Warrant or the portion hereof so sold.
(ii) Notwithstanding anything contained in this Warrant to the
contrary, the Issuer will not effect any Triggering Event unless, prior
to the consummation thereof, each Person (other than the Issuer) which
may be required to deliver any Securities, cash or property upon the
exercise of this Warrant as provided herein shall assume, by written
instrument delivered to, and reasonably satisfactory to, the Holder of
this Warrant, (A) the obligations of the Issuer under this Warrant (and
if the Issuer shall survive the consummation of such Triggering Event,
such assumption shall be in addition to, and shall not release the
Issuer from, any continuing obligations of the Issuer under this
Warrant) and (B) the obligation to deliver to such Holder such shares of
Securities, cash or property as, in accordance with the foregoing
provisions of this subsection (a), such Holder shall be entitled to
receive, and such Person shall have similarly delivered to such Holder
an opinion of counsel for such Person, which counsel shall be reasonably
satisfactory to such Holder, stating that this Warrant shall thereafter
continue in full force and effect and the terms hereof (including,
without limitation, all of the provisions of this subsection (a)) shall
be applicable to the Securities, cash or property which such Person may
be required to deliver upon any exercise of this Warrant or the exercise
of any rights pursuant hereto.
(iii) If with respect to any Triggering Event, the Holder of this
Warrant has exercised its right as provided in clause (y) of
subparagraph (i) of this subsection (a) to sell this Warrant or a
portion thereof, the Issuer agrees that as a condition to the
consummation of any such Triggering Event the Issuer shall secure such
right of Holder to sell this Warrant to the Person continuing after or
surviving such Triggering Event and the Issuer shall not effect any such
Triggering Event unless upon or prior to the consummation thereof the
amounts of cash, property and/or Securities required under such clause
(y) are delivered to the Holder of this Warrant. The obligation of the
Issuer to secure such right of the Holder to sell this Warrant shall be
subject to such Holder's cooperation with the Issuer, including, without
limitation, the giving of customary representations and warranties to
the purchaser in connection with any such sale. Prior notice of any
Triggering Event shall be given to the Holder of this Warrant in
accordance with Section 11 hereof.
(b) SUBDIVISION OR COMBINATION OF SHARES. If the Issuer, at any time while
this Warrant is outstanding, shall subdivide or combine any shares of Common
Stock, (i) in case of subdivision of shares, the Warrant Price shall be
proportionately reduced (as the effective date of such subdivision or, if the
Issuer shall take a record of Holders of its Common Stock for the purpose of
so subdividing, as at the applicable record date, whichever is earlier) to
reflect the increase in the total number of shares of Common Stock
outstanding as a result of such subdivision, or (ii) in the case of a
combination of shares, the Warrant Price shall be proportionately increased
(as at the effective date of such combination or, if the Issuer shall take a
record of Holders of its Common Stock for the purpose of so combining, as at
the applicable record date, whichever is earlier) to reflect the reduction in
the total number of shares of Common Stock outstanding as a result of such
combination.
(c) CERTAIN DIVIDENDS AND DISTRIBUTIONS. If the Issuer, at any time
while this Warrant is outstanding, shall:
(i) STOCK DIVIDENDS. Pay a dividend in, or make any other
distribution to its stockholders (without consideration therefor) of,
shares of Common Stock, the Warrant Price shall be adjusted, as at the date
the Issuer shall take a record of the Holders of the Issuer's Capital Stock
for the purpose of receiving such dividend or other distribution (or if no
such record is taken, as at the date of such payment or other
distribution), to that price determined by multiplying the Warrant Price in
effect immediately prior to such record date (or if no such record is
taken, then immediately prior to such payment or other distribution), by a
fraction (1) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to such dividend or
distribution, and (2) the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such dividend or
distribution (plus in the event that the Issuer paid cash for fractional
shares, the number of additional shares which would have been outstanding
had the Issuer issued fractional shares in connection with said dividends);
or
(ii) OTHER DIVIDENDS. Pay a dividend on, or make any distribution of
its assets upon or with respect to (including, but not limited to, a
distribution of its property as a dividend in liquidation or partial
liquidation or by way of return of capital), the Common Stock (other than
as described in clause (i) of this subsection (c)), or in the event that
the Issuer shall offer options or rights to subscribe for shares of Common
Stock, or issue any Common Stock Equivalents, to all of its holders of
Common Stock, then on the record date for such payment, distribution or
offer or, in the absence of a record date, on the date of such payment,
distribution or offer, the Holder shall receive what the Holder would have
received had it exercised this Warrant in full immediately prior to the
record date of such payment, distribution or offer or, in the absence of a
record date, immediately prior to the date of such payment, distribution or
offer.
(d) OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION 4.
The following provisions shall be applicable to the making of adjustments in
the Warrant Price hereinbefore provided in Section 4:
(i) COMPUTATION OF CONSIDERATION. The consideration received by the
Issuer shall be deemed to be the following: to the extent that any
Additional Shares of Common Stock or any Common Stock Equivalents shall be
issued for a cash consideration, the consideration received by the Issuer
therefor, or if such Additional Shares of Common Stock or Common Stock
Equivalents are offered by the Issuer for subscription, the subscription
price, or, if such Additional Shares of Common Stock or Common Stock
Equivalents are sold to underwriters or dealers for public offering without
a subscription offering, the public offering price, in any such case
excluding any amounts paid or receivable for accrued interest or accrued
dividends and without deduction of any compensation, discounts,
commissions, or expenses paid or incurred by the Issuer for or in
connection with the underwriting thereof or otherwise in connection with
the issue thereof; to the extent that such issuance shall be for a
consideration other than cash, then, except as herein otherwise expressly
provided, the fair market value of such consideration at the, time of such
issuance as determined in good faith by the Board. The consideration for
any Additional Shares of Common Stock issuable pursuant to any Common Stock
Equivalents shall be the consideration received by the Issuer for issuing
such Common Stock Equivalents, plus the additional consideration payable to
the Issuer upon the exercise, conversion or exchange of such Common Stock
Equivalents. In case of the issuance at any time of any Additional Shares
of
Common Stock or Common Stock Equivalents in payment or satisfaction of any
dividend upon any class of Capital Stock of the Issuer other than Common
Stock, the Issuer shall be deemed to have received for such Additional
Shares of Common Stock or Common Stock Equivalents a consideration equal to
the amount of such dividend so paid or satisfied. In any case in which the
consideration to be received or paid shall be other than cash, the Board
shall notify the Holder of this Warrant of its determination of the fair
market value of such consideration prior to payment or accepting receipt
thereof. If, within thirty days after receipt of said notice, the Majority
Holders shall notify the Board in writing of their objection to such
determination, a determination of the fair market value of such
consideration shall be made by an Independent Appraiser selected by the
Majority Holders with the approval of the Board (which approval shall not
be unreasonably withheld), whose fees and expenses shall be paid by the
Issuer.
(ii) READJUSTMENT OF WARRANT PRICE. Upon the expiration or
termination of the right to convert, exchange or exercise any Common Stock
Equivalent the issuance of which effected an adjustment in the Warrant
Price, if such Common Stock Equivalent shall not have been converted,
exercised or exchanged in its entirety, the number of shares of Common
Stock deemed to be issued and outstanding by reason of the fact that they
were issuable upon conversion, exchange or exercise of any such Common
Stock Equivalent shall no longer be computed as set forth above, and the
Warrant Price shall forthwith be readjusted and thereafter be the price
which it would have been (but reflecting any other adjustments in the
Warrant Price made pursuant to the provisions of this Section 4 after the
issuance of such Common Stock Equivalent) had the adjustment of the Warrant
Price been made in accordance with the issuance or sale of the number of
Additional Shares of Common Stock actually issued upon conversion, exchange
or issuance of such Common Stock Equivalent and thereupon only the number
of Additional Shares of Common Stock actually so issued shall be deemed to
have been issued and only the consideration actually received by the Issuer
(computed as in clause (i) of this subsection (d)) shall be deemed to have
been received by the Issuer.
(iii) OUTSTANDING COMMON STOCK. The number of shares of Common
Stock at any time outstanding shall (A) not include any shares thereof then
directly or indirectly owned or held by or for the account of the Issuer or
any of its Subsidiaries, and (B) be deemed to include all shares of Common
Stock then issuable upon conversion, exercise or exchange of any then
outstanding Common Stock Equivalents or any other evidences of Indebtedness
(including, without limitation, dividends on the preferred stock), shares
of Capital Stock or other Securities which are or may be at any time
convertible into or exchangeable for shares of Common Stock or Other Common
Stock.
(e) OTHER ACTION AFFECTING COMMON STOCK. In case after the Original
Issue Date the Issuer shall take any action affecting its Common Stock, other
than an action described in any of the foregoing subsections (a) through (d)
of this Section 4, inclusive, and the failure to make any adjustment would
not fairly protect the purchase rights represented by this Warrant in
accordance with the essential intent and principle of this Section 4, then
the Warrant Price shall be adjusted in such manner and at such time as the
Board may in good faith determine to be equitable in the circumstances.
(f) ADJUSTMENT OF WARRANT SHARE NUMBER. Upon each adjustment in the
Warrant Price pursuant to any of the foregoing provisions of this Section 4,
the Warrant Share Number shall be adjusted, to the nearest one hundredth of a
whole share, to the product obtained by multiplying the Warrant Share Number
immediately prior to such adjustment in the Warrant Price by a fraction, the
numerator of which shall be the Warrant Price immediately before giving
effect to such adjustment and the denominator of which shall be the Warrant
Price immediately after giving effect to such adjustment.
If the Issuer shall be in default under any provision contained in Section 3
of this Warrant so that shares issued at the Warrant Price adjusted in
accordance with this Section 4 would not be validly issued, the adjustment of
the Warrant Share Number provided for in the foregoing sentence shall
nonetheless be made and the Holder of this Warrant shall be entitled to
purchase such greater number of shares at the lowest price at which such
shares may then be validly issued under applicable law. Such exercise shall
not constitute a waiver of any claim arising against the Issuer by reason of
its default under Section 3 of this Warrant.
(g) FORM OF WARRANT AFTER ADJUSTMENTS. The form of this Warrant need
not be changed because of any adjustments in the Warrant Price or the number
and kind of Securities purchasable upon the exercise of this Warrant.
5. NOTICE OF ADJUSTMENTS. Whenever the Warrant Price or Warrant Share
Number shall be adjusted pursuant to Section 4 hereof (for purposes of this
Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial
Officer to prepare and execute a certificate setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated (including a description of
the basis on which the Board made any determination hereunder), and the
Warrant Price and Warrant Share Number after giving effect to such
adjustment, and shall cause copies of such certificate to be delivered to the
Holder of this Warrant promptly after each adjustment. Any dispute between
the Issuer and the Holder of this Warrant with respect to the matters set
forth in such certificate may at the option of the Holder of this Warrant be
submitted to one of the national accounting firms currently known as the "big
four" selected by the Holder, PROVIDED that the Issuer shall have ten days
after receipt of notice from such Holder of its selection of such firm to
object thereto, in which case such Holder shall select another such firm and
the Issuer shall have no such right of objection. The firm selected by the
Holder of this Warrant as provided in the preceding sentence shall be
instructed to deliver a written opinion as to such matters to the Issuer and
such Holder within thirty days after submission to it of such dispute. Such
opinion shall be final and binding on the parties hereto. The fees and
expenses of such accounting firm shall be paid by the Issuer, unless the
Issuer prevailed in the dispute.
6. FRACTIONAL SHARES. No fractional shares of Warrant Stock will be
issued in connection with and exercise hereof, but in lieu of such fractional
shares, the Issuer shall make a cash payment therefor equal in amount to the
product of the applicable fraction multiplied by the Per Share Market Value
then in effect.
7. DEFINITIONS. For the purposes of this Warrant, the following terms
have the following meanings:
"Additional Shares of Common Stock" means all shares of Common Stock
issued by the Issuer after the Original Issue Date, and all shares of Other
Common, if any, issued by the Issuer after the Original Issue Date, except
(i) Warrant Stock and (ii) any shares of Common Stock issuable upon
exercise of the Stock Options.
"Articles of Incorporation" means the Articles of Incorporation of the
Issuer as in effect on the Original Issue Date and as hereafter from time
to time amended, modified, supplemented or restated in accordance with the
terms hereof and thereof and pursuant to applicable law.
"Board" shall mean the Board of Directors of the Issuer.
"Capital Stock" means and includes (i) any and all shares, interests,
participations or other equivalents of or interests in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or
limited) in any Person which is a partnership, (iii) all membership
interests or limited liability company interests in any limited liability
company, and (iv) all equity or ownership interests in any Person of any
other type.
"Common Stock" means the Common Stock, $0.001 par value, of the Issuer
and any other Capital Stock into which such stock may hereafter be changed.
"Common Stock Equivalent" means any Convertible Security or warrant,
option or other right to subscribe for or purchase any Additional Shares of
Common Stock or any Convertible Security.
"Convertible Securities" means evidences of Indebtedness, shares of
Capital Stock or other Securities which are or may be at any time
convertible into or exchangeable for Additional Shares of Common Stock. The
term "Convertible Security" means one of the Convertible Securities.
"Governmental Authority" means any governmental, regulatory or
self-regulatory entity, department, body, official, authority, commission,
board, agency or instrumentality, whether federal, state or local, and
whether domestic or foreign.
"Holders" mean the Persons who shall from time to time own any
Warrant. The term "Holder" means one of the Holders.
"Independent Appraiser" means a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Issuer) that is regularly engaged
in the business of appraising the Capital Stock or assets of corporations
or other entities as going concerns, and which is not affiliated with
either the Issuer or the Holder of any Warrant.
"Issuer" means Entertainment Boulevard, Inc., a Nevada corporation,
and its successors.
"Majority Holders" means at any time the Holders of Warrants
exercisable for a majority of the shares of Warrant Stock issuable under
the Warrants at the time outstanding.
"NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.
"Original Issue Date" means September 3, 1999.
"Other Common" means any other Capital Stock of the Issuer of any
class which shall be authorized at any time after the date of this Warrant
(other than Common Stock) and which shall have the right to participate in
the distribution of earnings and assets of the Issuer without limitation as
to amount.
"Person" means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.
"Per Share Market Value" means on any particular date (a) the closing
bid price per share of the Common Stock on such date on the OTC Bulletin
Board, the Nasdaq Small Cap Market, the Nasdaq National Market, or other
registered national stock exchange on which the Common Stock is then traded
or listed or if there is no such price on such date, then the closing bid
price on such exchange or quotation system on the date nearest preceding
such date, or (b) if the Common Stock is not traded or listed then on the
OTC Bulletin Board, the Nasdaq Small Cap Market, the Nasdaq National Market
or any registered national stock exchange, the closing bid price for a
share of Common Stock in the over-the-counter market, as reported by NASDAQ
or in the National Quotation Bureau Incorporated or similar organization or
agency succeeding to its functions of reporting prices) at the close of
business on such date, or (c) if the Common Stock is not then reported by
the National Quotation Bureau Incorporated (or similar organization or
agency succeeding to its functions of reporting prices), then the average
of the "Pink Sheet" quotes for the relevant conversion period, as
determined in good faith by the holder, or (d) if the Common Stock is not
then publicly traded the fair market value of a share of Common Stock as
determined by an Independent Appraiser selected in good faith by the
Majority Holders; PROVIDED, HOWEVER, that the Issuer, after receipt of the
determination by such Independent Appraiser, shall have the right to select
an additional Independent Appraiser, in which case, the fair market value
shall be equal to the average of the determinations by each such
Independent Appraiser; and PROVIDED, FURTHER that all determinations of the
Per Share Market Value shall be appropriately adjusted for any stock
dividends, stock splits or other similar transactions during such period.
The determination of fair market value by an Independent Appraiser shall be
based upon the fair market value of the Issuer determined on a going
concern basis as between a willing buyer and a willing seller and taking
into account all relevant factors determinative of value, and shall be
final and binding on all parties. In determining the fair market value of
any shares of Common Stock, no consideration shall be given to any
restrictions on transfer of the Common Stock imposed by agreement or by
federal or state securities laws, or to the existence or absence of, or any
limitations on, voting rights.
"Registration Rights Agreement" has the meaning specified in Section
3(f) hereof.
"Securities" means any debt or equity securities of the Issuer,
whether now or hereafter authorized, any instrument convertible into or
exchangeable for Securities or a Security, and any option, warrant or other
right to purchase or acquire any Security. "Security" means one of the
Securities.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute then in effect.
"Stock Options" means options to purchase up to 600,000 shares of
Common Stock issued by the Issuer shortly after the Original Issue Date to
directors, officers and employees of the Issuer and consultants providing
services to the Issuer, as the same may from time to time be amended,
modified or supplemented in accordance with their terms.
"Subsidiary" means any corporation at least 50% of whose outstanding
Voting Stock shall at the time be owned directly or indirectly by the
Issuer or by one or more of its Subsidiaries, or by the Issuer and one or
more of its Subsidiaries.
"Trading Day" means (a) a day on which the Common Stock is traded on
the OTC Bulletin Board, the Nasdaq Small Cap Market, the Nasdaq National
Market or other registered
national stock exchange on which the Common stock has been traded or
listed, or (b) if the Common Stock is not traded or listed on the OTC
Bulletin Board, the Nasdaq Small Cap Market, the Nasdaq National Market or
any registered national stock exchange, a day or which the Common Stock is
traded in the over-the-counter market, as reported by the OTC Bulletin
Board, or (c) if the Common Stock is not quoted on the OTC Bulletin Board,
a day on which the Common Stock is quoted in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding its functions of reporting prices);
PROVIDED, HOWEVER, that in the event that the Common Stock is not listed or
quoted as set forth in (a), (b) and (c) hereof, then Trading Day shall mean
any day except Saturday, Sunday and any day which shall be a legal holiday
or a day on which banking institutions in the State of New York are
authorized or required by law or other government action to close.
"Term" has the meaning specified in Section 1 hereof.
"Voting Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) having
ordinary voting power for the election of a majority of the members of the
Board of Directors (or other governing body) of such corporation, other
than Capital Stock having such power only by reason of the happening of a
contingency.
"Warrants" means the Warrants issued and sold pursuant to the
Securities Purchase Agreement, including, without limitation, this Warrant,
and any other warrants of like tenor issued in substitution or exchange for
any thereof pursuant to the provisions of Section 2(c) or 2(e) hereof or of
any of such other Warrants.
"Warrant Price" means initially an amount equal to 100% of the average
of the Per Share Market Value on the five trading days prior to the Initial
Closing Date, as such price may be adjusted from time to time as shall
result from the adjustments specified in Section 4 hereof.
"Warrant Share Number" means at any time the aggregate number of
shares of Warrant Stock which may at such time be purchased upon exercise
of this Warrant, after giving effect to all prior adjustments and increases
to such number made or required to be made under the terms hereof.
"Warrant Stock" means Common Stock issuable upon exercise of any
Warrant or Warrants or otherwise issuable pursuant to any Warrant or
Warrants.
8. OTHER NOTICES. In case at any time:
(A) the Issuer shall make any distributions to the
holders of Common Stock; or
(B) the Issuer shall authorize the granting to all
holders of its Common Stock of rights to subscribe
for or purchase any shares of Capital Stock of any
class or of any Common Stock Equivalents or
Convertible Securities or other rights; or
(C) there shall be any reclassification of the Capital
Stock of the Issuer; or
(D) there shall be any capital reorganization by the
Issuer; or
(E) there shall be any (i) consolidation or merger
involving the Issuer or (ii) sale, transfer or
other disposition of all or substantially all of
the Issuer's property, assets or business (except
a merger or other reorganization in which the
Issuer shall be the surviving corporation and its
shares of Capital Stock shall continue to be
outstanding and unchanged and except a
consolidation, merger, sale, transfer or other
disposition involving a wholly-owned Subsidiary);
or
(F) there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of the
Issuer or any partial liquidation of the issuer or
distribution to holders of Common Stock;
then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
days prior to the action in question and not less than twenty days prior to the
record date or the date on which the Issuer's transfer books are closed in
respect thereto. The Issuer shall give to the Holder notice of all meetings and
actions by written consent of its stockholders, at the same time in the same
manner as notice of any meetings of stockholders is required to be given to
stockholders who do not waive such notice (or, if such requires no notice, then
two Trading Days written notice thereof describing the matters upon which action
is to be taken). The Holder shall have the right to send two representatives
selected by it to each meeting, who shall be permitted to attend, but not vote
at, such meeting and any adjournments thereof. This Warrant entitles the Holder
to receive copies of all financial and other information distributed or required
to be distributed to the holders of the Common Stock.
9. AMENDMENT AND WAIVER. Any term, covenant, agreement or condition in
this Warrant may be amended, or compliance therewith may be waived (either
generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written instruments executed by
the Issuer and the Majority Holders; PROVIDED, HOWEVER, that no such
amendment or waiver shall reduce the Warrant Share number, increase the
Warrant Price, shorten the period during which this Warrant may be exercised
or modify any provision of this Section 9 without the consent of the Holder
of this Warrant.
10. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
11. NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earlier of (i) the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., New York City time,
on a Business Day, (ii) the Business Day after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice later than 5:00 p.m., New York City
time, on any
date and earlier than 11:59 p.m., New York City time, on such date, (iii) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be
with respect to the Holder of this Warrant or of Warrant Stock issued pursuant
hereto, addressed to such Holder at its last known address or facsimile number
appearing on the books of the Issuer maintained for such purposes, or with
respect to the Issuer, addressed to:
Entertainment Boulevard, Inc.
0000 Xxx Xxx Xxxxxx - Xxxxx 000
Xxxxxx Xxx Xxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxx
Telephone No.: (000)000-0000
Facsimile No.: (000)000-0000
or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Holder shall be sent to Stroock &
Stroock & Xxxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention:
Xxxxx X. Xxxxx, Esq., facsimile no.: (000)000-0000. Copies of notices to the
Issuer shall be sent to Xxxxxxx, Xxxxxxxx, Xxxx, Xxxxxxxx & Xxxxxxxx, 0000
Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxxx X. Xxxxxxxx, Esq., facsimile no.: (000)000-0000.
12. WARRANT AGENT. The Issuer may, by written notice to each Holder of
this Warrant, appoint an agent having an office in New York, New York for the
purpose of issuing shares of Warrant Stock on the exercise of this Warrant
pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant pursuant
to subsection (e) of Section 2 hereof or replacing this Warrant pursuant to
subsection (e) of Section 3 hereof, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at
such office by such agent.
13. REMEDIES. The Issuer stipulates that the remedies at law of the
Holder of this Warrant in the event of any default or threatened default by the
Issuer in the performance of or compliance with any of the terms of this Warrant
are not and will not be adequate and that, to the fullest extent permitted by
law, such terms may be specifically enforced by a decree for the specific
performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.
14. SUCCESSORS AND ASSIGNS. This Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors and
assigns of the Issuer, the Holder hereof and (to the extent provided herein) the
Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any
such Holder or Holder of Warrant Stock.
15. MODIFICATION AND SEVERABILITY. If, in any action before any court
or agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
16. HEADINGS. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day
and year first above written.
ENTERTAINMENT BOULEVARD, INC.
By: /s/ Xxxxxxx Xxxxx
---------------------
Name: Xxxxxxx Xxxxx
Title: Chief Executive Officer
EXERCISE FORM
ENTERTAINMENT BOULEVARD, INC.
The undersigned _____________, pursuant to the provisions of the within
Warrant, hereby elects to purchase _____ shares of Common Stock of
ENTERTAINMENT BOULEVARD, INC. covered by the within Warrant.
Dated:________________ Signature _______________________
Address ___________________
___________________
ASSIGNMENT
FOR VALUE RECEIVED, ________________ hereby sells, assigns and transfers unto
______________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _______________, attorney, to transfer the
said Warrant on the books of the within named corporation.
Dated:________________ Signature _______________________
Address ___________________
___________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED, ________________ hereby sells, assigns and transfers unto
______________ the right to purchase _______ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and
does irrevocably constitute and appoint _______________, attorney, to
transfer that part of the said Warrant on the books of the within named
corporation.
Dated:________________ Signature _______________________
Address ___________________
___________________
FOR USE BY THE ISSUER ONLY:
This Warrant No. W-_____ canceled (or transferred or exchanged) this _____
day of ____________, ______, shares of Common Stock issued therefor in the
name of _____________. Warrant No. W-_____ issued for ____ shares of Common
Stock in the name of ________________.
