EXHIBIT 10.5
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR SALE
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER
SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE AVAILABILITY OF AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
CLASS A COMMON STOCK SUBSCRIPTION WARRANT
TO PURCHASE SHARES OF COMMON STOCK OF
VICTORY ENTERTAINMENT CORP., A FLORIDA CORPORATION
(THE "COMPANY")
DATE OF INITIAL ISSUANCE: JULY 1, 1999
THIS CERTIFIES THAT, for value received, (the "Holder") is entitled
to purchase from the Company during the Term of this Warrant at the times
provided for herein, the number of shares of Common Stock, par value $0.001 per
share, of the Company (the "Common Stock") as specified herein, at the Warrant
Price (as hereinafter defined), payable in the manner specified herein. The
conversion of this Warrant shall be subject to the provisions, limitations and
restrictions herein contained.
SECTION 1. DEFINITIONS.
COMMON STOCK - shall mean and include the Company's authorized Common
Stock, par value $0.001 per share, as constituted at the date hereof, and shall
also include any capital stock of any class of the Company hereafter authorized
which has the right to participate in the distribution of earnings and assets of
the Company without limit to amount or percentage.
SECURITIES ACT - the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
TERM OF THIS WARRANT - shall mean the two-year period beginning on July 1,
1999 and ending upon the expiration of 2 years for the date of issuance. (the
"Expiration Date").
WARRANT PRICE - is defined in Section 2.1 hereof.
WARRANT RIGHTS - the rights of the Holder to purchase shares of Common
Stock upon conversion of this Warrant, which rights shall not relate to shares
of Common Stock already purchased pursuant to this Warrant.
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WARRANT SHARES - shares of Common Stock purchased or purchasable by the
Holder of this Warrant upon the conversion hereof.
SECTION 2. EXERCISE OF WARRANT
2.1. RIGHT TO EXERCISE WARRANT. At any time, and from time to time during
the term of this Warrant, the Holder hereof shall have the right to convert this
Warrant, in whole or in part to purchase of Common Stock. If the Expiration Date
is a day on which banking institutions are authorized by law to close, then this
Warrant may be exercised on the next succeeding day that is not such a day in
accordance with the terms hereof
The Warrant Price shall be $7.00 per share and shall be paid in cash.
2.2. Upon conversion of this Warrant in accordance with this Section 2, the
registered holder hereof shall be entitled to receive a certificate for the
number of Warrant Shares determined in accordance with the foregoing.
2.3. TRANSFER AND RESTRICTION LEGEND. Subject to compliance with the
provisions of this Section 2.3 and the Private Placement Memorandum of
Lightpoint Entertainment, Inc., a subsidiary of the Company, dated July 13,
1998, (the "PPM"), this Warrant is freely transferable by the Holder, except as
transferability may be limited by federal and state securities laws. This
Warrant is separately detachable from the shares of Common Stock included with
this Warrant in the units purchased by the Holder, and Holder may transfer all
or any portion of this Warrant to a third party without transferring an
equivalent number of shares to such third party. Each certificate for Warrant
Shares shall bear the following legend (and any additional legend required by
(i) any applicable state securities laws and (ii) any securities exchange upon
which such Warrant Shares may, at the time of such exercise, be listed) on the
face thereof unless at the time of exercise such Warrant Shares shall be
registered under the Securities Act:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THE TRANSFER
OF THESE SECURITIES IS SUBJECT TO THE RIGHT OF FIRST REFUSAL OF THE
COMPANY."
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Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution under a registration statement of the securities
represented thereby) shall also bear such legend unless, in the opinion of
counsel for the holder thereof (which counsel shall be reasonably satisfactory
to counsel for the Company) the securities represented thereby are not, at such
time, required by law to bear such legend.
SECTION 3. COVENANTS AS TO COMMON STOCK. The Company covenants and agrees
that all Common Stock that may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance and receipt by the Company of
the Warrant Price, be validly issued, fully paid and nonassessable, and free
from all taxes, liens and charges with respect to the issue thereof. The Company
further covenants and agrees that it will pay when due and payable any and all
federal and state taxes which may be payable in respect of the issue of this
Warrant, or any Warrant Shares or certificates therefor issuable upon the
exercise of this Warrant. The Company further covenants and agrees that the
Company will at all times have authorized and reserved, free from preemptive
rights, a sufficient number of shares of Common Stock to provide for the
exercise of the rights represented by this Warrant.
SECTION 4. OWNERSHIP.
4.1. OWNERSHIP OF THIS WARRANT. The Company may deem and treat the person
in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary until presentation of this Warrant for registration or transfer
as provided in this Section 4.
4.2. TRANSFER AND REPLACEMENT. This Warrant and all rights hereunder are
subject to applicable federal and state securities laws, and subject to
compliance with the provisions contained in Section 2.3 hereof and the PPM, and
transferable in whole or in part upon the books of the Company by the Holder
hereof in person or by duly authorized attorney, and a new Warrant or Warrants,
of the same tenor as this Warrant but registered in the name of the transferee
or transferees shall be made and delivered by the Company upon compliance with
the provisions of Section 2.3 hereof and the PPM, and upon surrender of this
Warrant duly endorsed. The Company shall not be obligated to effect any transfer
of this Warrant or register such transfer, if such transfer is not made in
compliance with the provisions of Section 2.3 hereof and the PPM. Upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft or
destruction, and, in such case, of indemnity or security reasonably satisfactory
to it, and upon surrender of this Warrant if mutilated, the Company will make
and deliver a new Warrant of like tenor, in lieu of this Warrant; provided that
if the Holder hereof is an instrumentality of a state or local government or an
institutional holder or a nominee for such an instrumentality or institutional
holder, an irrevocable agreement of indemnity by such
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Holder shall be sufficient for all purposes of this Section 4, and no evidence
of loss or theft or destruction shall be necessary. This Warrant shall be
promptly canceled by the Company upon the surrender hereof in connection with
any transfer or replacement. Except as otherwise provided above, in the case of
the loss, theft or destruction of a Warrant, the Company shall pay all expenses,
taxes and other charges payable in connection with any transfer or replacement
of this Warrant, other than stock transfer taxes (if any) payable in connection
with a transfer of this Warrant, which shall be payable by the Holder.
SECTION 5. REDEMPTION OF WARRANTS. This Warrant is subject to redemption by
the Company, at any time, at the Company's sole option. The redemption price
shall be ten cents ($.10) for each share this Warrant is convertible into. The
Company shall give the Holder thirty (30) days written notice of its intention
to redeem this Warrant.
SECTION 6. NOTICE OF EXTRAORDINARY DIVIDENDS. If the Board of Directors of
the Company shall declare any dividend or other distribution on its Common Stock
except out of earned surplus or by way of a stock dividend payable in shares of
its Common Stock, the Company shall mail notice thereof to the Holder hereof not
less than ten (10) days prior to the record date fixed for determining
shareholders entitled to participate in such dividend or other distribution, and
the Holder hereof shall not participate in such dividend or other distribution
unless this Warrant may be converted, in whole or in part, pursuant to Section
2.1 of this Warrant, and is converted prior to such record date. The provisions
of this Section 7 shall not apply to distributions made in connection with
transactions covered by Section 5.
SECTION 7. FRACTIONAL SHARES. Fractional shares shall not be issued upon
the conversion of this Warrant but in any case where the Holder would, except
for the provisions of this Section 8, be entitled under the terms hereof to
receive a fractional share upon the conversion of this Warrant, the Company
shall, upon the conversion of this Warrant, pay a sum in cash equal to the
excess of the value of such fractional share (determined in such reasonable
manner as may be prescribed in good faith by the Board of Directors of the
Company).
SECTION 8. NOTICES. Any notice or other document required or permitted to
be given or delivered to the Holder or the Company shall be effected on the
seventh day following delivery to the United States Post Office, proper postage
prepaid, sent by certified or registered mail return receipt requested, or on
the day delivered by hand and receipted, or on the second business day after
delivery to a recognized overnight courier service, addressed to the Holder at
the address thereof specified in the records of the Company or to such other
address as shall have been furnished to the Company in writing by the Holder or
the Company at 0000 Xxxxxxxxx Xxxxxxx Xxxxx, Xxxxxxxx 00X, Xxxxxxx, Xxxxxxx
00000 or to such other address as shall have been furnished in writing to the
Holder by the Company.
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SECTION 9. NO RIGHTS AS STOCKHOLDER; LIMITATION OF LIABILITY. This Warrant
shall not entitle the Holder to any of the rights of a shareholder of the
Company. No provision hereof, in the absence of affirmative action by the Holder
to purchase shares of Common Stock, and no mere enumeration herein of the rights
or privileges of the Holder, shall give rise to any liability of the Holder for
the Warrant Price hereunder or as a shareholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.
SECTION 10. LAW GOVERNING. This Warrant shall be governed by, and construed
and enforced in accordance with, the internal laws of the State of New York
without regard to the principles of the conflict of laws thereof.
SECTION 11. NO THIRD PARTY BENEFICIARY. Nothing herein expressed or implied
is intended to or shall be construed to confer upon or give to any person,
corporation, group or entity (of any nature) other than the parties hereto,
their respective successors or permitted assigns, any rights, remedies or
obligations under or by reason of this Warrant.
SECTION 12. MISCELLANEOUS. The headings in this Warrant are for purposes of
reference only and shall not affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer this day of 1999.
VICTORY ENTERTAINMENT CORP.
By:
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[FORM NOTICE OF CONVERSION]
TO BE EXECUTED BY THE REGISTERED HOLDER IF
SUCH HOLDER DESIRES TO CONVERT THE WARRANT
To________________________________ :
The undersigned hereby irrevocably elects to convert the Warrant to
purchase______ shares of Common Stock issuable upon the conversion of such
Warrant and requests that Certificate for such shares be issued in the name of:
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(Please print name and address)
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(Please insert social security or other identifying number)
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(Please insert number of shares exercised)
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Please insert Warrant Price Paid
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(Please specify whether payment is in cash or Notes)
If such number of Warrant shall not be all the Warrant evidenced by the
accompanying Warrant, a new Warrant for the balance remaining of such Warrant
shall be registered in the name of and delivered to:
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(Please print name and address)
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(Please insert social security or other identifying number)
Dated: ___________________, _______.
[HOLDER]
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By:
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