EXHIBIT 10.5
THIS WARRANT AND THE SHARES OF COMMON STOCK THAT ARE ISSUABLE UPON EXERCISE OF
THE WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE TRANSFERRED
UNLESS SUCH TRANSFER IS REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR UNLESS THE CORPORATION
RECEIVES AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO IT TO THE
EFFECT THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
WARRANT TO PURCHASE 50,000 SHARES OF COMMON STOCK
REPRESENTATIVE'S WARRANT
Dated: _________, 2002
THIS CERTIFIES THAT ____________________ (herein sometimes called the
"Holder" or the "Representative") is entitled to purchase from INTRA-ASIA
ENTERTAINMENT CORPORATION, a Delaware corporation (the "Company"), at the price
and during the period as hereinafter specified, up to 50,000 shares (the
"Shares") of common stock, $0.001 par value per share (the "Common Stock"), at a
purchase price of $____ per share (165% of the initial public offering price),
subject to adjustment as described below, at any time during the four-year
period commencing one (1) year from the effective date of the Registration
Statement (as defined herein) (the "Effective Date").
This Representative's Warrant (the "Representative's Warrant") is issued
pursuant to an Underwriting Agreement among the Company and WESTPARK CAPITAL,
INC. and I-BANKERS SECURITIES, INC. (the "Underwriting Agreement"), as
Representatives of the several Underwriters set forth in Schedule I to said
Underwriting Agreement, in connection with a public offering, through the
Representatives, of 1,000,000 shares of Common Stock as therein described (and
up to 150,000 additional shares of Common Stock covered by an over-allotment
option granted by the Company to the Underwriters), and in consideration of
$_____ received by the Company for this Representative's Warrant. Except as
specifically otherwise provided herein, the Shares issued pursuant to this
Representative's Warrant shall bear the same terms and conditions as described
under the caption "Description of Capital Stock" in the Registration Statement
on Form S-1, File No. 333-74334, as amended (the "Registration Statement"),
except that the Holder shall have registration rights under the Securities Act
of 1933, as amended (the "Act"), for the Shares issuable pursuant to this
Representative's Warrant as more fully described in paragraph 6 herein.
Pursuant to the Underwriting Agreement, the Company has concurrently
herewith issued to _________________ a warrant (the "Second Representative's
Warrant") to purchase from the Company up to 50,000 shares (the "Second
Representative's Shares") of Common Stock at a purchase price of $____ per share
(165% of the initial public offering price), subject to adjustment as described
therein, at any time during the four-year period commencing one (1) year from
the Effective Date.
1. The rights represented by this Representative's Warrant shall be
exercised at the price set forth in the first paragraph hereof subject to
adjustment in accordance with paragraph 8 hereof (the "Exercise Price"), and
during the periods as follows:
(a) During the period from the Effective Date to and through
_________, 2003 (the "First Anniversary Date"), inclusive, the Holder shall have
no right to purchase any Shares hereunder.
(b) At any time and from time to time between ___________, 2003
and ___________, 2007, (the expiration of five (5) years from the Effective
Date, i.e. the "Expiration Date") inclusive, the Holder shall have the right to
purchase Shares hereunder at the Exercise Price.
(c) After the Expiration Date, the Holder shall have no right to
purchase all or any portion of the Shares hereunder.
2. (a) The rights represented by this Representative's Warrant may be
exercised at any time within the periods above specified, in whole or in part,
by (i) the surrender of this Representative's Warrant (with the purchase form at
the end hereof properly executed) at the principal executive office of the
Company (or such other office or agency of the Company as it may designate by
notice in writing to the Holder at the address of the Holder appearing on the
books of the Company); (ii) payment to the Company of the exercise price then in
effect for the number of Shares specified in the above-mentioned purchase form
together with applicable stock transfer taxes, if any; and (iii) delivery to the
Company of a duly executed agreement signed by the person(s) designated in the
purchase form to the effect that such person(s) agree(s) to be bound by the
provisions of paragraph 6 and subparagraphs (b), (c) and (d) of paragraph 7
hereof. This Representative's Warrant shall be deemed to have been exercised, in
whole or in part to the extent specified, immediately prior to the close of
business on the date this Representative's Warrant is surrendered and payment is
made in accordance with the foregoing provisions of this paragraph 2, and the
person or persons in whose name or names the certificates for the Shares shall
be issuable upon such exercise shall become the holder or holders of record of
such Shares at that time and date. The Shares and the certificates for the
Shares so purchased shall be delivered to the Holder within a reasonable time,
not exceeding ten (10) business days, after the rights represented by this
Representative's Warrant shall have been so exercised. The Company shall not be
required to issue fractional Shares on exercise of this Representative's
Warrant, and this Representative's Warrant may not be exercised for fewer than
100 Shares unless fewer than 100 Shares remain subject to this Representative's
Warrant, in which case it must be exercised in full.
(a) Notwithstanding anything to the contrary contained in
paragraph 2(a), the Holder may elect to exercise this Representative's Warrant
in whole or in part on a "cashless exercise basis" by receiving Shares equal to
the value (as determined below) of this Representative's Warrant, or any part
hereof, upon surrender of the Representative's Warrant at the principal office
of the Company together with notice of such election in which event the Company
shall issue to the Holder a number of Shares computed using the following
formula:
2
X = Y(A-B)
------
A
Where
X = the number of Shares to be issued to the Holder;
Y = the number of Shares issuable upon exercise of this Representative's
Warrant;
A = the current fair market value of one share of Common Stock;
B = the Exercise Price of the Representative's Warrant;
As used herein, current fair market value of Common Stock shall mean
with respect to each share of Common Stock the average of the closing prices of
the Common Stock sold on the principal national securities exchanges on which
the Common Stock is at the time admitted to trading or listed, or, if there have
been no sales on any such exchange on such day, the average of the highest bid
and lowest ask price on such day as reported by American Stock Exchange, or any
similar organization if the American Stock Exchange is no longer reporting such
information, either (i) on the date which the form of election is deemed to have
been sent to the Company (the "Notice Date") or (ii) over a period of five (5)
trading days preceding the Notice Date, whichever of (i) or (ii) is greater. If
on the date for which current fair market value is to be determined the Common
Stock is not listed on any securities exchange or quoted in the American Stock
Exchange or the over-the-counter market, the current fair market value of Common
Stock shall be the highest price per share which the Company could then obtain
from a willing buyer (not a current employee or director) for shares of Common
Stock sold by the Company, from authorized but unissued shares, as determined in
good faith by the Board of Directors of the Company, unless prior to such date
the Company has become subject to a binding agreement for a merger, acquisition
or other consolidation pursuant to which the Company is not the surviving party,
in which case the current fair market value of the Common Stock shall be deemed
to be the value to be received by the holders of the Common Stock for each share
thereof pursuant to the Company's acquisition.
3. This Representative's Warrant shall not be sold, assigned,
hypothecated or otherwise transferred for a period of one year commencing on the
Effective Date except that it may be transferred (i) to a successor of the
Holder by merger or consolidation, and may be assigned in whole or in part to
any person who is an officer of the Holder or to any members of the selling
group and/or the officers or partners thereof during such period and (ii) to any
member of the underwriting syndicate. This Representative's Warrant must be
executed immediately upon its transfer at any time after one year from the
Effective Date, and if not so executed, shall lapse. Any such assignment shall
be effected by the Holder by (i) executing the form of assignment at the end
hereof and (ii) delivering the assignment to the Company (with the signature of
the transferee on the assignment agreeing to be bound by this Representative's
Warrant) and surrendering this Representative's Warrant for cancellation at the
office or agency of the Company referred to in paragraph 2 hereof, accompanied
by a signed certificate (signed by an officer of the Holder if the Holder is a
corporation) stating that each transferee is a permitted transferee under this
paragraph 3; whereupon the Company shall issue, in the name or names
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specified by the Holder (including the Holder), a new Representative's Warrant
or Warrants of like tenor and representing in the aggregate rights to purchase
the same number of Shares as are purchasable hereunder at such time. Any such
transferee shall be bound by all of the terms and conditions of this
Representative's Warrant and, unless the context indicates otherwise, the term
Holder as used herein shall apply to such permitted transferee. Notwithstanding
anything to the contrary herein, the Holder (including any transferee)
represents and warrants to, and agrees with, the Company that neither this
Representative's Warrant nor any of the Shares will be sold, assigned,
hypothecated or otherwise transferred by such Holder or transferee unless such
transaction is registered and qualified under applicable federal and state
securities laws or unless such transaction is exempt from registration and
qualification. The Company shall not be obligated to register any such transfer
on its books unless it receives satisfactory evidence that such transfer has
been registered and qualified under applicable federal and state securities laws
or is exempt from such registration and qualification. Each certificate
evidencing Shares shall bear a restrictive legend that is substantially similar
to the legend at the forepart of this Representative's Warrant unless such
Shares are issued pursuant to an effective registration statement under the Act
or, in the opinion of counsel to the Company, such legend is not required under
applicable securities laws.
4. The Company covenants and agrees that all Shares which may be
purchased hereunder will, upon issuance and delivery against payment therefor of
the requisite purchase price, be duly and validly issued, fully paid and
nonassessable. The Company further covenants and agrees that, during the periods
within which this Representative's Warrant may be exercised, the Company will at
all times have authorized and reserved a sufficient number of shares of its
Common Stock to provide for the exercise of this Representative's Warrant.
5. This Representative's Warrant shall not entitle the Holder to any
voting rights or other rights, including, without limitation, notice of meetings
or other actions or receipt of dividends, as a stockholder of the Company.
6. (a) The Company shall advise the Holder (including its permitted
transferees), whether the Holder holds this Representative's Warrant or has
exercised this Representative's Warrant and holds Shares, by written notice at
least four weeks prior to the filing of any new registration statement under the
Act, or the filing of a notification on Form 1-A under the Act for a public
offering of securities, covering any securities of the Company, for its own
account or for the account of others, except for any registration statement
filed on Form S-4 or S-8 (or other comparable or successor form) and except for
any other registration statement on a form that does not include substantially
the same information as would be required to be included in a registration
statement filed under paragraph 6(b), and will, during the four (4) year period
beginning one (1) year after the Effective Date, upon the request of the Holder
received in writing by the Company within ten (10) days after delivery of the
Company's notice, include in any such new registration statement (or
notification as the case may be) such information as may be required to permit a
public offering of all or any of the Shares underlying this Representative's
Warrant, including Shares previously issued thereunder (the "Registrable
Securities"). The delivery by the Holder of any such notice shall not constitute
a demand made pursuant to paragraph 6(b). The Company shall supply prospectuses
and such other documents as the Holder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Securities,
use its reasonable efforts to register and qualify any of the Registrable
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Securities for sale in such states (i) as such Holder designates and (ii) with
respect to which the Company obtained a qualification in connection with its
initial public offering; and do any and all other acts and things which may be
necessary or reasonably desirable to enable such Holder to consummate the public
sale or other disposition of the Registrable Securities, all at no expense to
the Holder or the Representative (other than sales commissions, underwriting or
brokerage discounts or commissions, or other expenses of such sale, and other
than the fees and expenses of counsel and other advisers retained by the
Holder), and furnish indemnification in the manner provided in paragraph 7
hereof. The Holder shall furnish information and indemnification as set forth in
paragraph 7.
(b) At any time during the four (4) year period beginning one
(1) year after the Effective Date, a 50% Holder (as defined below) may request,
on one (but only one) occasion, that the Company register under the Act any and
all of the Registrable Securities held by such 50% Holder, at the Company's
expense. Upon the receipt of any such notice, the Company will promptly, but no
later than sixty (60) days after receipt of such notice, file a post-effective
amendment to the current Registration Statement or a new registration statement
pursuant to the Act so that such designated Registrable Securities may be
publicly sold under the Act as promptly as practicable thereafter and the
Company will use reasonable efforts to cause such registration to become and
remain effective (including the taking of such reasonable steps as are necessary
to obtain the removal of any stop order) within 120 days after the receipt of
such notice, provided, that such Holder shall furnish the Company with
appropriate information in connection therewith as the Company may reasonably
request in writing. The 50% Holder may, at its option, request the registration
of any of the Shares underlying this Representative's Warrant in a registration
statement made by the Company as contemplated by paragraph 6(a) or in connection
with a request made pursuant to this paragraph 6(b) prior to acquisition of the
Shares issuable upon exercise of this Representative's Warrant. The 50% Holder
may, at its option, request such registration statement during the described
period with respect to the Shares and such registration rights may be exercised
by the 50% Holder prior to or subsequent to the exercise of this
Representative's Warrant. Within ten days after receiving any such notice
pursuant to this paragraph 6(b), the Company shall give notice to any other
Holders of this Representative's Warrant and to the holder(s) of the Second
Representative's Warrant, advising that the Company is proceeding with such
registration statement and offering to include therein the Shares underlying
that part of this Representative's Warrant held by the other Holders and Second
Representative's Shares, provided that they shall furnish the Company with such
appropriate information (relating to the intentions of such Holders and the
holders of the Second Representative's Warrant) in connection therewith as the
Company shall reasonably request in writing. All costs and expenses of the
post-effective amendment or a new registration statement shall be borne by the
Company, except that the Holder(s) shall bear the fees of their own counsel and
any other advisors retained by them and any underwriting or brokerage discounts
or commissions applicable to any of the securities sold by them. The Company
will use its reasonable efforts to maintain such registration statement current
under the Act for a period of at least 270 days from the effective date thereof.
The Company shall supply prospectuses, and such other documents as the Holder(s)
may reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities, use its reasonable efforts to
register and qualify any of the Registrable Securities for sale in such states
(i) as such Holder(s) designate and (ii) with respect to which the Company
obtained a qualification in connection with its initial public offering and
furnish indemnification in the manner provided in paragraph 7 hereof.
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Notwithstanding the foregoing, (i) the Company shall not be required to file or
include in any registration statement under paragraph 6(a) or 6(b) any
Registrable Securities which in the opinion of counsel to the Company (which
opinion is reasonably acceptable to counsel to the Representative) would be
saleable immediately without restriction under Rule 144 (or its successor) if
this Representative's Warrant has been exercised or remains subject to being
exercised pursuant to paragraph 2(b) herein, and (ii) the Company shall not be
required to file a registration statement under this paragraph (b) unless at
least fifty percent (50%) of the aggregate number of shares of Common Stock
underlying this Representative's Warrant and the Second Representative's Warrant
(including previously issued shares pursuant thereto) are included in such
registration statement.
(c) The term "50% Holder" as used in this paragraph 6 shall mean
the holder(s) of at least 50% of the aggregate number of (i) Shares underlying
(or previously issued pursuant to) this Representative's Warrant and (ii) Second
Representative's Shares underlying (or previously issued pursuant to) the Second
Representative's Warrant. The exercise of a demand registration right under the
Second Representative's Warrant shall be deemed to constitute the exercise of
the one demand registration right that is permitted under paragraph 6(b) of this
Representative's Warrant, and no further exercise of a registration right under
paragraph 6(b) of this Representative's Warrant shall be permitted (unless the
Company fails to provide the notice to the Holder (and permitted transferees) as
required by paragraph 6(a)).
(d) Notwithstanding anything to the contrary in this
Representative's Warrant, no Holder shall be entitled to exercise any
registration right provided for in this paragraph 6 after the earlier to occur
of the fifth anniversary of the Effective Date or such time as Rule 144 under
the Act or another similar exemption under the Act is available for the sale of
all of such Xxxxxx's Shares (including Shares issuable upon exercise of this
Representative's Warrant) during a three-month period without registration under
the Act.
(e) Notwithstanding anything to the contrary in this
Representative's Warrant, in connection with any offering involving an
underwriting of the Company's securities, the Company shall not be required
under paragraph 6(a) to include any of the Holder's Shares in such underwriting
unless the Holder accepts the terms of the underwriting as agreed upon between
the Company and the underwriters, and then only in such quantity as the
underwriters determine in their sole discretion will not jeopardize the success
of the offering by the Company. If the total amount of securities, including
Registrable Securities, requested by stockholders to be included in such
offering exceeds the amount of securities sold other than by the Company that
the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable Securities,
which the underwriters determine in their sole discretion will not jeopardize
the success of the offering (the securities so included to be apportioned pro
rata among the selling stockholders according to the total amount of securities
entitled to be included therein owned by each selling stockholder or in such
other proportions as shall mutually be agreed to by such selling stockholders).
(f) Notwithstanding anything to the contrary in this
Representative's Warrant, if the Company shall furnish to the 50% Holder
requesting a registration statement pursuant to paragraph (b) a certificate
signed by the Chief Executive Officer of the Company stating that in
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the good faith judgment of the Board of Directors of the Company it would be
seriously detrimental to the Company and its stockholders for such registration
statement to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer taking action
with respect to such filing for a period of not more than forty-five (45) days
after receipt of the request of the 50% Holder.
7. (a) Whenever pursuant to paragraph 6 a registration statement
relating to any Shares issued upon exercise of this Representative's Warrant is
filed under the Act, amended or supplemented, the Company will indemnify and
hold harmless each Holder of the securities covered by such registration
statement, amendment or supplement (such Holder being hereinafter called the
"Distributing Holder"), and each person, if any, who controls (within the
meaning of the Act) the Distributing Holder, and each underwriter (within the
meaning of the Act) of such securities and each person, if any, who controls
(within the meaning of the Act) any such underwriter, against any losses,
claims, damages or liabilities, joint or several, to which the Distributing
Holder, any such controlling person or any such underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities, or actions in respect thereof, arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any such registration statement as declared effective or any final prospectus
constituting a part thereof or any amendment or supplement thereto, or arise out
of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading and, subject to paragraph 7(d), will reimburse the
Distributing Holder or such controlling person or underwriter for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
said registration statement, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information furnished
by such Distributing Holder or any other Distributing Holder for use in the
preparation thereof.
(b) The Distributing Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed said
registration statement and such amendments and supplements thereto, and each
person, if any, who controls the Company (within the meaning of the Act) against
any losses, claims, damages or liabilities, joint or several, to which the
Company or any such director, officer or controlling person may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities, or actions in respect thereof, arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in said
registration statement, said final prospectus, or said amendment or supplement,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in said registration statement, said final prospectus or said
amendment or supplement in reliance upon and in conformity with written
information furnished by such Distributing Holder for use in the preparation
thereof; and, subject to paragraph 7(d), will reimburse the Company or any such
director, officer or controlling person for any legal or
7
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action.
(c) Within ten (10) days after receipt by an indemnified party
under this paragraph 7 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party, give the indemnifying party written notice of the
commencement thereof. The indemnified party's failure to give such timely notice
will relieve the indemnifying party of all liability under this paragraph 7 only
to the extent that the indemnifying party is prejudiced by such failure and, in
any case, the omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party otherwise than
under this paragraph 7.
(d) In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in and, to the extent that it
may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
paragraph 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense or investigation thereof. In no
event shall the indemnifying party be liable for any amounts paid in settlement
of any action unless the indemnifying party has approved the terms of such
settlement, provided that such consent shall not be unreasonably withheld.
8. The Exercise Price in effect at the time and the number and kind of
securities purchasable upon the exercise of this Representative's Warrant shall
be subject to adjustment from time to time upon the happening of certain events
as follows:
(a) In case the Company shall (i) pay a stock dividend or make
any other distribution on its outstanding shares of Common Stock in shares of
Common Stock, (ii) subdivide or reclassify its outstanding shares of Common
Stock into a greater number of shares, (iii) combine or reclassify its
outstanding shares of Common Stock into a smaller number of shares, or (iv)
enter into any transaction whereby the outstanding shares of Common Stock of the
Company are at any time changed into or exchanged for a different number or kind
of shares or other security of the Company or of another corporation through
reorganization, merger, consolidation, liquidation or recapitalization, then
appropriate adjustments in the number of Shares (or other securities for which
such Shares have previously been exchanged or converted) subject to this
Representative's Warrant shall be made and the Exercise Price in effect at the
time of the record date for such dividend or distribution or of the effective
date of such subdivision, combination, reclassification, reorganization, merger,
consolidation, liquidation or recapitalization shall be proportionately adjusted
so that the Holder of this Representative's Warrant exercised after such date
shall be entitled to receive the aggregate number and kind of shares of Common
Stock which, if this Representative's Warrant had been exercised by such Holder
immediately prior to such date, he would have been entitled to receive upon such
dividend, distribution, subdivision, combination, reclassification,
reorganization, merger, consolidation, liquidation or recapitalization. For
example, if the Company makes a 2 for 1 stock distribution and the Exercise
Price hereof immediately prior to such event was $11.55 per Share
8
and the number of Shares issuable upon exercise of this Representative's Warrant
was 50,000, the adjusted Exercise Price immediately after such event would be
$5.78 per Share and the adjusted number of Shares issuable upon exercise of this
Representative's Warrant would be 100,000. Such adjustment shall be made
successively whenever any event listed above shall occur.
(b) If the Company distributes any rights, options or warrants
to all holders of its Common Stock entitling them for a period expiring within
60 days after the record date mentioned below to purchase shares of Common Stock
at a price per share less than the current market price per share on that record
date, the Exercise Price shall be adjusted in accordance with the formula:
O + N x P
-----
E' = E x M
---------
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the record date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the current market price per share of Common Stock on the record
date.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Exercise Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.
(c) If the Company distributes to all holders of its Common
Stock any of its assets or debt securities or any rights or warrants to purchase
debt securities, assets or other securities of the Company, the Exercise Price
shall be adjusted in accordance with the formula:
E' = E x M - F
-----
M
where:
E' = the adjusted Exercise Price.
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E = the current Exercise Price.
M = the current market price per share of Common Stock on the record
date mentioned below.
F = the fair market value on the record date of the assets, securities,
rights or warrants applicable to one share of Common Stock. The Board of
Directors shall determine the fair market value.
The adjustment shall be made successively whenever any such distribution
is made and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution.
This subsection (c) does not apply to cash dividends or cash
distributions paid out of consolidated current or retained earnings as shown on
the books of the Company prepared in accordance with generally accepted
accounting principles.
(d) Whenever the Exercise Price payable upon exercise of this
Representative's Warrant is adjusted pursuant to subparagraphs (b) or (c) above,
the number of Shares purchasable upon exercise of this Representative's Warrant
shall simultaneously be adjusted by multiplying the number of Shares issuable
upon exercise of this Representative's Warrant by the Exercise Price in effect
on the date hereof and dividing the product so obtained by the Exercise Price,
as adjusted.
(e) For the purpose of any computation under this
Representative's Warrant, the current market price per share of Common Stock at
any date shall be deemed to be the average of the daily closing prices of the
Common Stock for the last ten consecutive business days before such date or, if
closing prices are not reported, the average of the last reported bid and asked
prices for the last ten consecutive business days before such date, in either
case as reported on the principal national securities exchange on which the
Common Stock is admitted to trading or listed or, if not listed or admitted to
trading on such exchange, the average of the highest reported bid and lowest
reported asked prices as reported by the American Stock Exchange or SmallCap
Market or OTC Bulletin Board, as applicable. If prices of the Common Stock are
not reported on any of the foregoing exchanges or market systems, then the fair
market price shall be determined by the Board of Directors in good faith.
(f) No adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least five cents
($0.05) in such price; provided, however, that any adjustments which by reason
of this subparagraph (f) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment required to be made
hereunder. All calculations under this paragraph 8 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be. Anything in
this paragraph 8 to the contrary notwithstanding, the Company shall be entitled,
but shall not be required, to make such changes in the Exercise Price, in
addition to those required by this paragraph 8, as it shall determine, in its
sole discretion, to be advisable in order that any dividend or distribution in
shares of Common Stock, or any subdivision, reclassification or combination of
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Common Stock, hereafter made by the Company shall not result in any Federal
income tax liability to the holders of the Common Stock or securities
convertible into Common Stock.
(g) Whenever the Exercise Price is adjusted, as herein provided,
the Company shall promptly cause a notice setting forth the adjusted Exercise
Price and adjusted number of Shares issuable upon exercise of this
Representative's Warrant to be mailed to the Holder, at its address set forth
herein, and shall cause a certified copy thereof to be mailed to the Company's
transfer agent, if any. The Company may retain a firm of independent certified
public accountants selected by the Board of Directors (who may be the regular
accountants employed by the Company) to make any computation required by this
paragraph 8, and a certificate signed by such firm shall be conclusive evidence
of the correctness of such adjustment.
(h) In the event that at any time, as a result of an adjustment
made pursuant to the provisions of this paragraph 8, the Holder of this
Representative's Warrant thereafter shall become entitled to receive any shares
of the Company other than Common Stock, thereafter the number of such other
shares so receivable upon exercise of this Representative's Warrant shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Stock
contained in subparagraphs (a) to (f), inclusive, above.
9. This Representative's Warrant shall be governed by and in accordance
with the laws of the State of California without regard to conflict of laws
provision.
10. In case of any consolidation of the Company with, or merger of the
Company into, any other entity, then adequate provision will be made whereby the
Holder will have the right to acquire and receive upon exercise of this
Representative's Warrant the kind and amount of securities, cash or other assets
that he would have received after the happening of such merger or consolidation
had this Representative's Warrant been exercised immediately prior to such
merger or consolidation. In any such case, the Company will make appropriate
provision to insure that the provisions of this paragraph 10 will thereafter be
applicable as nearly as may be in relation to any shares of stock or securities
thereafter deliverable upon the exercise of this Representative's Warrant. The
Company will not effect any such consolidation or merger unless, prior to the
consummation thereof, the Company has obtained the written agreement of the
successor entity (if other than the Company) to assume by written instrument the
obligations under this Representative's Warrant and the obligations to deliver
to the Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, the Holder may be entitled to acquire. This Warrant
will be binding upon any entity succeeding to the Company by merger or
consolidation.
11
IN WITNESS WHEREOF, the Company has caused this Representative's Warrant
to be signed by its duly authorized officer, and this Representative's Warrant
to be dated ____________, 2002.
INTRA-ASIA ENTERTAINMENT CORPORATION
By:
------------------------------------
Xxxxxxx X. Xxxxxxxxx
President and Chief Executive
Officer
AGREED TO AND ACCEPTED:
[Name and signature of the Representative.]
12
PURCHASE FORM
(To be signed only upon exercise of Representative's Warrant)
The undersigned, the holder of the foregoing Representative's
Warrant, hereby irrevocably elects to exercise the purchase rights
represented by such Warrant for, and to purchase thereunder,
_______________ Shares of Common Stock, $0.001 par value per share (the
"Shares"), of INTRA-ASIA ENTERTAINMENT CORPORATION and tenders herewith
payment of the Exercise Price in full, in the amount of $_________, and
requests that the certificates for the Shares be issued in the name(s)
of, and delivered to _________________, whose address(es) is (are):
Dated: ,
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By:
--------------------------------
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-----------------------------------
Address
TRANSFER FORM
(To be signed only upon transfer of Representative's Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto ______________________________ the right to purchase Shares represented by
the foregoing Representative's Warrant to the extent of __________ Shares, and
appoints _________________________ attorney to transfer such rights on the books
of _________________ ____________, with full power of substitution in the
premises. The undersigned represents and warrants that each transferee is a
permitted transferee under paragraph 3 of the Representative's Warrant.
Dated: ,
--------------- ----
By:
--------------------------------
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Address
The undersigned transferee agrees to be bound by all of the terms and
conditions of the Representative's Warrant.
[Name, date and signature of
transferee]
