Exhibit 10.5
NEITHER THIS WARRANT NOR THE SHARES ISSUABLE ON THE EXERCISE HEREOF HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
LAWS OF ANY STATE AND IS BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM
THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. NEITHER THIS WARRANT
NOR THE SHARES ISSUABLE ON THE EXERCISE HEREOF MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER SUCH SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM.
COMMON STOCK PURCHASE WARRANT
To Purchase 500,000 Shares Of Common Stock Of
ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
This is to certify, that FOR VALUE RECEIVED,
XXXXXXX XXXXXX XXXXXX
(the "Holder")
is entitled to purchase, subject to the provisions of this Warrant from
Entertainment Technologies & Programs, Inc. (the "Company"), a Delaware
corporation, at any time up to and including December 6, 2002 ("Expiration
Date"), up to an aggregate of Five Hundred Thousand (500,000) shares of the
Company's common stock, ("Common Stock") at a purchase price per share of Four
and One-Half Cents (US$0.045) in currency of the United States of America. The
number of shares of Common Stock to be received upon the exercise of this
Warrant and the price to be paid for a share of Common Stock may be adjusted
from time to time as hereinafter set forth. The shares of the Common Stock
deliverable upon such exercise, and as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Shares," and the exercise price of
a share of Common Stock in effect at any time and as adjusted from time to time
is hereinafter sometimes referred to as the "Exercise Price." This Warrant
replaces the warrant previously issued to you in conjunction with your purchase
of Two Hundred And Fourteen Thousand And Two Hundred And Eighty Six (214,286)
shares of Common Stock at a purchase price per share of Seven Cents (US$0.07) in
currency of the United States of America or an aggregate of Fifteen Thousand
Dollars ($15,000.00) (the "Common Stock Purchase") on or about July 6, 2001.
1. EXERCISE OF WARRANT. This Warrant may be exercised in whole or in part
at any time and from time to time up to an including the Expiration Date.
If the date on which the Holder's right to purchase Common Stock expires is
a day on which national banks in the United States of America are authorized by
law to close, then that right shall expire on the next succeeding day that is
not such a day. The Holder shall exercise all rights to purchase Common Stock by
presenting and surrendering this Warrant to the Company, at 00000 Xxxxxx Xxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000, with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Exercise Price for the number of
shares specified in such form. If this Warrant should be exercised in part only,
the Company shall, upon surrender of this Warrant for cancellation, execute and
deliver a new Warrant evidencing the right of the Holder to purchase the balance
of the shares purchasable hereunder. Upon receipt by the Company of this
Warrant, in proper form for exercise, with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Exercise Price for the number of
shares specified in such form, the Holder shall be deemed to be the holder of
record of the shares of Common Stock issuable upon such exercise,
notwithstanding that certificates representing such shares of Common Stock shall
not then be actually delivered to the Holder. As soon as practicable after each
exercise of this Warrant, the Company will deliver the shares issuable upon such
exercise to the Holder.
2. ISSUANCE AND DELIVERY OF SHARES. The Company hereby represents,
warrants and agrees that at all times there shall be reserved for issuance and
delivery to the Holder the number of shares of Common Stock as shall be required
for issuance or delivery upon exercise of this Warrant. Furthermore, the
Company hereby represents that upon closing of the Common Stock Purchase, the
Company will immediately undertake efforts to file a registration statement as
soon as possible to include the registration of all of the Common Stock reserved
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Common Stock Purchase Warrant
and required for issuance and delivery to the Holder upon exercise of this
Warrant. The Holder will receive registered Common Stock upon exercise of the
Warrant if such shares of common stock have been registered. Otherwise, the
Holder will receive unregistered shares of Common Stock upon exercise of this
Warrant, with such Common Stock to be registered pursuant to the requirements of
this paragraph 2.
3. FRACTIONAL SHARES. No fractional shares or script representing
fractional shares shall be issued upon the exercise of this Option. With respect
to any fraction of a share called for upon any exercise hereof, the Company
shall pay to the Holder an amount in cash equal to such fraction multiplied by
the current market value of such fractional share, determined as follows:
(a) If the Common Stock is listed on a national securities exchange or
admitted to unlisted trading privileges on such exchange, the current value
shall be the last reported sales price of the Common Stock on such exchange
on the last business day prior to the date of exercise of this Option or if
no such sale is made on such day, the average of the closing bid and asked
prices for such day on such exchange; or
(b) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the current value shall be the mean of the last
reported bid and asked prices reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), or if not so
quoted on NASDAQ then by the National Quotation Bureau, LLC, New York, New
York, on the last business day prior to the date of the exercise of this
Warrant; or
(c) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the
current value shall be an amount, not less than book value, determined in
such reasonable manner as may be prescribed by the Company's board of
directors, and supported by the written fairness opinion of an independent,
nationally-recognized stock valuation expert.
4. TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
(a) The Holder may assign this Warrant, in whole or in part, or any
interest herein. This Warrant and the Warrant Shares have not been filed or
registered with the United States Securities and Exchange Commission or
with the securities regulatory authority of any state. This Warrant and the
Warrant Shares are subject to restrictions imposed by federal and state
securities laws and regulations on transferability and resale, and may not
be transferred assigned or resold except as permitted under the Securities
Act of 1933, as amended (the "Act"), and the applicable state securities
laws, pursuant to registration thereunder or exemption therefrom. Upon
receipt by the Company of evidence satisfactory to it that this Warrant or
any portion hereof, has been legally and validly transferred or assigned,
the Company will, at the request of the Holder, upon presentation and
surrender hereof to the Company or at the office of its stock transfer
agent, if any, exchange this Warrant for one or more Warrants, in such
denominations as the Holder shall specify, registered in such name or names
as the Holder shall designate. If, at the time of such transfer or
assignment, this Warrant has not been registered under the Act, then each
such transferee and assignee shall furnish the Company with evidence
satisfactory to it that such transferee or assignee is acquiring such
Warrant for his, her or its own account, for investment purposes, and not
with a view towards a distribution thereof or of the Warrant Shares
issuable upon its exercise. The term "Warrant," as used herein, includes
any Warrants issued in substitution for or replacement of this Warrant, or
into which this Warrant may be divided or exchanged.
(b) Upon receipt by the Company of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and in the case of
loss, theft or destruction of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant in the case of mutilation,
the Company will execute and deliver a new Warrant of like tenor and date.
Any such new Warrant executed and delivered shall constitute an additional
contractual obligation on the part of the Company, whether or not this
Warrant so lost, stolen, destroyed or mutilated shall be at any time
enforceable by anyone.
(c) The Company may cause any legend required under the Act and
applicable state securities laws, or advisable in the opinion of its legal
counsel, to be set forth on each Warrant.
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Common Stock Purchase Warrant
5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder as the Holder of this Warrant are limited to those
expressed in this Warrant Agreement.
6. OFFICER'S CERTIFICATE. Whenever the Company shall determine the fair
market value of the Common Stock pursuant to Paragraph 3 hereof, the Company
shall forthwith file in the custody of its secretary at its principal office,
with its stock transfer agent and with the Holder, an officer's certificate
showing the such fair market value and the date as of which it was determined,
and setting forth in reasonable detail the facts requiring such determination
and the facts, assumptions, methodology and calculations employed in determining
such value. The Company shall forthwith deliver a copy of each such officer's
certificate to the Holder, and the Company shall make all such officer's
certificates available at all reasonable times for inspection by and copying by
the Holder.
7. NOTICES TO WARRANTHOLDERS. So long as this Warrant shall be
outstanding and any portion of it shall be unexercised, (i) if the Company shall
pay any dividend or make any distribution upon the Common Stock or (ii) if the
Company shall offer to the holders of Common Stock for subscription or purchase
by them any shares of stock of any class or any other rights or (iii) if any
capital reorganization of the Company, reclassification of the Company's capital
stock, consolidation or merger of the Company with or into another corporation,
sale, lease or transfer of all or substantially all of the Company's property
and assets to another corporation, or voluntary or involuntary dissolution,
liquidation or winding up of the Company shall be effected, then in any such
case, the Company shall cause to be delivered to the Holder, at least ten days
prior to the date specified in (x) or (y) below, as the case may be, a notice
containing a brief description of the proposed action and stating the date on
which (x) a record is to be taken for the purpose of such dividend, distribution
or rights, or (y) such reclassification, reorganization, consolidation, merger,
conveyance, lease, dissolution, liquidation or winding up is to take place and
the date, if any is to be fixed, as of which the holders of record of Common
Stock shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reclassification, reorganization,
consolidation, merger, conveyance, dissolution, liquidation or winding up.
8. RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of an
issuance of Common Stock by way of dividend or other distribution or of a
subdivision or combination), or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of this
Warrant) or in case of any sale or conveyance to another corporation of the
property of the Company as an entirety or substantially as an entirety, the
Company shall cause effective provision to be made so that the Holder shall have
the right thereafter, by exercising this Warrant, to purchase the kind and
amount of shares of stock and other securities and property receivable upon such
classification, capital reorganization or other change, consolidation, merger,
sale or conveyance. Any such provision shall include provision for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Warrant. The foregoing provisions of this Paragraph 8 shall
similarly apply to successive reclassifications, capital reorganizations and
changes of shares of Common Stock and to successive consolidations, mergers,
sales or conveyances. In the event that in any such capital reorganization or
reclassification, consolidation, merger, sale or conveyance, additional shares
of Common Stock shall be issued in exchange, conversion, substitution or
payment, in whole or in part, for or of a security of the Company other than
Common Stock, any such issue shall be treated as an issue of Common Stock
covered by the provisions of 5 hereof with the amount of the consideration
received upon the issue thereof being determined by the Company's board of
directors, such determination to be final and binding on the Holder.
9. SPIN-OFFS. In the event the Company spins-off a subsidiary by
distributing to the Company's stockholders as a dividend or otherwise the stock
of the subsidiary, the Company shall reserve for the life of the Warrant shares
of the subsidiary to be delivered to the holders of the Warrants upon exercise
to the same extent as if they were owners of record of the Warrant Shares on the
record date for payment of the shares of the subsidiary.
10. MISCELLANEOUS. All notices given under this Warrant shall be in
writing, addressed to the parties as set forth below, and shall be effective on
the earliest of (i) the date received, or (ii) if given by facsimile transmittal
on the date given if transmitted before 5:00 p.m. the recipients time, otherwise
it is effective the next day, or (iii) on the second business day after delivery
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Common Stock Purchase Warrant
to a major international air delivery or air courier service (such as Federal
Express or Network Couriers):
If to the Holder: If to the Company:
Xxxxxxx Xxxxxx Xxxxxx Entertainment Technologies & Programs, Inc.
00000 Xxxxxx Xxxx Xx. 00000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000 Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxx Xxxxxxx, CEO
Telephone No. (000) 000-0000 Telephone: (000) 000-0000
Facsimile No. Same. Facsimile: (000) 000-0000
With a copy (that does not constitute
notice) to:
Sonfield & Sonfield, P.C.
Attorneys at Law
000 Xxxxx Xxxx Xxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Facsimile No. (000) 000-0000
11. This Warrant is binding on and, except for the limitations on transfer
and assignment contained in Paragraph 4, shall inure to the benefit of the
successors in interest of the Company and the Holder, respectively.
12. This Warrant shall be governed by and interpreted in accordance with
the laws of the State of Delaware without regard to the principles of conflicts
of laws thereof and shall inure to the benefit of and be binding upon the
parties hereto and the respective legal successors and assigns of each. The
parties agree that the courts of the State of Texas, Xxxxxx County, shall have
exclusive jurisdiction and venue for the adjudication of any civil action
between them arising out of or relating to this Agreement, and hereby
irrevocably consent to such jurisdiction and venue.
Dated as of November 16, 2001:
Entertainment Technologies & Programs, Inc.
By
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Xxxxxx X. Xxxxx, CEO
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Common Stock Purchase Warrant
PURCHASE FORM
Date:
--------------------
To: Entertainment Technologies & Programs Inc.
Attn: Xxxxxx X. Xxxxx, CEO
00000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
The undersigned hereby irrevocably elects to exercise the within Warrant to the
extent of purchasing ___________ shares of Common Stock, and hereby makes
payment of US$_____________ in payment of the Exercise Price thereof.
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Xxxxxxx Xxxxxx Xxxxxx
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:
----------------------------------
Address:
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City, State, Zip Code:
-----------------
Signature:
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Common Stock Purchase Warrant
