Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1 S-1/ Common Stock - $10,822,500 95 448K
2: EX-1.1 Selling Group Agreement 7 43K
3: EX-3.1 Articles of Incorporation - Msh Entertainment 14 65K
4: EX-3.2 Bylaws - Msh Entertainment Corp. 6 32K
5: EX-4.1 Subscription Agreement 3 16K
6: EX-5.1 Opinion - Glenn Gearhart 2± 11K
7: EX-10.1 Employment Agreement - Msh & Robert Maerz 12 48K
16: EX-10.10 Cooperation Agreement - Msh & Happy Zone 16 61K
17: EX-10.11 Promissory Note - Msh & Robert Maerz 1 10K
18: EX-10.12 Promissory Note - Msh & Alfred Morgan 1 10K
19: EX-10.13 Promissory Note - Msh & Rick Seibold 1 10K
20: EX-10.14 Promissory Note - Msh & Jonathan Stathakis 1 10K
21: EX-10.15 Credit Agreement - Msh & Happy Zone 3 17K
8: EX-10.2 Employment Agreement - Msh & Jonathan Stathakis 12 48K
9: EX-10.3 Employment Agreement - Msh & Christopher Haigh 9 47K
10: EX-10.4 Employment Agreement - Msh & Fred Aurelio 10 43K
11: EX-10.5 Promissory Note - Christopher Haigh 2 14K
12: EX-10.6 Msh - 1996 Stock Option Plan 12 48K
13: EX-10.7 Credit Agreement - Msh & Robert Posner 5 25K
14: EX-10.8 Cooperation & Warrant Agreement - Msh & Intel 37 160K
15: EX-10.9 Production Agreement - Msh & Abrams/Gentle 19 75K
22: EX-27 Financial Data Schedule 2 10K
EX-10.9 — Production Agreement – Msh & Abrams/Gentle
Exhibit Table of Contents
EXHIBIT 10.9
AGREEMENT
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This AGREEMENT made this 1st day of November, 1996 between MSH Entertainment
Corporation, Inc. ( hereinafter referred to as "MSHE"), a Utah corporation whose
address is 768 Brannan Street, San Francisco, California 94103 and
Abrams/Gentile Entertainment, Inc. (referred to as "AGE"), whose address is 244
West 54th Street, 9th floor, New York, New York, 10019 (with MSHE and AGE being
collectively called "Parties").
WITNESSETH
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WHEREAS AGE warrants and represents that AGE owns all the rights, title and
interest, including all materials including, but not limited to, scripts, story
ideas, treatments, adaptations, trademarks, toy designs, merchandising and the
titles, characters, drawings, plots, themes and storylines for a proposed
television series and merchandising and toy line entitled "Vanpires"
(hereinafter the "Property"); and
WHEREAS the Parties desire to enter into a co-production arrangement ("Co-
Production Agreement") as outlined herein for the purpose of producing the
Property; and
WHEREAS the Parties desire to produce thirteen (13) episodes of the Property to
be sold as a television series ("Series") and toy line and merchandising items
(collectively "Merchandising"); and
WHEREAS the Parties desire to establish each Party's rights in connection with
the Property and the proceeds derived from any sales, production and/or
distribution of the Property and share profits therefrom with each other as set
forth herein; and
WHEREAS, the Parties hereby agree as follows:
NOW THEREFORE, in consideration of the mutual promises contained herein, the
Parties agree as follows:
1. Adoption of Recitals: The Parties hereto adopt the above recitals as being
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true and correct.
2. Co-Production: The Parties are undertaking a co-production ("Co-
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Production") for the production of the Series.
3. Term: The term of this Agreement shall be in perpetuity unless sooner
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terminated by mutual agreement of the Parties and shall continue for:
a. the duration of any and all copyrights shared and/or owned by the Co-
Production; or
b. so long as the Parties shall be entitled to compensation with respect
to any Agreements and/or licenses to third parties in connection with the
Property and/or the Series, including all modifications, additions, options,
extensions, renewals, substitutions for, and replacement of such agreements,
directly or indirectly; and
c. for purposes herein, any agreements made, entered into or resumed
within six (6) months immediately following the termination of any particular
prior agreements with the Parties, shall be deemed a substitution or replacement
of such agreements; and
d. as used herein, the term "Agreements" means any and every written
agreement entered into, in existence, directly or indirectly relating to the
Property and/or the Series.
4. Title to Assets: Except as provided below, any and all assets and all
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forms of exploitation of the Property including, but not limited to, all
ancillary and allied rights thereto, including but not limited to toys, games,
merchandising, music rights, stage rights, television rights, radio broadcasting
rights, book publishing, motion pictures and all other rights including the
copyright (herein collectively referred to as the "Rights") shall be owned by
and title held by AGE.
5. Concept: It is acknowledged that the Property is the creation of AGE, and
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that the further creation of the Series shall be the contribution of AGE and
MSHE.
6. Ownership: All ownership rights including the underlying rights of the
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Property and Series, rights of trademark and copyright and renewals thereof,
shall, except as noted herein, be in the name of AGE. The care, custody and
control of all master tapes produced hereunder shall remain with MSHE and at its
facility in San Francisco, unless otherwise instructed by AGE.
7. Capital and Other Contributions: Each of the Parties have agreed to
--------------------------------
contribute in cash and/or a combination of cash and services the following:
a. AGE:
(1). AGE shall provide cash and services of One Million Three Hundred
Thousand Dollars ($1,300,000.00) for the production of the thirteen (13)
episodes of the Series, according to the schedule of payments as outlined in the
attached addendum ("Addendum").
(2). AGE shall be the Producer of the Series;
(3). AGE shall maintain creative control over the production of the
Series but agrees to engage in active and meaningful consultation with MSHE;
however, in the event of a dispute, the decision of AGE shall govern.
(4). AGE agrees to deliver to MSHE complete design work for the
Property on or about January 12, 1997.
(5). AGE agrees to the deliverables outlined in the attached
Addendum.
b. MSHE:
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(1) MSHE shall be the co-producer of the Series;
(2). MSHE shall provide cash and services of Six Hundred and Fifty
Thousand Dollars ($650,000) for the production of the thirteen (13) episodes of
the Series, a schedule of payments as outlined in the attached Addendum;
(3). MSHE shall provide the necessary amount, expected to be up to
fifty (50) Intel computer work stations to properly implement the "Overlord"
animation system in order to produce the Series. The system must be installed
and functioning on a beta basis on or about November 21, 1996 and have produced
a test program acceptable and satisfactory to AGE, in its sole descretion, of
approximately two (2) minutes in duration, based on AGE storyboards, character
and background design. MSHE agrees to the deliverables schedule outlined in the
attached Addendum;
(4). In order to meet the above mentioned threshold, AGE shall
deliver to MSHE complete design work on or about January 12, 1997.
(5). The use of MSHE Communications' production facility, (formally
East End Communications) on a priority basis, at no additional cost, for both
the production and post-production of the Series;
(6). Arrangement of all necessary insurance for the production
including E&O insurance, in a manner subject to AGE's approval.
(7). All the necessary hardware and software to meet the creative
criteria of AGE and deliver 13 half hour episodes of high broadcast quality CGI
animation;
(8). MSHE shall arrange to have Chris Haigh available to work on the
episodes of the Series on a priority basis;
(9). MSHE shall cause to be opened and each Party shall deposit its
respective funds in a mutually agreed upon bank account solely for the purpose
of producing the Series. Any and all expenditures related to the production of
the Property shall be made from this account. Prior to the opening of the
account, AGE and MSHE shall each designate a signatory on the account, subject
to the approval of AGE. Additionally, MSHE will provide, if requested, from
time to time, detailed explanations of how MSHE intends to finance its working
capital needs both specifically related to the production contributions and
working capital for general corporate needs.
8. Control of the Property: All decisions relating to the activities of the
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Property, and any and all decisions with respect to third party contractual
Agreements, creative, business, financial and legal matters in connection with
the Property, and all subsidiary and ancillary rights thereto and all
exploitation thereof, shall be remain with AGE.
9. Warrants: MSHE shall issue warrants to AGE, for nominal consideration, for
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the right to purchase up to one (1) million common shares of MSHE for a period
up to four (4) years from the execution date of this Agreement. The warrants
shall be covered in a separate agreement (the "Warrant Agreement").
10. Intel: MSHE will execute a cooperation agreement with Intel, as previously
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presented to AGE. Should MSHE be unable to complete such an agreement or should
MSHE complete an agreement that contradicts the spirit of the role intended for
Intel within this Agreement, AGE may in its own discretion automatically
terminate this Co-Production Agreement with MSHE by seven (7) days written
notice of same, and shall thereafter have no further obligation to MSHE.
11. Participation. Subject to the production of the Series and to the
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performance of MSHE's obligations hereunder, it is agreed to by the Parties
hereto that both AGE and MSHE shall be placed in first position to both fully
recoup, pari passu, their initial investments in the production of the Series
($1.3 million to AGE, and $650,000 to MSHE) from 100% of revenues received by
AGE from the domestic and foreign broadcast of the Series; video licenses and
sales; and CD-ROM licenses and sales. Thereafter, once both Parties have fully
recouped, MSHE shall receive an economic interest from the licensing activities
relating to the Property as follows:
a. Series - 5% of the net advertising sales revenue earned by AGE in the
U.S. from the broadcast of the Series;
Toys, domestic - 1% of the net Toy revenues earned by AGE in the U.S.;
Toys, international - 2% of the net Toy revenues earned by AGE
internationally;
Merchandising - 2% of the net merchandising revenues earned by AGE
including, but not limited to, Video, CD-ROM and Foreign Broadcast
rights.
b. "Net revenue" is defined as those revenues actually received by AGE
after deduction of any fees paid to independent agents.
c. From time to time, and with proper notice to AGE, MSHE shall have
reasonable access to the books and records of AGE as they pertain to the
Property only.
12. "VANPIRES" Credits: Subject to the Production of the Series, and subject
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to the performance of all obligations hereunder, MSHE shall be entitled to a
mutually agreed upon co-production credit on a separate card, and those persons
from MSHE who perform pre-approved, by AGE, services on the Series shall receive
a credit related to the services which they provided.
13. Warranties, Indemnification:
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a. AGE hereby warrants and represents that AGE:
(1). has the right and capacity to enter into this Agreement and is
not prevented by law or otherwise from so doing;
(2). owns the rights and the underlying rights to the Property and
is able by law to enter into this Agreement and can produce proof of same;
(3). has not entered into any other agreement whatsoever with third
parties which adversely effects the Parties' rights hereunder or is inconsistent
in any manner with any term set forth hereunder; and
(4). shall have authorized the signing party to execute this
Agreement on behalf of AGE.
b. AGE hereby indemnifies and holds harmless MSHE from and against
any and all claims, liabilities, damages, and costs including but not limited to
reasonable attorney's fees and court costs arising from any breach by AGE of any
representations, warranty or agreement made by AGE hereunder.
c. MSHE hereby warrants and represents that MSHE:
(1) owns all the necessary rights to the Overlord Animation System;
(2) has the right and capacity to enter into this Agreement and is
not prevented by law or otherwise from so doing;
(3) has not entered into any other agreement whatsoever with third
parties which adversely affects the Parties' rights hereunder or is inconsistent
in any manner with any term set forthe hereunder; and
(4) shall have authorized the signing party to execute this
Agreement on behalf of MSHE.
d. MSHE hereby indemnifies and holds harmless AGE from and against any
and all claims, liabilities, damages and costs including, but not limited to,
reasonable attorney's fees and court costs arising from any breach by MSHE of
any representations, warranty or agreement made by MSHE hereunder
15. Budget: The budget for the Series shall be prepared by MSHE and AGE, with
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AGE having final approval.
16. Additional Documents: Each Party hereto shall execute and deliver any and
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all additional papers, documents and other instruments and shall do any and all
further acts and things reasonably necessary in connection with the performance
of his obligations hereunder to carry out the intent of the Agreement.
17. Merchandising: AGE shall have the exclusive right to merchandise the
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Property including all toys, merchandising and games and any ancillary
products created or derived from the Property.
18. Default/Takeover Rights: MSHE acknowledges that AGE will be entering into
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binding commitments to deliver fully produce episodes of the Series to third
parties and will incur substantial liability in the event of late-delivery or
non-delivery of Series episodes. Accordingly, it is agreed that in the event
that MSHE defaults in making delivery of technically satisfactory animation of
the Series episodes on the schedule set forth on the Addendum annexed hereto,
which default persists after seven (7) days written notice of default from AGE
to MSHE, then if such event, and without limiting AGE's other rights or remedies
under this Agreement or pursuant to law. AGE shall have immediate right to take
over further production of the Series episodes. In the event of such uncured
default, MSHE shall, upon AGE's written notice, deliver to AGE (or to any third
party designee) any and all program materials including, without limitation, any
computer programs and any pictorial or audio/visual works created, by computer
or otherwise, in the course of MSHE's producing the animation for the Series
episodes. Furthermore, in such event, MSHE shall make available to AGE (or
AGE's designee) the Overlord Software and will provide such technical personnel
as may be necessary to enable AGE (or its designee) to utilize such Overlord
Software to complete production and delivery of the animation for the Series
episodes uncompleted as of the time such default and takeover of production, if
ever.
19. Entire Agreement: This Agreement and all the exhibits attached represents
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the entire and complete Agreement among the Parties hereto with respect to the
subject matter hereof and supersedes all previous agreements , understandings or
representations whether oral or written, between the Parties regarding the
subject matter hereof.
20. Non-Waiver: No delay or failure by a Party to exercise any right under
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this Agreement, and no partial or single exercise of that right, shall
constitute a waiver of that or any other right, unless otherwise expressly
provided herein, and no waiver shall be effective unless made in writing.
21. Captions: The captions of the various paragraphs and sections of this
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Agreement are intended to be used solely for convenience of reference and are
not intended and shall not be deemed for any purpose whatsoever to modify or
explain or to be used as an aid in the construction of any provision.
22. Counterparts: This Agreement may be executed in counterparts with each
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original being deemed a whole and complete copy.
23. Assignment: MSHE may not assign, sell, grant a security interest in, or
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otherwise dispose of their interest in the Property unless agreed to in writing
by AGE.
24. Amendments: This Agreement cannot be amended, modified or changed in any
-----------
way whatsoever except by a written instrument duly signed by the Parties hereto.
25. Authority: The corporations which are Parties hereto warrant and represent
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that they have the power and authority to enter into this Agreement.
26. Void Provisions: If any provision hereof as applied to any Party or to any
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circumstance shall be adjudged by a Court to be void or unenforceable, the same
shall in no way affect any other provisions hereof, the application of such
provision in any other circumstances or the validity or enforceability hereof.
27. Successors and Assigns: Except where provided to the contrary, this
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Agreement, and all provisions hereof, shall inure to the benefit of and be
binding upon the Parties hereto, their successors in interest, assigns,
administrators, executors, heirs and devisees.
28. Governing Law: This Agreement shall be construed in accordance with and
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governed by the laws of the State of New York and consent to jurisdiction of the
Federal courts located in New York City with respect to resolution of any
disputes arising hereunder.
The Parties herein have fully read, understood and executed this Agreement
freely and voluntarily. By signing in the spaces provided below, the Parties
accept and agree to all the terms and conditions of this Agreement.
In Witness Whereof the Parties hereto have caused this Agreement to be duly
executed.
[Download Table]
/s/ JOHN GENTILE /s/ ROBERT MAERZ
---------------------------------- -----------------------------
Abrams/Gentile Entertainment, Inc. MSH Entertainment Corporation
John Gentile Robert Maerz
---------------------------------- -----------------------------
Print Name Print Name
Its President Its Chairman
------------------------------ -------------------------
Title Title
Date 11/1/96 Date 11/1/96
------------------------------ -------------------------
WARRANT
THE WARRANT EVIDENCE OR CONSTITUTED HEREBY AND THE SHARES OF COMMON STOCK
HEREUNDER HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED ("THE ACT"), AND MAY NOT BE SOLD, OFFERED FOR SALE,
TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE ACT UNLESS
EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL TO THE EFFECT THAT
REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR (ii) THE
SALE OF SUCH SECURITIES IS MADE PURSUANT TO SECURITIES AND EXCHANGE COMMISSION
RULE 144.
WARRANT TO PURCHASE 1,000,000 SHARES
OF COMMON STOCK OF MSH ENTERTAINMENT CORPORATION
(Subject to Adjustment)
NO. ____
THIS CERTIFIES THAT, in consideration of the receipt by MSH Entertainment
Corporation, a Utah Corporation (the "Company"), of $1.00 in cash from Abrams
Gentile Entertainment Inc., (the "Purchaser"), Purchaser or its permitted
registered assigns (the "Holder"), is entitled subject to terms and conditions
of this Warrant, at any time after October 8, 1996 (the "Effective Date"), and
before 5:00 p.m. Pacific Standard Time on October 8, 2000 (the "Expiration
Date"), to purchase from the Company, One Million (1,000,000) fully paid and non
assessable shares of the Company's Common Shares, $.001 par value per share
(the "Warrant Stock"), at the exercise price as defined in Section 1.5. Both
the number of shares of Warrant Stock purchasable under this Warrant and the
Exercise Price are subject to adjustment as provided herein. This Warrant is
issued pursuant to a certain Vanpires Production Agreement (the "Vanpires
Production Agreement") between the Company and the Purchaser of even date
herewith. This Warrant shall terminate on the Expiration Date.
1. CERTAIN DEFINITIONS. As used is this Warrant:
1.1 The term "Warrant Stock" shall mean the common shares, $0.001 par
value per share, of the Company, and any other securities and property any time
receivable or issuable upon exercise of this Warrant, unless the context
otherwise requires.
1.2 The term "Warrant" as used herein, shall include this Warrant and any
warrant delivered in substitution or exchanged therefor as provided herein.
1.3 The term "Register Holder" shall mean any holder in whose name this
Warrant is registered upon the books and records maintained by the Company.
1.4 The term "Fair Market Value" of a share of Warrant Stock as of a
particular date (the "Determination Date") shall mean:
(a) If traded on a securities exchange or the NASDAQ national market,
the Fair Market Value shall be deemed to be the average of the closing prices of
the Common Stock of the Company on such trading market over the 10 business
days ending three (3) days prior to the Determination Date;
(b) If actively traded over the counter, the Fair market value shall
be deemed to be the average of the closing bid prices over the twenty - day
period ending three (3) days prior to the determination date; and
(c) If there is no active public market, the Fair Market Value shall
be the value thereof, as determined in good faith by the Board of Directors of
the Company.
1.5 The term "Exercise Price" shall mean the lowest of (a) $1.75; or (b)
75% of the currently proposed secondary offering price to the underwriters (net
of underwriting discounts) of the common shares pursuant to the first
underwritten public offering of the Common Shares by the Company following the
Effective Date but before the effective date of the exercise of this Warrant.
2. EXERCISE OF WARRANT
2.1 Payment
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Subject to compliance with the terms and conditions of this Warrant
and applicable securities laws, this Warrant may be exercised, in whole or in
part at any time on or before the Expiration Date, by surrendering this Warrant
at the principal office of the Company together with:
(a) the form of Notice of Exercise attached hereto as Exhibit 1 (the
"Notice of Exercise") duly executed by the Holder, and
(b) payment, (i) in cash (by check) or by wire transfer, (ii) by
cancellation by the Holder of indebtedness of the Company to the Holder or (iii)
by a combination of (i) and (ii), of an amount equal to the product obtained by
multiplying the number of shares of Warrant Stock being purchased upon such
exercise by the then effective Exercise Price (the "Exercise Amount").
2.2 Net Issue Exercise
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In lieu of the payment methods set forth in Section 2.1(b) above, the
Holder may elect to exchange the Warrant for shares of Warrant Stock equal to
the value of the amount of the Warrant being exchanged on the date of exchange.
If Holder elects to exchange this Warrant as provided in this Section 2.2,
Holder shall tender to the Company the Warrant for the amount of the Warrant,
and the Company shall issue to Holder the number of shares of the Company's
Warrants Stock computed using the following formula:
X = Y(A-B)
------
A
Where: X = the number of shares of Warrant Stock to be issued to Holder.
Where: Y = the number of shares of Warrant Stock purchasable under the
amount of the Warrant being exchanged (as adjusted to the date of such
calculation).
Where: A = the Fair Market Value of one share of the Company's Common
stock.
Where: B = Exercise Price (as adjusted to the date of such calculation).
All references herein to an "exercise" of the Warrant shall include an
exchange pursuant to this Section 2.2.
2.3 Partial Exercise; Effective Date of Exercise.
--------------------------------------------
In case of any partial exercise of this Warrant, the Company shall
cancel this Warrant upon surrender hereof and shall execute and deliver a new
Warrant of like tenor and date for the balance of the shares of Warrant Stock
purchasable hereunder. This Warrant shall be deemed to have been exercised
immediately prior to the close of business of the date of its surrender for
exercise as provided above. The person entitled to receive the shares of
Warrant Stock issuable upon exercise of this Warrant shall be treated for all
purposes as the holder of record of such shares as of the close of business on
the date the Holder is deemed to have exercised this Warrant.
2.4 Stock Certificates; Fractional Shares.
--------------------------------------
As soon as practicable on or after such date, the Company shall issue
and deliver to the person or persons entitled to receive the same a certificate
or certificates for the number of whole shares of Warrant Stock issuable upon
such exercise, together with cash in lieu of any fraction of a share equal to
such fraction of the Fair Market Value of one whole share of Warrant Stock as of
the date of exercise of this Warrant. No fractional shares of scrip
representing fractional shares shall be issued upon an exercise of this Warrant.
2.5 Purpose of Warrant.
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The Company and Purchaser specifically acknowledge and agree (i) that
this Warrant is being entered into to enhance the long term relationship between
Purchaser and the Company and (ii) that there is no assurance to maintain
existing business with the Company.
2.6 Exercise Rights.
----------------
In the event that any person commences a tender offer to purchase all
or a controlling interest of the outstanding shares of equity securities of the
Company, this Warrant shall become exercisable in full upon the commencement of
such tender offer.
3. VALID ISSUANCE; TAXES.
All shares of Warrant Stock issued upon the exercise of this Warrant shall
be validly issued, fully paid and non-assessable, and the Company shall pay all
taxes and other governmental charges that may be imposed in respect of the issue
or delivery thereof. The Company shall not be required to pay any tax or other
charge imposed in connection with any transfer involved in the issuance of any
certificate for shares of Warrant Stock in any name other than that of the
Registered Holder of this Warrant, and in such case the Company shall not be
required to issue or deliver any stock certificate of security until such tax or
other charge has been paid, or it has been established to the Company's
reasonable satisfaction that no tax or other charge is due.
4. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES.
The number of shares of Warrant Stock issuable upon exercise of this
Warrant (or any shares of stock or other securities or property receivable or
issuable upon exercise of the Warrant) and the Exercise Price are subject to
adjustment upon occurrence of the following events:
4.1 Adjustment for Stock Splits, Stock Subdivisions or Combination of
-----------------------------------------------------------------
Shares.
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The Exercise Price of this Warrant shall be proportionally decreased
and the number of shares of Warrant Stock issuable upon exercise of the Warrant
(or any shares of stock or other securities at the time issuable upon exercise
if this Warrant) shall be proportionally increased to reflect any stock split or
subdivision of the Company's Common Stock. The Exercise Price of this Warrant
shall be proportionally increased and the number of shares of Warrant Stock
issuable upon exercise of this Warrant (or any shares of stock or other
securities at the time issuable upon exercise of this Warrant) shall be
proportionally decreased to reflect any combination of the Company's Common
Stock.
4.2 Adjustment for Dividends or Distributions of Stock or Other Securities
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or Property.
-----------
In case the Company shall make or issue, or shall fix a record date
for the determination of eligible holders entitled to receive, a dividend or
other distribution with respect to the Warrant Stock (or any shares of stock or
other securities at the time issuable upon exercise of the Warrant) payable in
(i) securities of the Company or (ii) assets (excluding cash dividends paid or
payable solely out of retained earnings), then, in each such case, the Holder of
this Warrant on exercise thereof at any time after the consummation, effective
date or record date of such dividend or other distribution, shall receive, in
addition to the shares of Warrant Stock (or such other stock or securities)
issuable on such exercise prior to such date, and without the payment of
additional consideration therefore, the securities or such other assets of the
Company to which such Holder would have been entitled upon such date if such
Holder had exercised this Warrant on the date hereof and had thereafter, during
the period from the date hereof to and including the date of such exercise,
retained such shares and/or all other additional stock available by it as
aforesaid during such period giving effect to al adjustment call for by this
Section 4.
4.3 Reclassification.
----------------
If the Company, by reclassification of securities or otherwise, shall
change any of the securities as to which purchase rights under this Warrant
exist in the name of a different number of securities of any other class or
classes, the Warrant shall thereafter represent the right to acquire such number
and kind of securities as would have been issuable as the result of such change
with respect tot he securities that were subject to the purchase rights under
this Warrant immediately prior to such reclassification or other change and the
Exercise Price therefore shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 4.
4.4 Adjustment for Capital Reorganization, Merger or Consolidation.
--------------------------------------------------------------
In case of any capital reorganization of the capital stock of the
Company (other than a combination , reclassification, exchange or subdivision of
shares otherwise provided or here), or any merger or consolidation of the
Company with or into another corporation, or the sale of all or substantially
all the assets of the Company then, and in each such case, as part of such
reorganization, merger, consolidation, sale or transfer, lawful provision shall
be made so that the Holder of this Warrant shall thereafter be entitled to
receive upon exercise of this Warrant, during the period specified herein and
upon payment of the Exercise Price then in effect, the number of shares of stock
or other securities or property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer that a holder of the
shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization,
consolidation, merger, sale or transfer, all subject to further adjustment as
provided in the Section 4.
The foregoing provisions of the Section 4.4 shall similarly apply to
successive reorganizations, consolidations, mergers, sales and transfers and to
the stock or securities of any other corporation that are at the time receivable
upon the exercise of this Warrant. If the per-share consideration payable to
the Holder hereof for shares in connection with any such transaction is in a
form other than cash or marketable securities, then the value of such
consideration shall be determined in good faith by the Company's Board of
Directors. In all events, appropriate adjustment (as determined in good faith
by the Company's Board of Directors) shall be made in the application of the
provision of this Warrant with respect to the rights and interest of the Holder
after the transaction, to the end that the provisions of this Warrant shall be
applicable after that event, as near as reasonably may be, in relation to any
shares or other property deliverable after that event upon exercise of this
Warrant.
4.5 Reservation of Securities and Assets.
------------------------------------
The Company shall reserve, for the life of the Warrant, such securities or
such other assets of the Company the Holder is entitled to receive pursuant to
the Section 4.
5. CERTIFICATE AS TO ADJUSTMENTS.
In each case of any adjustment in the Exercise Price,, or number or type of
shares issuable upon exercise of this Warrant, the Chief Financial Officer of
the Company shall compute such adjustment in accordance with the terms of the
Warrant and prepare a certificate setting forth such adjustment and showing in
detail the facts upon which such adjustment is based, including a statement of
the adjusted Exercise Price. The Company shall promptly send (by facsimile and
by either first class mail, postage prepaid or overnight delivery) a copy of
each such certificate to the Holder.
6. LOSS OR MUTILATION.
Upon receipt of evidence reasonably satisfactory to the Company of the
ownership of and the loss, theft, destruction or mutilation of the Warrant, and
of indemnity reasonably satisfactory to it, and (in the case if mutilation) upon
surrender and cancellation of the Warrant, the Company will execute and deliver
in lieu thereof a new Warrant of like tenor as the lost, stolen, destroyed or
mutilated Warrant.
7. RESERVATION OF COMMON STOCK.
The Company hereby covenants that at all times there shall be reserved for
issuance and delivery upon exercise of the Warrant such number of shares of
Common Stock or other shares of capital stock of the Company as are from time to
time issuable upon exercise of this Warrant and, form time to time, will take
all steps necessary to amend it Articles of Incorporation to provide sufficient
reserves of shares of Common Stock issuable upon exercise of this Warrant. All
such shares shall be dully authorized, and when issued upon such exercise, shall
be validly issued, fully paid and non-assessable, free and clear of all liens,
security interest, charges and other encumbrances or restrictions on sale and
free and clear of al preemptive rights, except encumbrances or restrictions
arising under federal or state securities laws. Issuance of this Warrant shall
constitute full authority to the Company's officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for shares of Common Stock upon the exercise of the Warrant.
8. TRANSFER AND EXCHANGE.
Subject to the terms and conditions of this Warrant and compliance with all
applicable securities laws, this Warrant and all rights hereunder may be
transferred, in whole or in part, on the books of the Company maintained for
such purpose at the principal office of the Company referred to above, by the
Registered Holder hereof in person, or by duly authorized attorney, upon
surrender of this Warrant properly endorsed and upon payment of any necessary
transfer tax or other governmental charge imposed upon such transfer. Upon any
permitted partial transfer, the Company will issue and deliver to the Registered
holder a new Warrant or Warrants with respect to the shares of Warrant Stock not
so transferred.
Each taker and holder of this Warrant, by taking or holding the same,
consents and agrees that when this Warrant shall have been so endorsed, the
person in possession of this Warrant may be treated by the Company, and all
other persons dealing with the Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby,
any notice to the contrary notwithstanding; provide, however that until a
transfer of the is Warrant is duly registered on the books of the Company, the
Company may treat the Registered Holder hereof as the owner for all purposes.
9. RESTRICTIONS OF TRANSFER.
The Holder, by acceptance hereof, agrees that, absent an effective
registration statement filed with U.S. Securities and Exchange Commission
("SEC") under the Act covering the disposition or sale of this Warrant or the
Warrant Stock issued or issuable upon exercise hereof, as the case may be, and
registration or qualification under applicable state securities laws, such
Holder will not sell, transfer pledge, or hypothecate or all such Warrants or
Warrant Stock, as the case may be, unless either (i) the Company has received an
of counsel to the effect that such registration is not required in connection
with such disposition or (ii) the sell of such securities is made pursuant to
SEC Rule 144.
10. COMPLIANCE WITH SECURITIES LAWS.
By acceptance of this Warrant, the holder hereby represents, warrants and
covenants that any shares of stock purchased upon exercise of this Warrant shall
be acquired for investment only and not with a view to, or for sale in
connection with, any distribution thereof, that the Holder has had such
opportunity as such Holder has deemed adequate to obtain from representative of
the Company such information as is necessary to permit the holder to evaluate
the merits and risks of its investment in the Company; that the Holder is able
to bear the economic risk of holding such shares as may be acquired pursuant to
the exercise of this Warrant for an indefinite period; that the Holder
understands that the shares of stock acquired pursuant to the exercise of the
Warrant will not be registered under the Act (unless otherwise required pursuant
to exercise by the holder of the registration rights, if any, previously granted
to the registered Holder) and will be 'restricted securities" within the meaning
of Rule 144 under the Act and that the exemption from registration under Rule
144 currently is not available for at least two years from the date of exercise
of this Warrant, subject to any special treatment by the Securities and Exchange
Commissioner for exercise of the Warrant pursuant to Section 2.2, and even then
will not be available unless a public market then exists for the stock, adequate
information concerning the Company is then available to the public, and other
terms and conditions of Rule 144 are complied with; and that all stock
certificates representing shares of stock issued to the Holder upon exercise of
this Warrant may have affixed thereto a legend substantially in the following
form:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE BEEN AND WILL
BE ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED ("THE ACT"), AND MAY NOT BE SOLD, OFFERED FOR SALE,
TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE
ACT UNLESS EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH
SUCH DISPOSITION OR (ii) THE SALE OF SUCH SECURITIES IS MADE PURSUANT
TO SECURITIES AND EXCHANGE COMMISSION RULE 144.
11. NO RIGHTS OR LIABILITIES AS SHAREHOLDERS.
This Warrant shall not entitle the Holder to any voting rights or
other rights as shareholder of the Company. In the absence of affirmative
action by such Holder to purchase Warrant Stock by exercise of this Warrant, no
provisions of this Warrant, and no enumeration herein of the rights or
privileges of the Holder hereof shall cause such Holder hereof to be a
shareholder of the Company for any purpose.
12. REGISTRATION RIGHTS.
All shares of Common Stock issuable upon exercise of this Warrant
shall be "Registrable Securities" and entitled, subject to the terms and
conditions to all registration rights granted to holders of Registrable
Securities. Holder shall gain registration rights twelve months subsequent to
the signing of this agreement. Such Registration shall be at Company's expense.
13. NOTICES.
All notices and other communications from the Company to the Holder
shall be given in accordance with Paragraph _____ of the Vanpires Production
Agreement.
14. HEADINGS.
The headings in this Warrant are for purposes of convenience in
reference only, and shall not be deemed to constitute a part hereof.
15. LAW GOVERNING.
This Warrant shall be construed and enforced in accordance with, and
governed by, the laws of the State of California.
16. NO IMPAIRMENT.
The Company will not, by amendment of its Articles of Incorporation or
bylaws, or through reorganization, consolidation, merger, dissolution, issue or
sale of securities, sale of assets or any other voluntary action, avoid or seek
to avoid the observance or performance of an 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 action as may be necessary or appropriate in order to
protect the rights of the Registered Holder of this Warrant against impairment.
Without limiting the generality of the foregoing, the Company (a) will not
increase the par value of any shares of stock issuable upon the exercise of this
Warrant above the amount payable therefor upon such exercise, and (b) will take
al such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and non-assessable shares of Warrant Stock
upon exercise of this Warrant.
17. NOTICE OF RECORD DATE, In case:
17.1 the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time receivable upon the exercise of
the Warrant) for the purpose of entitling them to receive any dividend or other
distribution, or any right to subscribe for or purchase any shares of stock of
any class of any other securities or to receive any other right; or
17.2 of any consolidation nor merger of the Company with or into
another corporation, any capital reorganization or the Company, any
reclassification of the Capital Stock of the Company, or any conveyance of al or
substantially all of the assets of the Company to another corporation in which
holders of the Company's stock are to receive stock, securities or property of
another corporation; or
17.3 of any voluntary dissolution, liquidation or wind-up of the
Company, or
17.4 of any redemption or conversion of all outstanding Common Stock;
then, and in each such case, the Company will mail or cause to be
mailed to the Registered Holder of this Warrant a notice specifying, as the case
may be, (i) the date on which a record is to be taken for the purpose of such
dividend, distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation,
winding-up, redemption or conversion is to take place, and the time, if any is
to be fixed, as to which the holders of record of Common Stock (or such stock or
securities as at the time are receivable upon the exercise of this Warrant)
shall be entitled to exchange their shares of Common Stock (or such other stock
or securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be delivered at least
thirty (30) days prior to the date therein specified.
18. SERVERABILITY.
If any term, provision, covenant or restriction of this Warrant is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidate.
19. COUNTERPARTS.
For the convenience of the parties, any number of counterparts of this
Warrant may be executed by the parties hereto and each such executed counterpart
shall be, and shall be deemed to be, an original instrument.
20. NO INCONSISTENT AGREEMENTS.
The Company will not on or after the date of this Warrant enter into
any agreement with respect to its securities which is inconsistent with the
rights granted to the Holders of this Warrant or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any
way conflict with and are not inconsistent with the rights granted to holders of
the Company's securities under any other agreements, except rights that have
been waived.
21. SATURDAYS, SUNDAYS, AND HOLIDAYS.
If the Expiration Date falls on a Saturday, Sunday or legal holiday,
The Expiration Date shall automatically be extended until 5:00 p.m. the next
business day.
[Download Table]
AGREED
ABRAMS GENTILE ENTERTAINMENT INC. MSH ENTERTAINMENT CORPORATION
/s/ JOHN GENTILE /s/ ROBERT MAERZ
--------------------------------- -----------------------------
Signature Signature
John Gentile Robert Maerz
--------------------------------- -----------------------------
Printed Name Printed Name
President Chairman
--------------------------------- -----------------------------
Title Title
11/1/96 11/1/96
--------------------------------- -----------------------------
Date Date
EXHIBIT 1
NOTICE OF EXERCISE
(To be executed upon exercise of Warrant)
MSH ENTERTAINMENT CORPORATION:
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
shares of Common Stock, as provided for therein, and (check the applicable box):
[_] Tenders herewith payment of the exercise price in full in the form of
cash or a certified or official bank check in same-day funds in the amount
of $________ for __________ shares of Common Stock.
[_] Elects the Net Issue Exercise option pursuant to Section 2.2 of the
Warrant, and accordingly requests delivery of a net of __________ shares of
Common Stock.
Please issue a certificate or certificates for such Common Stock in the name of,
and pay any cash for any fractional share to (please print name, address and
social security number):
Name: ____________________________________
Address: ____________________________________
Signature: ____________________________________
Note: The above signature should correspond exactly with the name of the first
page of this Warrant Certificate or with the name of the assignee appearing in
the assignment form below.
If said number of shares shall not be all the shares purchasable under the
within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder rounded up to the next higher whole number of shares.
EXHIBIT 2
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, hereby sells, assigns and transfers unto
______________________ the within Warrant Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
___________________________ attorney, to transfer said Warrant Certificate on
the books of the within-named Company with respect to the number of Warrants set
forth below, with full power of substitution in the premises:
Number of Warrants: _________________________________
Name of Recipient: _________________________________
Address of Recipient: _________________________________
_______________________________________________________
Number of Warrants: __________________________________
Name of Recipient: ___________________________________
Address of Recipient: _________________________________
_______________________________________________________
And if said number of Warrants shall not be all the Warrants represented by the
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the Warrants registered by said
Warrant Certificate.
Dated: ________________________________ 19__
Signature: _____________________________________
Notice: The signature to the foregoing Assignment must correspond to the name
as written upon the face of this security in every particular, without
alternation or any change whatsoever, signature(s) must be guaranteed by an
eligible guarantor institution (banks, stock brokers, saving and loan
associations and credit unions with membership in an approved signature
guarantee medallion program) pursuant to Securities and Exchange Commission Rule
17Ad-15.
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 10/8/00 | | 8 | | | | | None on these Dates |
| Filed on: | | 4/4/97 |
| | 1/12/97 | | 3 |
| | 11/21/96 | | 3 |
| | 10/8/96 | | 8 |
| List all Filings |
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