Common Stock Purchase Warrant - Virtual Gaming Technologies Inc. and Unistar Entertainment Inc.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), AND SUCH SECURITY MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM
REGISTRATION AS CONFIRMED IN AN OPINION OF COUNSEL SATISFACTORY TO VIRTUAL
GAMING TECHNOLOGIES, INC., OR (2) PURSUANT TO A REGISTRATION STATEMENT FILED
UNDER THE 1933 ACT, AND IN EACH CASE IN ACCORDANCE WITH ANY OTHER APPLICABLE
LAW.
COMMON STOCK PURCHASE WARRANT
For the Purchase of up to 200,000 Shares of Common Stock,
$.00001 Par Value
of
VIRTUAL GAMING TECHNOLOGIES, INC.
(A Delaware Corporation)
THIS CERTIFIES THAT, for value received, UNISTAR ENTERTAINMENT, INC. (the
"Holder"), as registered owner of this Warrant, is entitled to at any time or
from time to time before 5:00 p.m., California Time, March 5, 2002, but not
thereafter, to subscribe for, purchase and receive 200,000 fully paid and
nonassessable shares of the $.00001 par value common stock (the "Common Stock"),
of VIRTUAL GAMING TECHNOLOGIES, INC., a Delaware corporation (the "Company").
The exercise price for such number of shares shall be $3.45 per share. The
number of shares of Common Stock deliverable hereunder, 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 Common Stock deliverable hereunder, as adjusted from time
to time, are hereinafter sometimes referred to as "Warrant Stock." The exercise
price of a share of Warrant Stock in effect at any time, and as adjusted from
time to time, is hereinafter sometimes referred to as the "Exercise Price."
1. Exercise of Warrant. This Warrant may be exercised by presentation and
surrender of this Warrant and payment by cashier's check of the Exercise Price
for such shares of Warrant Stock to the Company at the principal office of the
Company. If the subscription rights represented hereby are not exercised at or
before 5:00 P.M., California Time, on March 5, 2002, this Warrant shall become
and be void without further force or effect, and all rights represented hereby
shall cease and expire. This Warrant may be exercised in accordance with its
terms in whole or in part (payment of a portion of the Exercise Price shall
proportionately reduce the number of shares to be issued to the Holder). In the
event of the exercise in part only, the Company shall cause to be delivered to
the Holder a new Warrant of like tenor to this Warrant in the name of the Holder
evidencing the right of the Holder to purchase the number of shares of the
Warrant Stock purchasable hereunder as to which this Warrant has not been
exercised or assigned.
2. Right of Repurchase. This Warrant contains no express or mandatory
repurchase right or right of redemption.
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3. Rights of the Holder. Holder shall not be entitled to vote or receive
dividends or be deemed the holder of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise hereof for any
purpose, nor shall anything contained herein be construed to confer upon the
Holder of this Warrant, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matters
submitted to shareholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issue of stock,
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger, conveyance, or otherwise) or to receive dividends
or subscription rights or otherwise until this Warrant shall have been exercised
and the Warrant Stock issuable upon the exercise hereof shall have become
deliverable as provided herein.
4. Adjustments to Exercise Price and Number of Shares.
(a) Adjustment for Reclassifications. In case at any time or from
time to time after the issue date the holders of the Common Stock of the Company
(or any shares of stock or other securities at the time receivable upon the
exercise of this Warrant) shall have received, or, on or after the record date
fixed for the determination of eligible stockholders, shall have become entitled
to receive, without payment therefore, other or additional stock or other
securities or property (including cash) by way of stock-split, spinoff,
reclassification, combination of shares or similar corporate rearrangement
(exclusive of any stock dividend of its or any subsidiary's capital stock), then
and in each such case the Holder of this Warrant, upon the exercise hereof as
provided in Section 1, shall be entitled to receive the amount of stock and
other securities and property which such Holder would hold on the date of such
exercise if on the issue date he had been the holder of record of the number of
shares of Common Stock of the Company called for on the face of this Warrant and
had thereafter, during the period from the issue date, to and including the date
of such exercise, retained such shares and/or all other or additional stock and
other securities and property receivable by him as aforesaid during such period,
giving effect to all adjustments called for during such period. In the event of
any such adjustment, the Exercise Price shall be adjusted proportionately.
(b) Adjustment for Reorganization, Consolidation, Merger. In case of
any reorganization of the Company (or any other corporation the stock or other
securities of which are at the time receivable on the exercise of this Warrant)
after the issue date, or in case, after such date, the Company (or any such
other corporation) shall consolidate with or merge into another corporation or
convey all or substantially all of its assets to another corporation, then and
in each such case the Holder of this Warrant, upon the exercise hereof as
provided in Section 1 at any time after the consummation of such reorganization,
consolidation, merger or conveyance, shall be entitled to receive, in lieu of
the stock or other securities and property receivable upon the exercise of this
Warrant prior to such consummation, the stock or other securities or property to
which such Holder would be entitled had the Holder exercised this Warrant
immediately prior thereto, all subject to further adjustment as provided herein;
in each such case, the terms of this Warrant shall be applicable to the shares
of stock or other securities or property receivable upon the exercise of this
Warrant after such consummation.
(c) If at any time during the 18 months beginning March 6, 1997 the
Company shall issue shares of Common Stock for consideration of less than $3.00
per share of Common Stock, then the Exercise Price shall be decreased to an
amount determined by multiplying such Exercise Price in effect immediately prior
to the issuance date by a fraction, the denominator of which is the product of
the total number of shares of Common Stock outstanding immediately after such
issuance multiplied by three (3), and the numerator of which is the sum of (x)
the product of multiplying the number of shares of Common Stock outstanding
immediately prior to such issuance by three (3), plus (y) the dollar value of
the consideration received by the Company for such issued shares.
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5. Transfer to Comply with the Securities Act of 1933.
(a) This Warrant and the Warrant Stock or any other security issued
or issuable upon exercise of this Warrant may not be sold, transferred or
otherwise disposed of except to a person who, in the opinion of counsel for the
Company, is a person to whom this Warrant or such Warrant Stock may legally be
transferred without registration and without the delivery of a current
prospectus under the 1933 Act with respect thereto and then only against receipt
of an agreement of such person to comply with the provisions of this Section 5
with respect to any resale or other disposition of such securities.
(b) The Company may cause the following legend to be set forth on
each certificate representing Warrant Stock or any other security issued or
issuable upon exercise of this Warrant, unless counsel for the Company is of the
opinion as to any such certificate that such legend is unnecessary:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND SUCH SECURITY MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN
EXEMPTION FROM REGISTRATION AS CONFIRMED IN AN OPINION OF COUNSEL
SATISFACTORY TO VIRTUAL GAMING TECHNOLOGIES, INC., OR (2) PURSUANT TO A
REGISTRATION STATEMENT FILED UNDER THE 1933 ACT, AND IN EACH CASE IN
ACCORDANCE WITH ANY OTHER APPLICABLE LAW.
6. Reservation of Common Stock, Etc. There have been reserved, and the
Company shall at all times keep reserved, out of the authorized and unissued
shares of Common Stock, a number of shares sufficient to provide for the
exercise of this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer on this 5th day of March, 1997.
VIRTUAL GAMING TECHNOLOGIES, INC.
a Delaware corporation
By:/s/ Daniel B. Najor
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Daniel B. Najor,
Chief Executive Officer