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EXHIBIT 10.5
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID
ACT. THE EXERCISE OF THIS WARRANT IS SUBJECT TO COMPLIANCE WITH
APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
REVENGE MARINE, INC.
WARRANT TO PURCHASE 1,500,000 COMMON SHARES
THIS CERTIFIES THAT, for value received, BYC Acquisition Corporation is
entitled to subscribe for and purchase 1,500,000 of the fully paid and
nonassessable common shares (as adjusted pursuant to Section 2 hereof, the
"Shares") of Revenge Marine, Inc., a Nevada corporation (the "Company"), at the
price of $0.37 per Share (such price and such other price as shall result, from
time to time, from the adjustments specified in Section 2 hereof is herein
referred to as the "Warrant Price"), subject to the provisions and upon the
terms and conditions hereinafter set forth. Any permitted assignee of this
Warrant, by acceptance hereof, assumes and agrees to the rights and restrictions
set forth herein.
1. TERM. The purchase right represented by this Warrant is exercisable, in whole
or in part, at any time and from time to time from June 30, 1999 (the "Effective
Date") through April 30, 2002.
2. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES. The Warrant Price and the
number of Shares issuable upon the exercise of this Warrant shall be subject to
adjustment from time to time, and the Company agrees to provide notice upon the
happening of certain events as follows:
(a) RECLASSIFICATION, ETC. If the Company at any time shall, by
subdivision, combination or reclassification of securities, change any of the
securities to which purchase rights under this Warrant exist into the same or a
different number of securities of any class or classes, this Warrant shall
thereafter permit the holder hereof (the "Holder") to acquire such number and
kind of securities as would have been issuable as the result of such change with
respect to the securities which were subject to the purchase rights under this
Warrant immediately prior to such subdivision, combination or reclassification.
If shares of the class of the Company's capital stock for which this Warrant is
being exercised are subdivided or combined into a greater or smaller number of
shares, the Warrant Price shall be proportionately reduced in case of
subdivision of shares or proportionately increased in the case of combination of
shares, in both cases by the ratio which the total number of shares of such
class to be outstanding immediately after such event bears to the total number
of shares of such class outstanding immediately prior to such event.
(b) ADJUSTMENT FOR DIVIDENDS IN SHARES. In case at any time or from
time to time on or after the Effective Date the holders of the common shares of
the Company (or any other shares 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 shareholders, shall have become
entitled to receive, without payment therefor, other or additional shares of the
Company by way of dividend, then and in each case, the Holder shall, upon the
exercise hereof, be entitled to receive, in addition to the number of Shares
receivable thereupon, and without payment of any additional
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consideration therefor, the amount of such other or additional shares of the
Company which such Holder would hold on the date of such exercise had it been
the holder of record of such Shares on the Effective Date and had thereafter,
during the period from the Effective Date to and including the date of such
exercise, retained such shares and/or all other additional shares receivable by
it as aforesaid during such period, giving effect to all adjustments called for
during such period by paragraphs (a) and (b) of this Section 2.
(c) CERTIFICATE OF ADJUSTMENT. Whenever the Warrant Price or number or
type of securities issuable upon exercise of this Warrant is adjusted, as herein
provided, the Company shall promptly deliver to the record holder of this
Warrant a certificate of an officer of the Company setting forth the nature of
such adjustment and a brief statement of the facts requiring such adjustment.
3. NO STOCKHOLDER RIGHTS. This Warrant, by itself as distinguished from the
Shares purchasable hereunder, shall not entitle the Holder to any of the rights
of a shareholder of the Company until the Warrant is exercised and then only as
to the Warrant Shares so purchased.
4. AUTHORIZATION AND RESERVATION OF STOCK. The Company will reserve from its
authorized and unissued common shares a sufficient number of shares to provide
for the issuance of the Shares upon the exercise of this Warrant. Issuance of
this Warrant shall constitute full authority to the Company's officers who are
charged with the duty of executing certificates to execute and issue the
necessary certificates for the Shares upon the exercise of this Warrant.
5. EXERCISE OF WARRANT; NET EXERCISE.
(a) EXERCISE OF WARRANT. Subject to compliance with applicable federal
and state securities laws, this Warrant may be exercised in whole or in part by
the Holder at any time by the surrender of this Warrant, together with the
Notice of Exercise and Subscription Agreement attached hereto as Exhibits A and
B, respectively, duly completed and executed, at the principal office of the
Company, accompanied by payment in full of the Warrant Price in cash or by check
with respect to the Shares being purchased. This Warrant shall be deemed to have
been exercised immediately prior to the close of business on the date of its
surrender for exercise as provided above, and the person entitled to receive the
Shares issuable upon such exercise shall be treated for all purposes as the
Holder of such Shares of record as of the close of business on such date. As
promptly as practicable 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 full common shares issuable upon such exercise. Upon any
partial exercise of this Warrant, the Company will issue to the Holder a new
warrant for the number of the Shares as to which this Warrant was not exercised.
(b) FRACTIONAL SHARES. No fractional common shares will be issued in
connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall make a cash payment therefor based on the fair market value of
the common shares on the date of exercise as reasonably determined in good faith
by the Company's Board of Directors.
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6. TRANSFER OF WARRANT. This Warrant and the rights provided for herein may be
transferred or assigned by the Holder hereof in whole or in part, provided that:
(i) prior written notice is given to the Company and the transferor shall
provide, at the Company's reasonable request, an opinion of counsel reasonably
satisfactory to the Company that such transfer does not require registration
under the Securities Act of 1933, as amended; and (ii) this Warrant may be
transferred by the Holder hereof only to (a) an entity controlled by, which
controls, or which is under common control with the transferor or (b) another
entity which is at the time of transfer, or which becomes immediately
thereafter, a lender to the Company.
7. MISCELLANEOUS. This Warrant shall be governed by the internal laws of the
State of Michigan. The headings in this Warrant are for purposes of convenience
and reference only, and shall not be deemed to constitute a part hereof. Neither
this Warrant nor any term hereof may be changed, waived, discharged or
terminated orally but only by an instrument in writing signed by the Company and
the Holder. All notices and other communications from the Company to the holder
of this Warrant shall be delivered personally or mailed by first class mail,
postage prepaid, to the address furnished to the Company in writing by the last
holder of this Warrant who shall have furnished an address to the Company in
writing, and if mailed shall be deemed given three days after deposit in the
United States mail. The Company shall pay and hold the Holder harmless from
liability for the payment of fees and expenses (including the reasonable fees
and expenses of counsel) incurred in the enforcement of rights granted to the
Holder under this Warrant.
ISSUED June 30, 1999.
REVENGE MARINE, INC.
By:
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Its:
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Accepted and agreed to:
BYC ACQUISITION CORPORATION
By:
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Its:
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Exhibit A
NOTICE OF EXERCISE
TO: REVENGE MARINE, INC.
1. The undersigned hereby elects to purchase ________________ common
shares, of Revenge Marine, Inc. pursuant to the terms of the attached Warrant,
and tenders herewith payment of the purchase price in full.
2. Please issue a certificate or certificates representing said common
shares in the name of the undersigned or in such other name as is specified
below:
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(Name)
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(Address)
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(Date) (Name of Warrant Holder)
By:
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Its:
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(name of purchaser, and title and
signature of authorized person)
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Exhibit B
SUBSCRIPTION AGREEMENT