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EXHIBIT 10.5
[FORM OF STOCK OPTION AGREEMENT]
STOCK OPTION AGREEMENT
This Stock Option Agreement is made and entered into as of the
15TH day of FEBRUARY, 1996, by and between THE PRODUCERS ENTERTAINMENT GROUP
LTD., a Delaware corporation ("Company") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("Grantee").
1. Grant of Option. The Company wishing to provide Grantee
an opportunity to purchase shares of the Company's Common Stock par value,
$.001 per share ("Common Stock") hereby grants to Grantee and Grantee hereby
accepts an option to purchase 400,000 shares of Common Stock ("Option Shares")
which shall become vested immediately at a price of $0.50 per share ("Exercise
Price") on the terms and conditions stated herein.
2. Option Dates, Term of Option. Grantee shall be entitled
to purchase the Option Shares in whole or in part at any time and from time to
time prior to 5:00 p.m. Los Angeles time on the third anniversary from the date
on which the shares become vested.
3. Adjustments.
3.1 Subdivisions of Combinations. If, at any time
during the term hereof, the number of shares of Common Stock outstanding is
increased by a stock dividend payable in shares of Common Stock or by a
subdivision of split-up of shares of Common Stock, then, immediately following
the record date fixed for the determination of holders of Common Stock subject
to such stock dividend, subdivision or split-up, the number of shares of Common
Stock issuable upon exercise of this Option shall be increased and the Exercise
Price shall be decreased in proportion to such increase in outstanding shares.
If, at any time during the term hereof, the number of shares of Common Stock
outstanding is decreased by a combination of the outstanding shares of Common
Stock, then, immediately following the record day for such combination, the
number of shares of Common Stock issuable upon exercise of this Option shall be
decreased and the Exercise Price shall be increased in proportion to such
decrease in the outstanding shares.
3.2 Reorganization; Merger; Sale of Assets. If any
capital reorganization or reclassification of the capital stock of the Company,
or consolidation or merger of the Company with another corporation, or the sale
of all or substantially all of the Company's assets to another corporation
shall be effected in such a way that holders to Common Stock shall be entitled
to receive stock, securities or assets with respect to or in exchange for
Common Stock, then, as a condition of such
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reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby the holder of this Option shall
thereafter have the right to purchase and receive, upon exercise of this Option
and payment of the Exercise Price than in effect in lieu of the shares of the
Common Stock then subject to this Option such shares of stock, securities or
assets to which a holder of Common Stock deliverable upon exercise of this
Option would have been entitled on such capital reorganization,
reclassification, consolidation, merger or sale if this Option had been
exercised immediately before such event. In any such case appropriate
provision shall be made with respect to the rights and interests of the holder
of this Option to the end that the provisions hereof (including without
limitation provisions for adjustments of the Exercise Price and of the number
of shares purchasable upon the exercises of this Option) shall thereafter be
applicable, as nearly as may be practicable, in relation to any shares of
stock, securities or assets thereafter deliverable upon the exercise hereof.
3.3 Determination of Issuance Date in Certain Events. In
case the Company shall not set a record date of the holders of its Common Stock
with respect to a dividend or other distribution payable in Common Stock or a
subdivision, combination, reorganization, merger or other event specified in
this Section 3, then the record date shall be deemed to be the date of the
issuance of the shares of Common Stock deemed to have been issued or the
effective date of such subdivision, combination, reorganization, merger or
other event (as the case may be) specified in this Section 3.
3.4 Minimum Adjustment. The Exercise Price shall be subject
to adjustment from time to time as hereinabove provided. No adjustment shall
be made in an amount less than $.01 per share in the case of an adjustment to
the Exercise Price of one tenth of a share in the case of an adjustment to the
number or shares purchasable hereunder, but any such lesser adjustment shall be
carried forward and shall be made at the time and together with the next
subsequent adjustment which together with any adjustments so carried forward
shall amount to $.01 per share or more or one tenth of a share, as the case may
be; provided, however, no fractional shares shall be issuable hereunder. The
adjustment provisions hereunder shall similarly apply to successive
combinations, stock splits, reorganizations, reclassifications, consolidations
and mergers.
4. Registration of Company Options. Company shall file a
registration statement covering the shares of the underlying Company Options
granted to Grantee hereunder in the company's next registration statement.
Furthermore, Company shall use its best efforts to have said registration
statement become effective and to maintain such effectiveness, if necessary,
throughout the life of the All Options.
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5. Mechanics. This Option may be exercised by the Grantee by
giving written notice of exercise to the Company specifying the number of
shares to be purchased and the total purchase price, accompanied by payment of
such purchase price, in cash or by check payable to Company.
6. Withholding Taxes. Company shall have the right to require
Grantee to pay to Company any and all sums equal to any taxes which Company may
be required to withhold by reason of the Option or the Option Shares.
7. Rights Before Issuance and Delivery. Grantee shall not be
entitled to the privileges of stock ownership with respect to the Option Shares
unless and until such shares have been issued to Grantee as fully paid shares.
8. Sale or Disposition of Option Shares.
8.1 By accepting this Option, the Grantee represents that,
unless a registration statement under the Securities Act of 1933 is in effect
as to the Option Shares purchased upon any exercise of this Option, any and all
Option Shares so purchased shall be acquired for Grantee's account and not for
sale or for distribution, and each notice of the exercise of any portion of
this Option shall be accompanied by a representation and warranty in writing,
signed by Grantee that the Option Shares are being so acquired in good faith
for Grantee's account and not for sale or distribution.
8.2 All stock certificates representing shares of Option
Stock, if the Option is exercised, may bear a legend in a form substantially
similar to the following:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
HAVE BEEN ISSUED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR REGISTRATION
OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES
LAWS AND MAY NOT BE TRANSFERRED OR SOLD, IN THE
ABSENCE OF SUCH REGISTRATION AND QUALIFICATION OR
UNLESS AN EXEMPTION THEREFROM IS AVAILABLE."
9. Employment Obligation. Nothing in this Agreement shall be
construed to confer upon the Grantee any right to continued engagement by the
Company or its affiliates or to restrict in any way the right of the Company or
its affiliates to terminate Grantee's engagement or modify the terms and
conditions thereof.
10. Notices. Any notice to be give to the Company shall be
addressed to the Company at its principal office and any notice to be given to
the Grantee shall be addressed to it at the address given beneath the signature
hereto or at such other
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address as the Grantee may hereafter designate in writing to the Company. Any
such notice shall be deemed duly given when personally delivered or deposited
in the United States mail.
11. Applicable Law and Severability. This document shall, in all
respects, be governed by the laws of the State of California applicable to
agreements executed and to be wholly performed within the State of California.
Nothing contained herein shall be construed so as to require the commission of
any act contrary to law, and wherever there is any conflict between any
provision contained herein and any present or future statute, law, ordinance or
regulation contrary to which the parties have no legal right to contract, the
latter shall prevail but the provision of this document which is affected shall
be curtailed and limited only to the extent necessary to bring it within the
requirements of the law.
IN WITNESS WHEREOF, the parties have entered into this Stock
Option Agreement on the day and year first written above.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
______________________________
THE PRODUCERS ENTERTAINMENT GROUP LTD.,
a Delaware corporation
By_______________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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[FORM OF FINAL AGREEMENT]
February 15, 1996
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: THE PRODUCERS ENTERTAINMENT GROUP LTD. \ STOCK OPTION
AGREEMENT
Dear ▇▇▇▇▇▇:
Reference is hereby made to all Stock Purchase Agreements entered into by
either ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("Bibicoff") or Bibicoff & Associates ("B&A"), on one
hand, and either The Producers Entertainment Group Ltd. ("TPEG") or Ventura
Motion Picture Group Ltd. ("VMPG"), on the other, on various dates prior to the
date hereof (the "Existing Agreements").
In consideration of the mutual covenants and promises contained herein, as well
as, other good and valuable consideration, the sufficiency and receipt of which
is hereby acknowledged, Bibicoff and B&A agree to immediately terminate the
Existing Agreements and all rights granted to either Bibicoff or B&A
thereunder.
Contemporaneously, TPEG shall grant to Bibicoff the option to purchase 400,000
shares of TPEG common stock pursuant to a certain Stock Option Agreement Dated
February 15, 1996, attached hereto, and by this reference made a part hereof.
Bibicoff, B&A, TPEG and VMPG each hereby and forever release the other from and
against all claims, demands, or causes of action which were or could have been
asserted against the other party in connection with the Existing Agreements.
This release shall extend to the officers, directors, employees, attorneys,
agents, parents, affiliates, subsidiaries, successors and assigns of each of
the parties.
The parties acknowledge they have been advised by their legal counsel
of California Civil Code Section 1542, which provides as follows:
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▇▇. ▇▇▇▇▇▇▇▇
February 15, 1996
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"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
If the aforementioned is accepted and agreed to, please indicate such by
affixing your signature as indicated below, and together with ours shall
represent the complete Agreement.
Sincerely,
THE PRODUCERS ENTERTAINMENT GROUP LTD.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Accepted & Agreed:
Bibicoff & Associates
By:________________________
Its:_______________________
___________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/AHB
cc: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
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