EXHIBIT 10.15
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT ("AGREEMENT") is made and entered
into as of September 4, 2001, by and between GLOBAL SPORTS & ENTERTAINMENT,
INC., a Delaware corporation (the "COMPANY") and XXXXXXX PARTNERS, L.P. (the
"INVESTOR").
For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and the Investor hereby agrees as follows:
1. SALE AND PURCHASE OF SHARES. Subject to the terms and conditions
hereof, the Company agrees to sell to the Investor, and the Investor agrees to
purchase from the Company, four hundred thousand (400,000) shares of the
Company's common stock, par value $.0001 per share (the "SHARES") at a purchase
price of $0.50 per Share for an aggregate purchase price of $200,000 (the
"PURCHASE PRICE").
2. WARRANT. To induce the Investor to enter into this Agreement and
purchase the Shares, the Company agrees to and hereby does grant the Investor a
warrant substantially in the form of EXHIBIT A attached hereto (the "WARRANT").
The Warrant will entitle the Investor to purchase an additional four hundred
thousand (400,000) shares of the Company's Common Stock at an exercise price of
one dollar (1.00) per share, subject to adjustment as set forth in the Warrant,
and will be exercisable, in whole or in part, at any time on or before August
31, 2004.
3. DELIVERY OF SHARES AND WARRANT. The Company acknowledges receipt of
the Purchase Price and agrees to issue and deliver the Shares and the Warrant to
the Investor as soon as reasonably practicable following the execution of this
Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. To induce the
Investor to enter into this Agreement and to purchase the Shares, the Company
hereby represents and warrants to the Investor:
4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of Delaware. The Company has all requisite corporate power and authority to
own and operate its properties and assets. The Company is duly qualified and is
authorized to do business and is in good standing as a foreign corporation in
all jurisdictions in which the nature of its activities and of its properties
(both owned and leased) makes such qualification necessary, except for those
jurisdictions in which failure to do so would not have a material adverse effect
on the business, assets, liabilities, financial condition, operations or
prospects of the Company.
4.2 CAPITALIZATION. The authorized capital stock of the
Company consists of (a) 50,000,000 shares of Common Stock, of which 24,820,817
shares are issued and outstanding, and (b) 5,000,000 shares of preferred stock,
of which 64,000 shares designated as Series C Preferred Stock, $.0001 par value,
are issued and outstanding. All issued and outstanding shares of the Company's
capital stock have been duly authorized, validly issued, and are fully paid and
nonassessable.
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4.3 AUTHORITY; BINDING OBLIGATIONS. The Company has all
requisite corporate power and authority to execute and deliver this Agreement,
the Shares and the Warrant and to perform its obligations hereunder and
thereunder and to issue the shares of Common Stock upon exercise of the Warrant.
All corporate action on the part of the Company necessary for the authorization
of this Agreement has been taken. This Agreement, when executed and delivered,
will be a valid and binding obligation of the Company.
4.4 OFFERING VALID. Assuming the accuracy of the
representations and warranties of the Investor contained in Section 7 hereof,
the offer, sale and issuance of the Shares and the Warrant will be exempt from
the registration requirements of the Securities Act of 1933, as amended, and
will have been registered or qualified (or are exempt from registration and
qualification) under the registration, permit or qualification requirements of
all applicable state securities laws.
5. REPRESENTATIONS OF THE INVESTOR. The Investor represents to the
Company that:
5.1 INVESTMENT INTENT. The Shares and the Warrant are being
acquired by the Investor for investment purposes only for the Investor's own
account and not with the view to, or for resale in connection with, any
distribution or public offering thereof. The Investor has no current plan or
intention to engage in a sale, exchange, transfer, distribution or other
disposition, directly or indirectly, of the Shares or the Warrant pursuant to
this Agreement. The Investor is able to bear the economic risk of his, her or
its investment and has the knowledge and experience in financial and business
matters that he, she or it is capable of evaluating the merits and risks of an
investment in the securities of the Company.
5.2 PRE-EXISTING RELATIONSHIP; NO GENERAL SOLICITATION. The
Investor has a preexisting personal or business relationship with the Company or
any one or more of its officers, directors or controlling persons and the
Investor's purchase of the Shares is not the result of any general solicitation
or general advertising, including, but not limited to (i) any advertisement,
article, notice or other communication published in any newspaper, magazine, the
internet or similar media or broadcast over television or radio; and (ii) any
seminar or meeting whose attendees have been invited by any general solicitation
or general advertising.
5.3 RESTRICTIONS ON RESALE, RULE 144. The Investor understands
that neither the Shares, the Warrant, nor the shares of Common Stock issuable
upon exercise thereof have been registered under the Securities Act or any state
securities laws by reason of their contemplated issuance in transactions exempt
from the registration requirements of the Securities Act pursuant to Section
4(2) thereof and applicable state securities laws, and that the reliance of the
Company and others upon these exemptions is predicated in part upon this
representation by the Investor. The Investor further understands that the
Shares, the Warrant, and the shares of Common Stock issuable upon exercise
thereof may not be transferred or resold without (a) registration under the
Securities Act and any applicable state securities laws, or (b) an exemption
from the requirements of the Securities Act and applicable state securities
laws. The Investor understands that an exemption from such registration is not
presently available pursuant to Rule 144 promulgated under the Securities Act by
the Securities and Exchange Commission (the "SEC") and that in any event the
Investor may not sell any securities acquired hereunder pursuant to Rule 144
prior to the expiration of a one-year period (or such shorter period as the SEC
may hereafter adopt) after the Investor has acquired such securities. The
Investor understands that any sales pursuant to Rule 144 can be made only in
full compliance with the provisions of Rule 144.
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5.4 LEGEND; STOP TRANSFER. The Shares and the Warrant and the
shares of Common Stock issuable thereunder issued pursuant to this Agreement
will bear a legend substantially similar to the following:
THE SECURITIES REPRESENTED BY THIS [CERTIFICATE/WARRANT] HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "securities ACT"). THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF A
CURRENT AND EFFECTIVE REGISTRATION STATEMENT UNDER THE securities ACT
WITH RESPECT TO SUCH SECURITIES, OR AN OPINION OF THE ISSUER'S COUNSEL
TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE securities
ACT.
The Company will make a notation regarding the restrictions on transfer
of the Shares and the Warrant and the shares of Common Stock issuable thereunder
in its books and the Shares and Warrant and the shares of Common Stock issuable
thereunder will be transferred on the books of the Company only if transferred
or sold pursuant to an effective registration statement under the Securities Act
covering the securities to be transferred or an opinion of counsel satisfactory
to the Company that such registration is not required.
5.5 DOMICILE, QUALIFICATION AS AN ACCREDITED INVESTOR. The
state in which the Investor's principal office (or domicile, if the Investor is
an individual) is located is the state set forth in such Investor's address on
the signature page hereto. The Investor by execution of this Agreement hereby
represents that he, she or it qualifies as an "accredited investor" for purposes
of Regulation D promulgated under the Securities Act. The Investor (i) is an
investor in securities of other companies of similar risk as the Company and
acknowledges that he, she or it is able to fend for himself, herself or itself,
and bear the loss of the Investor's entire investment in the Shares, the Warrant
and the shares of Common Stock issuable upon conversion or exercise thereof, and
(ii) has such knowledge and experience in financial and business matters that
the Investor is capable of evaluating the merits and risks of the investment to
be made by the Investor pursuant to this Agreement. If other than an individual,
each Investor also represents it has not been organized solely for the purpose
of acquiring the securities issued pursuant to this Agreement.
5.6 ACTS AND PROCEEDINGS. This Agreement has been duly
authorized by all necessary action on the part of the Investor, has been duly
executed and delivered by the Investor, and is a valid and binding agreement of
the Investor and enforceable against the Investor in accordance with its
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and to judicial limitations on the
remedy of specific enforcement and other equitable remedies.
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5.7 DISCLOSURE OF INFORMATION. The Investor represents that
the Company has made available to the Investor at a reasonable time prior to the
execution of this Agreement the opportunity to ask questions and receive answers
concerning the terms and conditions of the Shares and the Warrant and to obtain
any additional information about the Company (which the Company possesses or can
acquire without unreasonable effort or expense) as may be necessary to verify
the accuracy of information furnished to the Investor. The Investor has had an
opportunity to review the Company's reports filed with the SEC, which are
publicly available via the SEC's internet website at xxx.xxx.xxx, including (i)
the Company's Annual Report on Form 10-KSB for the fiscal year ended December
31, 2000, (ii) the Company's Quarterly Reports on Form 10-QSB for the quarters
ended March 31, 2001 and June 30, 2001, (iii) the Company's Current Report on
Form 8-K filed with the SEC on July 24, 2001, (iv) the Company's Information
Statement on Schedule 14C filed with the SEC on August 6, 2001 and (v) the
Company's Business Plan, dated August 1, 2001. The Investor has had a reasonable
opportunity prior to the execution of this Agreement to review the Company's
Business Plan, the financial statements contained in the Company's filings with
the SEC and to ask questions and receive answers concerning the financial
condition of the Company.
6. REGISTRATION RIGHTS.
6.1 If the Company at any time proposes to register any of its
securities under the Securities Act for sale to the public, whether for its own
account or for the account of other security holders or both (except with
respect to registration statements on Forms X-0, X-0 or another form not
available for registering the Company's Common Stock for sale to the public), it
will give written notice to each Investor of its intention to do so and will
give such notice not later than 20 days prior to the filing of any such
registration statement. Upon the written request of any Investor, received by
the Company within 10 days after the giving of any such notice by the Company,
to register any of the Company's Common Stock issuable upon conversion of the
Shares or exercise of the Warrant, or both ("REGISTRABLE SECURITIES"), the
Company will use its best efforts to cause the Registrable Securities as to
which registration is so requested to be included in the registration statement
proposed to be filed by the Company, all to the extent requisite to permit the
sale or other disposition by such Investor (in accordance with its written
request) of the Registrable Securities so registered ("PIGGY-BACK REGISTRATION
Rights"). The foregoing provisions notwithstanding, (i) the Company may withdraw
any registration statement referred to herein without thereby incurring any
liability to the Investors; (ii) the inclusion of shares of the Registrable
Securities under such Piggy-Back Registration Rights is subject to the cut-back
provisions of sections 6.2 hereof; and (iii) the Piggy-Back Registration Rights
will terminate one year from the date of this Agreement. The registration rights
provided herein may not be assigned or transferred.
6.2 If, in connection with a registration that involves an
underwriting, the representative(s) of the underwriters advises the Company in
writing that marketing factors require a limitation on the number of securities
to be included in such underwriting, the amount of Registrable Securities to be
offered will be reduced (or eliminated entirely) on a pro-rata basis among the
all other holders of Registrable Securities (including those held by the holders
of the Company's 5% Convertible Debentures) to the extent necessary to reduce
the total number of Registrable Securities to be included in such offering to
the amount recommended by such representative(s) of the underwriters.
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6.3 If any registration pursuant to this Section 6 is
underwritten in whole or in part, the Company will so advise the Investor in
writing. The right of any Investors to include the Registrable Securities in any
underwritten registration pursuant to this Section 6 will be conditioned upon
such Investor's participation in such underwriting and the inclusion of such
Investor's shares in the underwriting. The Investor (together with the Company
and any other selling shareholders) will enter into an underwriting agreement in
customary form with the underwriter or underwriters selected.
6.4 In connection with each registration hereunder, the
Investor will furnish to the Company in writing such information with respect to
such Investor and the proposed distribution by it as reasonably may be necessary
in order to assure compliance with the Securities Act and other applicable
federal and state securities laws. In addition, each Investor agrees that,
following the effective date of a Piggy-Back Registration, for the period of
time and to the extent reasonably requested by the Company or the
representative(s) of any underwriters, such Investor will not sell, offer to
sell, contract to sell (including, without limitation, any short sale), grant
any option to purchase or otherwise transfer or dispose of any securities of the
Company held by it, directly or indirectly, except securities covered by the
registration statement and transfers to donees who agree to be similarly bound.
6.5 All expenses incurred by the Company in complying with
this Section 6, including without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company and
independent public accountants for the Company, fees and expenses, including
counsel fees, incurred in connection with complying with state securities or
"blue sky" laws, fees of the National Association of Securities Dealers, Inc.,
transfer taxes, fees of transfer agents and registrars and costs of insurance
are called "REGISTRATION EXPENSES." All underwriting discounts and selling
commissions applicable to the sale of Registrable Securities, are called
"SELLING EXPENSES." The Company will pay all Registration Expenses in connection
with each registration statement relating to such Piggy-Back Registration
Rights, provided that the participating sellers will pay the fees and expenses
of their own counsel or accountants. All Selling Expenses in connection with
each registration statement under this Section 6 will be borne by the
participating sellers with respect to the number of shares sold by each.
6.6 The Company covenants that it will file the reports
require to be filed by it (if so required) under the Securities Act and the
Exchange Act and the Rules and Regulations adopted by the SEC thereunder in a
timely manner and, if at any time the Company is not required to file such
reports, it will, upon the request of any holder of Registrable Securities, make
publicly available other information so long as necessary to permit sales
pursuant to Rule 144 under the Securities Act. The Company further covenants
that it will take such further action as any holder of Registrable Securities
may reasonably request, all to the extent required from time to time to enable
such holder to sell Registrable Securities without registration under the
Securities Act pursuant to the exemptions provided by Rule 144 under the
Securities Act. Upon the request of any holder of Registrable Securities, the
Company will deliver to such holder a written statement as to whether it has
complied with such information requirements.
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6.7 The Piggy-Back Registration Rights granted pursuant to
this Section 6 may be terminated, waived or modified by the written consent of
the holders of at least a majority of the Registrable Securities (including
those held by the holders of the Company's 5% Convertible Debentures), provided
that no such termination, waiver or modification may be made that materially and
adversely affects the rights of any Investor in a manner different than the
other Investors without the written consent of that Investor. Any such
termination, waiver or modification effected in accordance with this paragraph
will be binding upon each holder of Registrable Securities at the time
outstanding, each future holder of all such securities and the Company.
7. MISCELLANEOUS.
7.1 WRITTEN CHANGES, WAIVERS, ETC. Neither this Agreement nor
any provision hereof may be changed, waived, discharged or terminated orally,
but only by a statement in writing signed by the party against which enforcement
of the change, waiver, discharge or termination is sought.
7.2 NOTICES. All notices, requests, consents and other
communications required or permitted hereunder, under the Shares and under the
Warrant will be in writing and will be delivered, or mailed first-class postage
prepaid, registered or certified mail to the Investor at the address listed on
the signature page hereto and if to the Company, to the attention of Xxxxxxx X.
Xxxxxx at Global Sports & Entertainment, Inc., 0000 X. Xxxxx Xxxx., Xxx Xxxxx,
Xxxxxx 00000. Such notices and other communications will for all purposes of
this Agreement be treated as being effective or having been given if delivered
personally, or, if sent by mail, when received. Any party may change its address
for such communications by giving notice thereof to the other parties in
conformity with this Section.
7.3 ENTIRE AGREEMENT. This Agreement, the exhibits hereto and
the documents referenced herein constitute the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof and
thereof and supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect hereto and thereto.
7.4 SEVERABILITY. Should any one or more of the provisions of
this Agreement or of any agreement entered into pursuant to this Agreement be
determined to be illegal or unenforceable, all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement,
will be given effect separately from the provision or provisions determined to
be illegal or unenforceable and will not be affected thereby.
7.5 SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided herein, the terms and conditions of this Agreement will inure to the
benefit of and be binding upon and be enforceable by the successors and assigns
of the parties hereto.
7.6 GOVERNING LAW. This Agreement will be governed by and
construed under the laws of the State of California.
7.7 COUNTERPARTS. This Agreement may be executed concurrently
in two or more counterparts, each of which will be deemed an original, but all
of which together will constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement is hereby executed as of the date first
written above.
COMPANY:
GLOBAL SPORTS & ENTERTAINMENT, INC.
By: /S/ XXXXXXX X. XXXXXX
-----------------------------------------
Xxxxxxx X. Xxxxxx,
President
INVESTOR:
XXXXXXX PARTNERS, L.P.
By: Xxxxxxx Investments, LLC
Its: General Partner
By: /S/ XXXXXXX X. XXXXXXX
--------------------------------
Xxxxxxx X. Xxxxxxx
Its: Managing Member
Address:
0000 Xxxx Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
(SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT)
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EXHIBIT A
TO COMMON STOCK PURCHASE AGREEMENT
THE WARRANTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). THE WARRANTS HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT WITH RESPECT TO SUCH WARRANTS, OR AN OPINION OF THE ISSUER'S
COUNSEL TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT.
COMMON STOCK PURCHASE WARRANT
-----------------------------
For the Purchase of up to 400,000 Shares of Common Stock,
$.0001 Par Value
of
GLOBAL SPORTS & ENTERTAINMENT, INC.
(a Delaware Corporation)
THIS CERTIFIES THAT, for value received, XXXXXXX PARTNERS, L.P. (the
"HOLDER"), as registered owner of this Warrant, is entitled to at any time or
from time to time before 5:00 p.m., Nevada time, on August 31, 2004 (the
"EXPIRATION TIME") but not thereafter, to subscribe for, purchase and receive up
to 400,000 fully paid and nonassessable shares of the $.0001 par value common
stock (the "COMMON STOCK"), of GLOBAL SPORTS & ENTERTAINMENT, INC., a Delaware
corporation (the "COMPANY"). The exercise price for such number of shares will
be $1.00 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."
This Warrant is delivered pursuant to a Common Stock Purchase
Agreement, dated September 4, 2001 (the "COMMON STOCK PURCHASE AGREEMENT"),
between the Company and the Holder relating to the purchase and sale of 400,000
shares of Common Stock (the "SHARES").
1. EXERCISE OF WARRANT. This Warrant may be exercised in whole or part
at any time and from time to time prior to the Expiration Time 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 the Expiration Time, this Warrant will become and be void without
further force or effect, and all rights represented hereby will 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 will proportionately reduce
the number of shares to be issued to the Holder). In the event of the exercise
in part only, the Company will 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.
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2. RIGHT OF REPURCHASE. The Company may redeem some or all of this
Warrant at a call price of $.01 per Warrant upon 30 days written notice if (i)
the Common Stock is listed for trading on any U.S. exchange, (ii) the last sale
price of the Common Stock on any U.S. exchange has equaled or exceeded $4.00 (as
adjusted from stock splits, combinations and similar recapitalizations) for 20
consecutive trading days, and (iii) the shares of Common Stock underlying the
Warrants are available for immediate resale under Rule 144 under the 1933 Act or
the Company has filed and achieved effectiveness of a registration statement
with the United Stated Securities and Exchange Commission for purposes of
registering the resale of the shares of Common Stock underlying the Warrant.
3. RIGHTS OF THE HOLDER. Holder will not be entitled to vote or receive
dividends or be deemed the holder of Common Stock or any other securities of the
Company that may at any time be issuable on the exercise hereof for any purpose,
nor will 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 has been exercised and
the Warrant Stock issuable upon the exercise hereof has become deliverable as
provided herein.
4. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SHARES.
(a) ADJUSTMENT FOR RECLASSIFICATIONS. If 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) have received, or, on or after the record date fixed
for the determination of eligible stockholders, 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,
will 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 will be adjusted proportionately.
(b) ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER. In
the event 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) consolidates or merges with another corporation
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(including any merger in which the Company is the survivor) or conveys 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, will 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 will be applicable to the shares of stock or
other securities or property receivable upon the exercise of this Warrant after
such consummation.
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:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF A
CURRENT AND EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT WITH
RESPECT TO SUCH SECURITIES, OR AN OPINION OF THE ISSUER'S COUNSEL TO
THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933 ACT.
6. REGISTRATION RIGHTS. The Holder is entitled to "piggy-back"
registration rights with respect to the shares of Common Stock issuable upon
exercise of this Warrant as provided in the Common Stock Purchase Agreement.
7. RESERVATION OF COMMON STOCK, ETC. There will be reserved, and the
Company will 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.
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8. CONVERTED WARRANT. At its option, the Holder may request pursuant to
this Section 8 that the Company exchange the Warrant or any portion thereof for
a particular number of shares of Warrant Stock by delivering to the Holder,
without payment by the Holder of the exercise price per share of any cash or
other consideration, that number of shares of Common Stock equal to the quotient
obtained by dividing the Net Value (as hereinafter defined) of the number of
shares of Warrant Stock with respect to which the Warrant is being exercised
(the "CONVERTED WARRANT SHARES") by the Fair Market Value (as determined (i) by
reference to the average of the last sales price, or bid price if there was no
sale, for the 20 most recent trading days if the Common Stock is publicly traded
or (ii) by the Board of Directors acting in good faith if the Common Stock is
not publicly traded) of a single share of Common Stock, determined in each case
as of the close of business on the date of exercise of the Warrant. The "Net
Value" of the Converted Warrant Shares will be determined by subtracting the
aggregate exercise price (per share) of the Converted Warrant Shares from the
aggregate Fair Market Value of the Converted Warrant Shares. All other
provisions of this Warrant will apply to any such exchange of this Warrant
pursuant to the terms of this Section 8.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer on this day of September, 2001.
GLOBAL SPORTS & ENTERTAINMENT, INC.
a Delaware corporation
By:
-----------------------------------
Xxxxxxx X. Xxxxxx,
President
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