PROMISSORY NOTE PURCHASE AGREEMENT
EXHIBIT 4.4
PROMISSORY NOTE PURCHASE AGREEMENT
This PROMISSORY NOTE PURCHASE AGREEMENT is dated as of September 1, 2002 (this “AGREEMENT”) by and between TEAM SPORTS ENTERTAINMENT, INC., a Delaware corporation (the “COMPANY”), and the entities listed on EXHIBIT “A” hereto (each a “PURCHASER” and collectively, the “PURCHASERS”).
The parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF PROMISSORY NOTES
Section 1.1 PURCHASE AND SALE OF PROMISSORY NOTES. Upon the following terms and conditions, the Company shall issue and sell to the Purchasers, and the Purchasers shall purchase from the Company, secured convertible promissory notes in the aggregate principal amount of Two Million Five Hundred Thousand Dollars ($2,500,000.00) bearing interest at the rate of eight percent (8%) per annum, convertible into shares of the Company’s common stock, $.000l par value per share (the “COMMON STOCK”), in substantially the form attached hereto as EXHIBIT “B” (The “NOTES”), set forth with respect to such Purchaser on EXHIBIT “A” hereto. The Company and the Purchasers are executing and delivering this Agreement in accordance with and in reliance upon the exemption from securities registration afforded by Section 4(2) of the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “SECURITIES ACT”), including Regulation D (“REGULATION D”), and/or upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all of the investments to be made hereunder.
Section 1.2 PURCHASE PRICE AND CLOSING. The Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the Purchasers agree to purchase the Notes for an aggregate purchase price of Two Million Five Hundred Thousand Dollars ($2,500,000.00) (the “PURCHASE PRICE”). The closing (the “Closing”) of the execution and delivery of this Agreement shall occur upon delivery by facsimile of executed signature pages of this Agreement and all other documents, instruments and writings required to be delivered pursuant to this Agreement to G. Xxxxx Xxxxxx & Associates, P.C., 0000 Xxxx 00xx Xxxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000. The Closing shall take place no later than September 10, 2002. Funding with respect to the Closing shall take place by wire transfer of immediately available funds in the amounts shown on EXHIBIT “A”, on or prior to the Closing Date (as defined below), so long as the conditions set forth in ARTICLE IV hereof shall be fulfilled or waived in accordance herewith. The Closing shall take place at the offices of G. Xxxxx Xxxxxx & Associates, P.C. at 5:00 p.m. (Central time) upon the satisfaction of each of the conditions set forth in ARTICLE IV hereof (the “CLOSING DATE”).
Section 1.3 CONVERSION SHARES. The Company has authorized and has reserved and covenants to continue to reserve free of preemptive rights and other similar contractual rights of stockholders, a number of its authorized but unissued shares of Common Stock equal to at least
100% of the aggregate number of shares of Common Stock issuable at a conversion price equal to the Conversion Price (as defined in the Notes). Any shares of Common Stock issuable upon conversion of the Notes (and such shares when issued) are herein referred to as the “CONVERSION SHARES”. The Notes and the Conversion Shares are sometimes collectively referred to herein as the “SECURITIES.”
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. In order to induce the Purchasers to enter into this Agreement and to purchase the Notes and the Warrants, the Company hereby makes the following representations and warranties to the Purchasers:
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shares have been issued and are outstanding. All of the outstanding shares of the Company’s Common Stock and any other security of the Company have been duly and validly authorized. Except as set forth in this Agreement or on SCHEDULE 2.1(c), no shares of Common Stock or any other security of the Company are entitled to preemptive rights or registration rights and there are no outstanding options, warrants, scrip, rights to subscribe to, call or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company. Furthermore, except as set forth in this Agreement or on SCHEDULE 2.1(c) hereto, there are no contracts, commitments, understandings, or arrangements by which the Company is or may become bound to issue additional shares of the capital stock of the Company or options, securities or rights convertible into shares of capital stock of the Company. Except for customary transfer restrictions contained in agreements entered into by the Company in order to sell restricted securities or as provided on SCHEDULE 2.1(c) hereto, the Company is not a party to or bound by any agreement or understanding granting registration or anti-dilution rights to any person with respect to any of its equity or debt securities. Except as set forth on SCHEDULE 2.1(c), the Company is not a party to, and it has no knowledge of, any agreement or understanding restricting the voting or transfer of any shares of the capital stock of the Company. Except as set forth on SCHEDULE 2.1(c) hereto, the offer and sale of all capital stock, convertible securities, rights, warrants, or options of the Company issued prior to the Closing complied with all applicable federal and state securities laws, and no holder of such securities has a right of rescission or claim for damages with respect thereto which could have a Material Adverse Effect. The Company has made available to the Purchasers true and correct copies of the Company’s Articles of Incorporation as in effect on the date hereof (the “ARTICLES”), and the Company’s Bylaws as in effect on the date hereof (the “BYLAWS”).
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Company or any of its Subsidiaries is bound or by which any of their respective properties or assets are bound, or (iv) result in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries are bound or affected, except in all cases other than violations pursuant to clauses (i) or (iv) above, for such conflicts, defaults, terminations, amendments, acceleration, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect. The business of the Company and its Subsidiaries is not being conducted in violation of any laws, ordinances or regulations of any governmental entity, except for possible violations which singularly or in the aggregate do not and will not have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is required under federal, state, foreign or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under the Transaction Documents or issue and sell the Notes, and the Conversion Shares in accordance with the terms hereof or thereof (other than any filings which may be required to be made by the Company with the Commission, the OTCBB prior to or subsequent to the Closing, or state securities administrators subsequent to the Closing, or any registration statement which may be filed pursuant hereto).
(f) COMMISSION DOCUMENTS, FINANCIAL STATEMENTS. The Common Stock of the Company is registered pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the “EXCHANGE ACT”), and the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the Commission pursuant to the reporting requirements of the Exchange Act, including material filed pursuant to Section 13(a) or 15(d) of the Exchange Act (all of the foregoing including filings incorporated by reference therein being referred to herein as the “COMMISSION DOCUMENTS”). The Company has made available to the Purchasers true and complete copies of the Commission Documents filed with the Commission since June 30, 2002. At the time of its filing, the Form 10-QSB for the fiscal quarter ended June 30, 2002 (the “FORM 10-QSB”) complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder and other federal, state and local laws, rules and regulations applicable to such documents, and the Form 10-QSB did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the Commission Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements), and fairly present in all material respects the financial position of the Company and its Subsidiaries as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).
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the aggregate, would have a Material Adverse Effect as of the Closing Date. There are no outstanding orders, judgments, injunctions, awards or decrees of any court, arbitrator or governmental or regulatory body against the Company or any Subsidiary or any officers or directors of the Company or Subsidiary in their capacities as such, which individually or in the aggregate, would have a Material Adverse Effect as of the Closing Date.
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the Company’s board of directors, to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate actions are taken with respect to any differences.
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consistent with past practices; (ix) made capital expenditures or commitments therefor that aggregate in excess of $25,000; (x) entered into any other transaction other than in the ordinary course of business, or entered into any other material transaction, whether or not in the ordinary course of business; (xi) made charitable contributions or pledges in excess of $25,000; (xii) suffered any material damage, destruction or casualty loss, whether or not covered by insurance; (xiii) experienced any material problems with labor or management in connection with the terms and conditions of their employment; (xiv) effected any two or more events of the foregoing kind which in the aggregate would cause a Material Adverse Effect; or (xv) entered into an agreement, written or otherwise (other than the Transaction Documents), to take any of the foregoing action.
Section 2.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each of the Purchasers hereby makes the following representations and warranties to the Company with respect solely to itself and not with respect to any other Purchaser:
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knowledge and experience in financial and business matters such that Purchaser is capable of evaluating the merits and risks of Purchaser’s investment in the Company and is (ii) able to bear the financial risks associated with an investment in the Securities and (iii) that it has been given full access to such records of the Company and the Subsidiaries and to the officers of the Company and the Subsidiaries as it has deemed necessary or appropriate to conduct its due diligence investigation.
(d) RULE 144. Each Purchaser understands that the Securities must be held indefinitely unless such Securities are registered under the Securities Act or an exemption from registration is available. Each Purchaser acknowledges that such person is familiar with Rule 144 of the rules and regulations of the Commission, as amended, promulgated pursuant to the Securities Act (“RULE 144”), and that such Purchaser has been advised that Rule 144 permits resales only under certain circumstances. Each Purchaser understands that to the extent that Rule 144 is not available, such Purchaser will be unable to sell any Securities without either registration under the Securities Act or the existence of another exemption from such registration requirement.
(f) OPPORTUNITIES FOR ADDITIONAL INFORMATION. Each Purchaser acknowledges that such Purchaser has had the opportunity to ask questions of and receive answers from, or obtain additional information from, the executive officers of the Company concerning the financial and other affairs of the Company, and to the extent deemed necessary in light of such Purchaser’s personal knowledge of the Company’s affairs, such Purchaser has asked such questions and received answers to the full satisfaction of such Purchaser, and such Purchaser desires to invest in the Company.
(g) NO GENERAL SOLICITATION. Each Purchaser acknowledges that the Securities were not offered to such Purchaser by means of any form of general or public solicitation or general advertising or publicly disseminated advertisements or sales literature, including (i) any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media, or broadcast over television or radio, or (ii) any seminar or meeting to which such Purchaser was invited by any of the foregoing means of communications.
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ARTICLE III
The Company covenants with each Purchaser as follows, which covenants are for the benefit of each Purchaser and their respective permitted assignees:
Section 3.1 SECURITIES COMPLIANCE. The Company, if required, shall notify the Commission in accordance with their rules and regulations, of the transactions contemplated by any of the Transaction Documents and shall take all other necessary action and proceedings as may be required and permitted by applicable law, rule and regulation, for the legal and valid issuance of the Securities to the Purchasers, or their respective subsequent holders.
Section 3.2 COMPLIANCE WITH LAWS. The Company shall comply, and cause each Subsidiary to comply, with all applicable laws, rules, regulations and orders, noncompliance with which the Company reasonably expects would have a Material Adverse Effect.
Section 3.3 KEEPING OF RECORDS AND BOOKS OF ACCOUNT. The Company shall keep and cause each Subsidiary to keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, reflecting all financial transactions of the Company and its Subsidiaries, and in which, for each fiscal year, all proper reserves for depreciation, depletion, obsolescence, amortization, taxes, bad debts and other purposes in connection with its business shall be made.
Section 3.4 REPORTING REQUIREMENTS. The Company, upon request by the Purchaser, shall furnish one (1) copy of the following to the Purchasers in a timely manner so long as the Purchasers shall be obligated hereunder to purchase the Notes or shall beneficially own the Notes: (a) Quarterly Reports filed with the Commission on Form 10-QSB as soon as available, and in any event within fifty-one (51) days after the end of each of the first three (3) fiscal quarters of the Company; (b) Annual Reports filed with the Commission on Form 10-KSB as soon as available, and in any event within one hundred six (106) days after the end of each fiscal year of the Company; and (c) copies of all notices and information, including without limitation notices and proxy statements in connection with any meetings, that are provided to holders of shares of Common Stock, contemporaneously with the delivery of such notices or information to such holders of Common Stock.
Section 3.5 AMENDMENTS. The Company shall not amend or waive any provision of the Articles or Bylaws of the Company in any way that would adversely affect the exercise rights, voting rights, prepayment rights or redemption rights of the holder of the Notes provided, however, that the Company shall not be prohibited from amending its Articles to increase its authorized capital stock.
Section 3.6 OTHER AGREEMENTS. The Company shall not enter into any agreement in which the terms of such agreement would restrict or impair the right or ability to perform of the Company or any Subsidiary under any Transaction Document.
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Section 3.7 DISTRIBUTIONS. So long as any Notes remain outstanding, the Company agrees that it shall not, without the prior written consent of the holders of a majority of the principal amount of the Notes outstanding at the time consent is required, which consent may be granted or denied in the sole discretion of the Purchasers (i) declare or pay any dividends (other than a stock dividend or stock split) or make any distributions to any holder(s) of Common Stock or (ii) purchase or otherwise acquire for value, directly or indirectly, any Common Stock or other equity security of the Company.
Section 3.8 RESERVATION OF SHARES. So long as the Notes remain outstanding, the Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance (subject to Shareholder Approval if required), 100% of the aggregate number of shares of Common Stock issuable at a conversion price equal to the Conversion Price (as defined in the Notes). If at any time the number of shares of Common Stock authorized and reserved for issuance is below 100% of the Conversion Price (as defined in the Notes), the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including without limitation, calling a special meeting of shareholders to authorize additional shares to meet the Company’s obligations under this SECTION 3.8, in the case of an insufficient number of authorized shares, and using its best efforts to obtain shareholders’ approval of an increase in such authorized number of shares.
Section 3.9 DISPOSITION OF ASSETS. So long as the Notes remain outstanding, neither the Company nor any Subsidiary shall sell, transfer or otherwise dispose of any material amount of its properties, assets and rights including, without limitation, its intellectual property, to any person except for sales in the ordinary course of business, without the prior written consent of the holders of a majority of the principal amount of the NOTES then outstanding.
Section 3.10 SUBSEQUENT EQUITY FINANCINGS. So long as the Notes remain outstanding, upon the Company completing any equity financing for cash, the Company shall escrow 30% of the net equity proceeds for the benefit of the Purchasers (“EQUITY PROCEEDS”). On the due date of the Notes, the Company will distribute the Equity Proceeds as payment on the Notes to the Purchasers, on a pro rata basis, to the total Notes outstanding.
ARTICLE IV
Section 4.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO CLOSE AND TO SELL THE NOTES. The obligation hereunder of the Company to close and issue and sell the Notes to the Purchasers at the Closing Date is subject to the satisfaction or waiver, at or before the Closing of the conditions set forth below. These conditions are for the Company’s sole benefit and may be waived by the Company in writing at any time in its sole discretion.
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made as of a particular date, which shall be true and correct in all material respects as of such date.
(c) NO INJUNCTION. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
Section 4.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASERS TO CLOSE AND TO PURCHASE THE NOTES. The obligation hereunder of the Purchasers to purchase the Notes and consummate the transactions contemplated by this Agreement is subject to the satisfaction or waiver, at or before the Closing Date, of each of the conditions set forth below. These conditions are for the Purchasers’ sole benefit and may be waived by the Purchasers at any time in their sole discretion.
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seeking to restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages in connection with such transactions.
(i) MATERIAL ADVERSE EFFECT. No Material Adverse Effect shall have occurred.
ARTICLE V
Section 5.1 LEGEND. Each certificate representing the Notes, the Conversion Shares, shall be stamped or otherwise imprinted with a legend substantially in the following form (in addition to any legend required by applicable state securities or “BLUE SKY” laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR TEAM SPORTS ENTERTAINMENT, INC. SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
The Company agrees to reissue certificates representing any of the Securities, without the legend set forth above if at such time, prior to making any transfer of any such Securities, such holder thereof shall give written notice to the Company describing the manner and terms of such transfer and removal as the Company may reasonably request. Such proposed transfer will not be effected until: (a) the Company has notified such holder that either (i) in the opinion of Company counsel, the registration of the Notes, Conversion Shares, under the Securities Act is not required in connection with such proposed transfer; or (ii) a registration statement under the Securities Act covering such proposed disposition has been filed by the Company with the Commission and has become effective under the Securities Act; and (b) the Company has notified such holder that either (i) in the opinion of Company counsel, the registration or
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qualification under the securities or “BLUE SKY” laws of any state is not required in connection with such proposed disposition, or (ii) compliance with applicable state securities or “BLUE SKY” laws has been effected. The Company will use its best efforts to respond to any such notice from a holder within five (5) days. In the case of any proposed transfer under this SECTION 5, the Company will use reasonable efforts to comply with any such applicable state securities or “BLUE SKY” laws, but shall in no event be required, in connection therewith, to qualify to do business in any state where it is not then qualified or to take any action that would subject it to tax or to the general service of process in any state where it is not then subject. The restrictions on transfer contained in SECTION 5.1 shall be in addition to, and not by way of limitation of, any other restrictions on transfer contained in any other section of this Agreement.
ARTICLE VI
Section 6.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated at any time prior to the Closing Date by the mutual written consent of the Company and the Purchasers.
Section 6.2 EFFECT OF TERMINATION. If this Agreement is terminated as provided in SECTION 6.1 herein, this Agreement shall become void and of no further force and effect, except for SECTIONS 8.1 AND 8.2, and ARTICLE VII herein. Nothing in this SECTION 6.2 shall be deemed to release the Company or any Purchaser from any liability for any breach under this Agreement, or to impair the rights of the Company and such Purchaser to compel specific performance by the other xxxxx of its obligations under this Agreement.
ARTICLE VII
Section 7.1 GENERAL INDEMNITY. The Company agrees to indemnify and hold harmless each Purchaser (and its respective directors, officers, affiliates, agents, successors and assigns) from and against any and all losses, liabilities, deficiencies, costs, damages and expenses (including, without limitation, reasonable attorneys’ fees, charges and disbursements) incurred by each Purchaser as a result of any inaccuracy in or breach of the representations, warranties or covenants made by the Company herein. The Purchasers severally but not jointly agree to indemnify and hold harmless the Company and its directors, officers, affiliates, agents, successors and assigns from and against any and all losses, liabilities, deficiencies, costs, damages and expenses (including, without limitation, reasonable attorneys’ fees, charges and disbursements) incurred by the Company as a result of any inaccuracy in or breach of the representations, warranties or covenants made by the Purchasers herein.
Section 7.2 INDEMNIFICATION PROCEDURE. Any party entitled to indemnification under this ARTICLE VII (an “INDEMNIFIED PARTY”) will give written notice to the indemnifying party of any matters giving rise to a claim for indemnification; provided, that the failure of any party entitled to indemnification hereunder to give notice as provided herein shall not relieve the indemnifying party of its obligations under this ARTICLE VII except to the
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extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any action, proceeding or claim is brought against an indemnified party in respect of which indemnification is sought hereunder, the indemnifying party shall be entitled to participate in and, unless in the reasonable judgment of the indemnified party a conflict of interest between it and the indemnifying party may exist with respect to such action, proceeding or claim, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. In the event that the indemnifying party advises an indemnified party that it will contest such a claim for indemnification hereunder, or fails, within thirty (30) days of receipt of any indemnification notice to notify, in writing, such person of its election to defend, settle or compromise, at its sole cost and expense, any action, proceeding or claim (or discontinues its defense at any time after it commences such defense), then the indemnified party may, at its option, defend, settle or otherwise compromise or pay such action or claim. In any event, unless and until the indemnifying party elects in writing to assume and does so assume the defense of any such claim, proceeding or action, the indemnified party’s costs and expenses arising out of the defense, settlement or compromise of any such action, claim or proceeding shall be losses subject to indemnification hereunder. The indemnified party shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the indemnified party which relates to such action or claim. The indemnified party shall keep the indemnified party fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. If the indemnifying party elects to defend any such action or claim, then the indemnified party shall be entitled to participate in such defense with counsel of its choice at its sole cost and expense. The indemnifying party shall not be liable for any settlement of any action, claim or proceeding effected without its prior written consent. Notwithstanding anything in this ARTICLE VII to the contrary, the indemnifying party shall not, without the indemnified party’s prior written consent, settle or compromise any claim or consent to entry of any judgment in respect thereof which imposes any future obligation on the indemnified party or which does not include, as an unconditional term thereof, the giving by the claimant or the plaintiff to the indemnified party of a release from all liability in respect of such claim. The indemnification required by this ARTICLE VII shall be made by periodic payments of the amount thereof during the course of investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred, so long as the indemnified party irrevocably agrees to refund such moneys if it is ultimately determined by a court of competent jurisdiction that such party was not entitled to indemnification. The indemnity agreements contained herein shall be in addition to (a) any cause of action or similar rights of the indemnified party against the indemnifying party or others, and (b) any liabilities the indemnifying party may be subject to pursuant to the law.
ARTICLE VIII
Section 8.1 FEES AND EXPENSES. Each party shall pay the fees and expenses of its advisors, counsel, accountants and other experts, if any, and all other expenses, incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement, provided, however, that the Company shall pay such fees and expenses set forth on SCHEDULE 2.1(n) hereto.
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Section 8.2 SPECIFIC ENFORCEMENT; CONSENT TO JURISDICTION. (a) The Company and the Purchasers acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement or the other Transaction Documents were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement or the other Transaction Documents and to enforce specifically the terms and provisions hereof or thereof, this being in addition to any other remedy to which any of them may be entitled by law or equity. (b) The Company and each Purchaser (i) hereby irrevocably submit to the exclusive jurisdiction of the United States District Court sitting in the District of North Carolina and the courts of the State of North Carolina located in Mecklenburg County for the purposes of any suit, action or proceeding arising out of or relating to this Agreement or any of the other Transaction Documents or the transactions contemplated hereby or thereby and (ii) hereby waive, and agree not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. The Company and each Purchaser consent to process being served in any such suit, action or proceeding by mailing via certified mail, return receipt requested, a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this SECTION 8.2 shall affect or limit any right to serve process in any other manner permitted by law.
Section 8.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the Transaction Documents contain the entire understanding and agreement of the parties with respect to the matters covered hereby and, except as specifically set forth herein or in the other Transaction Documents, neither the Company nor any Purchaser make any representation, warranty, covenant or undertaking with respect to such matters, and they supersede all prior understandings and agreements with respect to said subject matters, all of which are merged herein. No provision of this Agreement may be waived or amended other than by a written instrument signed by the Company and the holders of at least a majority of the principal amount of the Notes then outstanding, and no provision hereof may be waived other than by a written instrument signed by the party against whom enforcement of any such amendment or waiver is sought. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Notes then outstanding. No consideration shall be offered or paid to any person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents or holders of Notes, as the case may be.
Section 8.4 NOTICES. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery by telecopy or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be: If to the Company: TEAM SPORTS ENTERTAINMENT, INC.
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Attention: Xxxxx Xxxxxx, President. If to any Purchaser: at the address of such Purchaser set forth on EXHIBIT A to this Agreement. Any party hereto may from time to time change its address for notices by giving at least ten (10) days written notice of such changed address to the other parties hereto.
Section 8.5 WAIVERS. No waiver by either party of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.
Section 8.6 HEADINGS. The article, section and subsection headings in this Agreement are for convenience only and shall not constitute a part of this Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof.
Section 8.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. After the Closing, the assignment by a party to this Agreement of any rights hereunder shall not affect the obligations of such party under this Agreement. Subject to applicable federal and state securities laws, the Purchasers may assign the Notes, the Warrants and their rights under this Agreement and the other Transaction Documents and any other rights hereto and thereto without the consent of the Company; provided, however, that any assignee shall first provide the Company with duly executed representations and warranties in the form contained in SECTION 2.2 of this Agreement.
Section 8.8 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person.
Section 8.9 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the internal laws of the State of North Carolina, without giving effect to the choice of law provisions. This Agreement shall not be interpreted or construed with any presumption against the party causing this Agreement to be drafted.
Section 8.10 SURVIVAL. The representations and warranties of the Company and the Purchasers contained in SECTION 2.1(m) should survive until the expiration of the applicable statutes of limitation, and those contained in ARTICLE II, with the exception of SECTION 2.1(m), shall survive the execution and delivery hereof and the Closing until the date three (3) years from the Closing Date, and the agreements and covenants set forth in ARTICLES I, III, V, VII AND VIII of this Agreement shall survive the execution and delivery hereof and the Closing hereunder.
Section 8.11 COUNTERPARTS. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and shall become effective when counterparts have been signed by each party and delivered to the other parties hereto, it being understood that all parties need not sign the same counterpart.
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Section 8.12 PUBLICITY. The Company agrees that it will not disclose, and will not include in any public announcement, the names of the Purchasers without the consent of the Purchasers, which consent shall not be unreasonably withheld or delayed, or unless and until such disclosure is required by law, rule or applicable regulation, and then only to the extent of such requirement.
Section 8.13 SEVERABILITY. The provisions of this Agreement are severable and, in the event that any court of competent jurisdiction shall determine that any one or more of the provisions or part of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement and this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum extent possible.
Section 8.14 FURTHER ASSURANCES. From and after the date of this Agreement, upon the request of the Purchasers or the Company, the Company and each Purchaser shall execute and deliver such instruments, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement, the Notes, the Warrants, the Security Agreement and the Registration Rights Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first above written.
COMPANY | ||||
TEAM SPORTS ENTERTAINMENT, INC. | ||||
By: |
||||
Xxxxx Xxxxxx, President | ||||
PURCHASERS | ||||
By: |
||||
Print Name: |
||||
By: |
||||
Print Name: |
||||
By: |
||||
Print Name: |
19
SCHEDULE 2.1(c)
OUTSTANDING OPTIONS
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TEAM SPORTS ENTERTAINMENT, INC.
OPTION LIST
AS OF AUGUST 30, 2002
Name |
Position |
Shares |
Price |
Date Exercisable |
||||||
Xxxxxx, Xxxxxxx |
Director |
500,000 2,500,000 |
$ $ |
1.000 0.350 |
12/1/2001 12/1/2001 |
| ||||
Xxxxxxxx, Xxxxx |
Director |
150,000 500,000 |
$ $ |
0.375 1.000 |
5/15/2001 12/12/2001 |
| ||||
Xxxxxxxxx, Xxx |
Director Employee |
500,000 166,666 166,667 |
$ $ $ |
1.000 1.000 1.000 |
12/12/2001 9/1/2001 3/1/2002 |
| ||||
Xxxxxxxxx, Xxxxxxx |
Advisory Director Employee |
250,000 83,333 83,333 83,334 |
$ $ $ $ |
1.000 1.000 1.000 1.000 |
12/12/2001 8/1/2001 12/1/2001 8/1/2002 |
| ||||
Xxxxx, Xxxxxxx |
Employee |
83,333 83,333 83,334 |
$ $ $ |
1.000 1.000 1.000 |
10/1/2001 4/1/2002 4/1/2003 |
** | ||||
Xxxxxxx, Xxxxxx |
Director |
500,000 1,000,000 |
$ $ |
1.000 0.375 |
12/12/2001 |
| ||||
Xxxxxxxx, Xxxxxxx |
Director |
500,000 |
$ |
1.000 |
12/12/2001 |
| ||||
Xxxxxxxxxx, Xxxx |
Director |
500,000 |
$ |
1.000 |
12/12/2001 |
| ||||
Xxxx, Xxxxx |
Director |
500,000 |
$ |
1.000 |
12/12/2001 |
| ||||
Xxxxxxxx, Xxxxxxx |
Director |
500,000 |
$ |
1.000 |
12/12/2001 |
| ||||
Xxxxxx, Xxxxxxx |
Advisory Director |
250,000 |
$ |
1.000 |
12/12/2001 |
| ||||
Xxxxxx, Xxxxxxx |
Advisory Director |
250,000 |
$ |
1.000 |
12/12/2001 |
| ||||
Xxxxx, Xxxx |
Advisory Director |
250,000 |
$ |
1.000 |
12/12/2001 |
| ||||
Xxxxxx, Xxxx |
Advisory Director |
250,000 |
$ |
1.000 |
12/12/2001 |
| ||||
Xxxxxxxxxx, Xxx |
Advisory Director |
250,000 |
$ |
1.000 |
12/12/2001 |
| ||||
Xxxxxx, Xxxxxx |
Advisory Director |
250,000 |
$ |
1.000 |
12/12/2001 |
| ||||
10,233,333 |
||||||||||
**Certain circumstances could accelerate the vesting date. |
||||||||||
Warrants |
14,488,500 |
$ |
1.000 |
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SCHEDULE 2.1(g)
SUBSIDIARY
Team Racing Auto Circuit, LLC, a Delaware Limited Liability Corporation
22
SCHEDULE 2.1(n)
Each Purchaser shall be entitled to a loan origination fee equal to 10% of the total Note purchased (“Origination Fee”). At the option of the Company, the Origination Fee may be paid by the Company by delivering four (4) shares of the Company’s Common Stock for every $1.00 owed in Origination Fees. The Common Shares delivered shall be subject to applicable 144 restrictions and will carry no registration rights.
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