NOTE AND WARRANT PURCHASE AGREEMENT
THIS NOTE AND WARRANT PURCHASE AGREEMENT (this "AGREEMENT") is made as
of the __ day of March, 2002 (the "EFFECTIVE DATE") by and among ZENASCENT,
INC., a Delaware corporation (the "COMPANY"), and [Purchaser] (the "PURCHASER").
RECITALS
WHEREAS, on March __, 2002, the Company became the parent of Xxxxxx
Xxxxxxx Boxing, Inc ("BOXING") in accordance with the Amended and Restated
Agreement and Plan of Merger, dated as of February 21, 2002 (the "MERGER
AGREEMENT"), by and among the Company, Zenascent Newco Inc., Boxing, Xxxxxx
Xxxxxxx Promotions, Ltd., Xxxxxx Xxxxxxx and Xxxxx XxXxxxxxx;
WHEREAS, as a result of the consummation of the transactions
contemplated by the Merger Agreement, the Company is engaged in the business of
boxing promotion and the acquisition, adaptation, selling, licensing and
marketing of boxing-related programming;
WHEREAS, the Company is in the process of organizing a private
placement of its equity securities pursuant to which the Company will seek to
raise a minimum of $700,000 and a maximum of $2.5 million (the "PRIVATE
PLACEMENT"); and
WHEREAS, it is intended that at the earlier of the closing of the
Private Placement or June 30, 2003, the outstanding principal amount of the Note
(as defined below) will be converted into either such equity securities as are
sold in the Private Placement or common stock of the Company, all as more fully
set forth in the Note.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto hereby agree as follows:
1. AMOUNT AND TERMS OF THE LOAN
1.1. THE LOAN. Subject to the terms of this Agreement, the Purchaser agrees
to lend to the Company an amount equal to $___________ and shall receive,
upon the making of such loan and in consideration therefor:
1.1.1. A promissory note in substantially the form attached hereto as
Exhibit A (the "NOTE"). The amount of the Note is referred to herein as
the "LOAN AMOUNT." Unless otherwise defined, the capitalized terms
herein shall have the meanings assigned to such terms in the Note; and
1.1.2. A warrant (the "WARRANT") to purchase [1/2 of the Loan Amount]
shares (the "WARRANT SHARE NUMBER") of common stock, par value $.001
per share, of the Company (the "Common Stock"). The Warrant shall be in
substantially the form attached hereto as Exhibit B. Prior to issuance
of the Warrant, the Purchaser
hereby agrees to pay to the Company the aggregate warrant purchase
price of $0.001 per share covered by the Warrant.
1.2. VALUE OF NOTE AND WARRANT. The Company and the Purchaser, having
adverse interests and as a result of arm's length bargaining, agree that:
1.2.1. Neither the Purchaser nor any affiliated company has rendered
any services to the Company in connection with this Agreement;
1.2.2. The Warrant is not being issued as compensation;
1.2.3. The aggregate fair market value of the Note, if issued apart
from the Warrant, is $[AMOUNT OF NOTE], and the aggregate fair market
value of the Warrant, if issued apart from the Note, is $0.001 per
share covered by the Warrant; and
1.2.4. All tax returns and other information return of each party
relative to this Agreement and the Note and the Warrant issued pursuant
hereto shall consistently reflect the matters agreed to in Sections
1.2.1 through 1.2.3 above.
2. THE CLOSING
2.1. CLOSING DATE. The closing of the purchase and sale of the Note and the
Warrant (the "CLOSING") shall be held on the Effective Date, or at such
other time as the Company and the Purchaser shall agree (the "CLOSING
DATE").
2.2. DELIVERY. At the Closing (i) the Purchaser will deliver to the Company
a check or wire transfer of funds in the amount of the Loan Amount; and (ii)
the Company shall issue and deliver to the Purchaser (a) a Note in favor of
the Purchaser payable in the principal amount of the Loan Amount and (b) a
Warrant issued in the name of Purchaser and exercisable for the Warrant
Share Number of shares of Common Stock.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as follows:
3.1. CORPORATE POWER. The Company has, and will have at the Closing Date,
all requisite corporate power to execute and deliver this Agreement and to
carry out and perform its obligations under the terms of this Agreement.
3.2. AUTHORIZATION. All corporate action on the part of the Company, its
directors and its stockholders necessary for the authorization, execution,
delivery and performance of this Agreement by the Company and the
performance of the Company's obligations hereunder, has been taken.
3.3. OFFERING. Assuming the accuracy of the representations and warranties
of the Purchaser contained in Section 4 hereof, the offer, issue, and sale
of the Notes and
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Warrants are and will be exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended (the "1933
ACT"), and 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.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as follows:
4.1. PURCHASE FOR OWN ACCOUNT. The Purchaser is acquiring the Note, the
equity securities into which the Note may be converted, the Warrant and the
Zenascent Common Stock issuable upon exercise of the Warrant (collectively,
the "SECURITIES") solely for its own account and beneficial interest for
investment and not for sale or with a view to distribution of the Securities
or any part thereof, has no present intention of selling (in connection with
a distribution or otherwise), granting any participation in, or otherwise
distributing the same, and does not presently have reason to anticipate a
change in such intention. The Purchaser understands that the Securities have
not been registered under the 1933 Act and applicable state securities laws
and, therefore, cannot be resold unless they are subsequently registered
under the 1933 Act and applicable state securities laws or unless an
exemption from such registration is available. The Purchaser further
understands and agrees that, until so registered or transferred pursuant to
the provisions of Rule 144 under the Securities Act, such securities shall
bear a legend, prominently stamped or printed thereon, reading substantially
as follows:
"These securities have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), or applicable state
securities laws. These securities have been acquired for investment
and not with a view to their distribution or resale, and may not be
sold, pledged, or otherwise transferred without an effective
registration statement for such securities under the Securities Act
and applicable state securities laws, or an opinion of counsel
satisfactory to the Corporation to the effect that such registration
is not required."
Such legend shall be removed when such securities may be sold pursuant to
Rule 144(k).
4.2. INFORMATION AND SOPHISTICATION. The Purchaser acknowledges that it has
made inquiry concerning the Company, its business, operations, financial
condition and its personnel and received all the information it has
requested from the Company that it considers necessary or appropriate for
deciding whether to acquire the Securities. The officers of the Company have
made available to the Purchaser any and all written information which the
Purchaser has requested and have answered to the Purchaser's satisfaction
all inquiries made by the Purchaser The Purchaser represents that it has had
an opportunity to ask questions and receive answers from
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the Company regarding the terms and conditions of the offering of the
Securities and to obtain any additional information necessary to verify the
accuracy of the information given the Purchaser. The Purchaser further
represents that it has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risk of
this investment and that the Purchaser has the capacity to protect its own
interests in connection with the purchase of the Securities by reason of the
Purchaser's business or financial experience.
4.3. ABILITY TO BEAR ECONOMIC RISK. The Purchaser acknowledges that
investment in the Securities involves a high degree of risk, and represents
that it is able, without materially impairing its financial condition, to
hold the Securities for an indefinite period of time and to suffer a
complete loss of its investment.
4.4. RISK. The Company's operations are subject to all of the risks inherent
in any early-stage business enterprise and the likelihood of the success of
the Company must be evaluated in light of various factors, including the
need for additional capital to fund the Company's activities, working
capital deficits, competition with established and well-financed entities,
the need for further refinements of the Company's products and services,
changes in technology, reliance on key personnel, changes in markets
generally for the Company's products and services, and changes and
uncertainties in the securities markets. There can be no assurance that the
Company will be able to generate sufficient revenues to support its
operations and/or achieve profitable results.
4.5. ACCREDITED INVESTOR STATUS. The Purchaser is an "ACCREDITED INVESTOR"
as such term is defined in Rule 501 under the Securities Act.
4.6. FURTHER ASSURANCES. The Purchaser agrees and covenants that at any time
and from time to time it will promptly execute and deliver to the Company
such further instruments and documents and take such further action as the
Company may reasonably require in order to carry out the full intent and
purpose of this Agreement.
5. MISCELLANEOUS
5.1. BINDING AGREEMENT. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any third party any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement.
5.2. GOVERNING LAW. This Agreement shall be governed by and construed under
the laws of the State of New York as applied to agreements among New York
residents, made and to be performed entirely within the State of New York.
5.3. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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5.4. TITLES AND SUBTITLES. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
5.5. NOTICES. Any notice required or permitted under this Agreement shall be
given in writing and shall be deemed effectively given upon personal
delivery or upon deposit with the United States Post Office, postage
prepaid, addressed to the Company at 0 Xxxxxxx Xxxxxxx, Xxxxxxxxxxx, Xxx
Xxxx 00000, or to the Purchaser at [ADDRESS OF PURCHASER], or at such other
address as such party may designate by ten (10) days advance written notice
to the other party.
5.6. MODIFICATION; WAIVER. No modification or waiver of any provision of
this Agreement or consent to departure therefrom shall be effective unless
in writing and approved by the Company and the Purchaser.
5.7. ENTIRE AGREEMENT. This Agreement and the Exhibits hereto constitute the
full and entire understanding and agreement between the parties with regard
to the subjects hereof and no party shall be liable or bound to any other in
any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein.
IN WITNESS WHEREOF, the parties have executed this NOTE AND WARRANT
PURCHASE AGREEMENT as of the date first written above.
COMPANY:
ZENASCENT, INC.
By:
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Name:
Title:
PURCHASER:
[PURCHASER]
By:
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Name:
Title:
