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EXHIBIT 4.2
THE REPRESENTATIVE'S WARRANTS EVIDENCED AND REPRESENTED BY THIS CERTIFICATE (THE
"REPRESENTATIVE'S WARRANTS") AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
(THE "WARRANT SHARES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, PURSUANT TO A REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. HOWEVER, NEITHER THE REPRESENTATIVE'S WARRANTS NOR SUCH
WARRANT SHARES MAY BE SOLD, TRANSFERRED, PLEDGED, OR HYPOTHECATED EXCEPT
PURSUANT TO (i) A POST-EFFECTIVE AMENDMENT TO SUCH REGISTRATION STATEMENT, (ii)
A SEPARATE REGISTRATION STATEMENT UNDER SUCH ACT, OR (iii) AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT AND UNDER THE APPLICABLE BLUE SKY LAWS.
THIS REPRESENTATIVE'S WARRANT MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT AS
OTHERWISE PROVIDED HEREIN AND THE HOLDER OF THIS REPRESENTATIVE'S WARRANT, BY
ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS
REPRESENTATIVE'S WARRANT EXCEPT AS OTHERWISE PROVIDED HEREIN.
LET'S PLAY SPORTS, INC.
Representative's Warrant for the Purchase of Common Stock
No. UW-001 60,000 Representative's Warrants
THIS CERTIFIES that, for receipt in hand of $10 and other value received,
SCHNEIDER SECURITIES, INC. (the "Holder"), is entitled to subscribe for and
purchase from Let's Play Sports, Inc., a Colorado corporation (the "Company"),
upon the terms and conditions set forth herein, at any time, or from time to
time, from ______________, 2002, and before 5:00 p.m. Mountain time on
____________, 2006 (the "Exercise Period"), 60,000 shares of Common Stock (the
"Warrant Shares"), at a price of $7.98 per Warrant Share (the "Exercise Price"),
or 133% of the offering price of Common Stock sold by the Company in a public
offering (the "Public Offering") at or prior to the date hereof.
The term the "Holder" as used herein shall include any transferee to
whom this Representative's Warrant has been transferred in accordance with the
above. As used herein the term "this Representative's Warrant" shall mean and
include this Representative's Warrant and any Representative's Warrant or
Representative's Warrants hereafter issued as a consequence of the exercise or
transfer of this Representative's Warrant in whole or in part, and the term
"Common Stock" shall mean and include the Company's Common Stock with ordinary
voting power, which class at the date hereof is publicly traded.
1. This Representative's Warrant may not be sold, transferred, assigned,
pledged or hypothecated until _________, 2002 (12 months from the Effective Date
of the Registration
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Statement on which it is initially registered) except that it may be
transferred, in whole or in part, (i) to one or more officers or partners of the
Holder (or the officers or partners of any such partner); (ii) to a member of
the underwriting syndicate and/or its officers or partners; or (iii) by
operation of law. After _____________, 2002, this Representative's Warrant may
be sold, transferred, assigned or hypothecated in accordance with applicable
law.
2. a. This Representative's Warrant may be exercised during the Exercise
Period as to the whole or any lesser number of Warrant Shares, by the
surrender of this Representative's Warrant (with the election attached
hereto duly executed) to the Company at its office at 9606 Aero Drive,
Suite 1300, San Diego, California 92123, or such other place as is
designated in writing by the Company, together with a certified or bank
cashier's check payable to the order of the Company in an amount equal to
the Exercise Price multiplied by the number of Warrant Shares for which
this Representative's Warrant is being exercised.
b. Upon written request of the Holder, and in lieu of payment for the
Warrant Shares by check in accordance with paragraph 2(a) hereof, the
Holder may exercise the Representative's Warrant (or any portion thereof)
for and receive the number of Warrant Shares equal to a fraction, the
numerator of which equals (i) the amount by which the Current Market Price
of the Common Stock for the ten (10) trading days preceding the date of
exercise exceeds the Exercise Price per Share, multiplied by (ii) the
number of Warrant Shares to be purchased; the denominator of which equals
the Current Market Price.
c. For the purposes of any computation under this Representative's
Warrant, the "Current Market Price" at any date shall be the closing price
of the Common Stock on the business day next preceding the event requiring
an adjustment hereunder. If the principal trading market for such
securities is an exchange, the closing price shall be the reported last
sale price on such exchange on such day provided if trading of such Common
Stock is listed on any consolidated tape, the closing price shall be the
reported last sale price set forth on such consolidated tape. If the
principal trading market for such securities is the over-the-counter
market, the closing price shall be the last reported
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sale price on such date as set forth by The Nasdaq Stock Market, Inc., or,
if the security is not quoted on such market, the average of the closing
bid and asked prices as set forth in the National Quotation Bureau pink
sheets or the Electronic Bulletin Board System for such day.
Notwithstanding the foregoing, if there is no reported last sale price or
average closing bid and asked prices, as the case may be, on a date prior
to the event requiring an adjustment hereunder, then the current market
price shall be determined as of the latest date prior to such day for which
such last sale price or average closing bid and asked prices are available.
3. Upon each exercise of this Representative's Warrant, the Holder shall be
deemed to be the holder of record of the Warrant Shares issuable upon such
exercise, notwithstanding that the transfer books of the Company shall then be
closed or certificates representing such Warrant Shares shall not then have been
actually delivered to the Holder. As soon as practicable after each such
exercise of this Representative's Warrant, the Company shall issue and deliver
to the Holder a certificate or certificates for the Warrant Shares issuable upon
such exercise, registered in the name of the Holder or its designee. If this
Representative's Warrant should be exercised in part only, the Company shall,
upon surrender of this Representative's Warrant for cancellation, execute and
deliver a new Representative's Warrant evidencing the right of the Holder to
purchase the balance of the Warrant Shares (or portions thereof) subject to
purchase hereunder.
4. The Representative's Warrants shall be registered in a Representative's
Warrant Register as they are issued. The Company shall be entitled to treat the
registered holder of any Representative's Warrant on the Representative's
Warrant Register as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to or interest in such
Representative's Warrant on the part of any other person. The Representative's
Warrants shall be transferable only on the books of the Company upon delivery
thereof duly endorsed by the Holder or by its duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an attorney, executor,
administrator, guardian or other legal representative, duly authenticated
evidence of his or its authority shall be produced. Upon any registration of
transfer, the
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Company shall deliver a new Representative's Warrant or Representative's
Warrants to the person entitled thereto. The Representative's Warrants may be
exchanged, at the option of the Holder thereof, for another Representative's
Warrant, or other Representative's Warrants of different denominations, of like
tenor and representing in the aggregate the right to purchase a like number of
Warrant Shares (or portions thereof) upon surrender to the Company or its duly
authorized agent. Notwithstanding the foregoing, the Company shall have no
obligation to cause the Representative's Warrants to be transferred on its books
to any person if, in the opinion of counsel to the Company, such transfer does
not comply with the provisions of the Securities Act of 1933, as amended (the
"Act"), or applicable state blue sky laws and the rules and regulations
thereunder.
5. The Company shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of providing for
the exercise of this Representative's Warrant, such number of shares of Common
Stock as shall, from time to time, be sufficient therefor. The Company covenants
that all Warrant Shares issuable upon exercise of this Representative's Warrant
shall be validly issued, fully paid, nonassessable, and free of preemptive
rights.
6. a. If the Company shall at any time subdivide its outstanding Common
Stock by recapitalization, reclassification or split-up thereof, the number
of Warrant Shares subject to this Representative's Warrant immediately
prior to such subdivision shall be proportionately increased, and if the
Company shall at any time combine the outstanding Common Stock by
recapitalization, reclassification or combination thereof, the number of
Warrant Shares subject to this Representative's Warrant immediately prior
to such combination shall be proportionately decreased. Any corresponding
adjustment to the Exercise Price shall become effective at the close of
business on the record date for such subdivision or combination.
b. If the Company after the date hereof shall distribute to the
holders of its Common Stock any securities or other assets (other than a
distribution of Common Stock or a cash distribution made as a dividend
payable out of earnings or out of any earned surplus legally available for
dividends under the laws of the jurisdiction of
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incorporation of the Company), the Board of Directors shall be required to
make such equitable adjustment in the Exercise Price in effect immediately
prior to the record date of such distribution as may be necessary to
preserve the rights substantially proportionate to those enjoyed hereunder
by the Holder immediately prior to such distribution. Any such adjustment
made in good faith by the Board of Directors shall be final and binding
upon the Holder and shall become effective as of the record date for such
distribution.
c. No adjustment in the number of Warrant Shares subject to this
Representative's Warrant shall be required unless such adjustment would
require an increase or decrease in such number of Warrant Shares of at
least 1% of the then adjusted number of Warrant Shares issuable upon
exercise of this Representative's Warrant, provided, however, that any
adjustments which by reason of the foregoing are not required at the time
to be made shall be carried forward and taken into account and included in
determining the amount of any subsequent adjustment; and provided further,
however, that in case the Company shall at any time subdivide or combine
the outstanding Common Stock or issue any additional Common Stock as a
dividend, said percentage shall forthwith be proportionately increased in
the case of a combination or decreased in the case of a subdivision or
dividend of Common Stock so as to appropriately reflect the same. If the
Company shall make a record of the holders of its Common Stock for the
purpose of entitling them to receive any dividend or distribution and
legally abandon its plan to pay or deliver such dividend or distribution
then no adjustment in the number of Warrant Shares subject to this
Representative's Warrant shall be required by reason of the making of such
record.
d. Whenever the number of Warrant Shares purchasable upon the exercise
of this Representative's Warrant is adjusted as provided herein, the
Exercise Price shall be adjusted (to the nearest one tenth of a cent) by
respectively multiplying such Exercise Price immediately prior to such
adjustment by a fraction, the numerator of which shall be the number of
Warrant Shares purchasable upon the exercise of this Representative's
Warrant immediately prior to such adjustment, and the denominator of which
shall be the number of Warrant Shares purchasable immediately thereafter.
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e. In case of any reclassification of the outstanding Common Stock
(other than a change covered by (a) hereof or which solely affects the par
value of such Common Stock) or in the case of any merger or consolidation
of the Company with or into another corporation (other than a consolidation
or merger in which the Company is the continuing corporation and which does
not result in any reclassification or capital reorganization of the
outstanding Common Stock), or in the case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Representative's Warrant shall have the right
thereafter (until the expiration of the right of exercise of this
Representative's Warrant) to receive upon the exercise hereof, for the same
aggregate Exercise Price payable hereunder immediately prior to such event,
the kind and amount of shares of stock or other securities or property
receivable upon such reclassification, capital reorganization, merger or
consolidation, or upon the dissolution following any sale or other
transfer, by a holder of the number of Warrant Shares obtainable upon the
exercise of this Representative's Warrant immediately prior to such event;
and if any reclassification also results in a change in Common Stock
covered by (a) above, then such adjustment shall be made pursuant to both
this paragraph (e) and paragraph (a). The provisions of this paragraph (e)
shall similarly apply to successive re-classifications, or capital
reorganizations, mergers or consolidations, sales or other transfers.
If the Company after the date hereof shall issue or agree to issue
Common Stock, options or convertible securities, other than as described
herein, and such issuance or agreement would in the opinion of the Board of
Directors of the Company materially affect the rights of the Holders of the
Representative's Warrants, the Exercise Price and the number of Warrant
Shares purchasable upon exercise of the Representative's Warrants shall be
adjusted in such matter, if any, and at such time as the Board of Directors
of the Company, in good faith, may determine to be equitable in the
circumstances. The minutes or unanimous consent approving such action shall
set forth the Board of Director's determination as to whether an adjustment
is warranted and the
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manner of such adjustment. In the absence of such determination, any Holder
may request in writing that the Board of Directors make such determination.
Any such determination made in good faith by the Board of Directors shall
be final and binding upon the Holders. If the Board fails, however, to make
such determination within sixty (60) days after such request, such failure
shall be deemed a determination that an adjustment is required.
f. i. Upon occurrence of each event requiring an adjustment of the
Exercise Price and of the number of Warrant Shares purchasable upon
exercise of this Representative's Warrant in accordance with, and as
required by, the terms hereof, the Company shall forthwith employ a firm of
certified public accountants (who may be the regular accountants for the
Company) who shall compute the adjusted Exercise Price and the adjusted
number of Warrant Shares purchasable at such adjusted Exercise Price by
reason of such event in accordance herewith. The Company shall give to each
Holder of the Representative's Warrants a copy of such computation which
shall be conclusive and shall be binding upon such Holders unless contested
by Holders by written notice to the Company within thirty (30) days after
receipt thereof.
ii. In case the Company after the date hereof shall propose (A) to pay
any dividend payable in stock to the holders of its Common Stock or to make
any other distribution (other than cash dividends) to the holders of its
Common Stock or to grant rights to subscribe to or purchase any additional
shares of any class or any other rights or options to holders of its Common
Stock, (B) to effect any reclassification involving merely the subdivision
or combination of outstanding Common Stock, or (C) any capital
reorganization or any consolidation or merger, or any sale, transfer or
other disposition of its property, assets and business substantially as an
entirety, or the liquidation, dissolution or winding up of the Company,
then in each such case, the Company shall obtain the computation described
above and if an adjustment to the Exercise Price is required, the Company
shall notify the Holders of the Representative's Warrants
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of such proposed action, which shall specify the record date for any such
action or if no record date is established with respect thereto, the date
on which such action shall occur or commence, or the date of participation
therein by the holders of Common Stock if any such date is to be fixed, and
shall also set forth such facts with respect thereto as shall be reasonably
necessary to indicate the effect of such action on the Exercise Price and
the number, or kind, or class of shares or other securities or property
obtainable upon exercise of this Representative's Warrant after giving
effect to any adjustment which will be required as a result of such action.
Such notice shall be given at least twenty (20) days prior to the record
date for determining holders of the Common Stock for purposes of any such
action, and in the case of any action for which a record date is not
established then such notice shall be mailed at least twenty (20) days
prior to the taking of such proposed action.
iii. Failure to file any certificate or notice or to give any notice,
or any defect in any certificate or notice, shall not effect the legality
or validity of the adjustment in the Exercise Price or in the number, or
kind, or class of shares or other securities or property obtainable upon
exercise of the Representative's Warrants or of any transaction giving rise
thereto.
g. The Company shall not be required to issue fractional Warrant Shares
upon any exercise of the Representative's Warrants. As to any final fraction of
a Share which the Holder of a Representative's Warrant would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash adjustment
in respect of such final fraction in an amount equal to the same fraction of the
market price of a share of such stock on the business day preceding the day of
exercise. The Holder of a Representative's Warrant, by his acceptance of a
Representative's Warrant, expressly waives any right to receive any fractional
Warrant Shares.
h. Regardless of any adjustments pursuant to this section in the Exercise
Price or in the number, or kind, or class of shares or other securities or other
property obtainable upon exercise of a Representative's Warrant, a
Representative's Warrant may
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continue to express the Exercise Price and the number of Warrant Shares
obtainable upon exercise at the same price and number of Warrant Shares as
are stated herein.
i. The number of Warrant Shares, the Exercise Price and all other
terms and provisions of the Company's agreement with the Holder of this
Representative's Warrant shall be determined exclusively pursuant to the
provisions hereof.
j. The above provisions of this section 6 shall similarly apply to
successive transactions which require adjustments.
k. Notwithstanding any other language to the contrary herein, (i) the
anti-dilution terms of this Representative's Warrant will not be enforced
so as to provide the Holder the right to receive, or for the accrual of,
cash dividends prior to the exercise of this Representative's Warrant, and
(ii) the anti-dilution terms of this Representative's Warrant will not be
enforced in such a manner as to provide the Holder with disproportionate
rights, privileges and economic benefits not provided to purchasers of the
Common Stock in the Public Offering.
7. The issuance of any Warrant Shares or other securities upon the exercise
of this Representative's Warrant and the delivery of certificates or other
instruments representing such securities, or other securities, shall be made
without charge to the Holder for any tax or other charge in respect of such
issuance. The Company shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue and delivery of any
certificate in a name other than that of the Holder and the Company shall not be
required to issue or deliver any such certificate unless and until the person or
persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
8. a. If, at any time after _______________, 2001 (the Effective Date
of the Registration Statement), and ending ____________, 2008 (seven years
after the Effective Date of the Registration Statement), the Company shall
file a registration statement (other than on Form S-4, Form S-8, or any
successor form) with the Securities and Exchange Commission (the
"Commission") while Warrant Shares are available for purchase upon exercise
of this Representative's Warrant or while any Warrant Shares
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(collectively, the Representative's Warrants and the underlying Warrant
Shares, the "Representative's Securities") are outstanding, the Company
shall, on two occasions only, give the Holder and all the then holders of
such Representative's Securities at least 30 days prior written notice of
the filing of such registration statement. If requested by the Holder or by
any such holder in writing within 20 days after receipt of any such notice,
the Company shall, at the Company's sole expense (other than the fees and
disbursements of counsel for the Holder or such holder and the underwriting
discounts, if any, payable in respect of the securities sold by the Holder
or any such holder), register or qualify the Representative's Securities of
the Holder or any such holders who shall have made such request
concurrently with the registration of such other securities, all to the
extent requisite to permit the public offering and sale of the
Representative's Securities requested to be registered, and will use its
best efforts through its officers, directors, auditors and counsel to cause
such registration statement to become effective as promptly as practicable.
Notwithstanding the foregoing, if the managing underwriter of any such
offering shall advise the Company in writing that, in its opinion, the
distribution of all or a portion of the Representative's Securities
requested to be included in the registration concurrently with the
securities being registered by the Company would materially adversely
affect the distribution of such securities by the Company for its own
account, then the Holder or any such holder who shall have requested
registration of his or its Representative's Securities shall delay the
offering and sale of such Representative's Securities (or the portions
thereof so designated by such managing underwriter) for such period, not to
exceed 90 days, as the managing underwriter shall request, provided that no
such delay shall be required as to any Representative's Securities if any
securities of the Company are included in such registration statement for
the account of any person other than the Company and the Holder unless the
securities included in such registration statement for such other person
shall have been reduced pro rata to the reduction of the Representative's
Securities which were requested to be included in such registration.
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b. If at any time after ___________, 2001 (the Effective Date of
the Registration Statement), and before ___________, 2006 (five years
after the Effective Date of the Registration Statement), the Company
shall receive a written request from holders of Representative's
Securities who, in the aggregate, own (or upon exercise of all
Representatives Warrants will own) a majority of the total number of
Warrant Shares, the Company shall, as promptly as practicable, prepare
and file with the Commission a registration statement sufficient to
permit the public offering and sale of the Representative's
Securities, and will use its best efforts through its officers,
directors, auditors and counsel to cause such registration statement
to become effective as promptly as practicable; provided, however,
that the Company shall only be obligated to file and obtain
effectiveness of one such registration statement for which all
expenses incurred in connection with such registration (other than the
fees and disbursements of counsel for the Holder or such holders and
underwriting discounts, if any, payable in respect of the
Representative's Securities sold by the Holder or any such holder)
shall be borne by the Company.
c. In the event of a registration pursuant to the provisions of
this paragraph 8, the Company shall use its best efforts to cause the
Representative's Securities so registered to be registered or
qualified for sale under the securities or blue sky laws of such
jurisdictions as the Holder or such holders may reasonably request;
provided, however, that the Company shall not be required to qualify
to do business in any state by reason of this paragraph 8(c) in which
it is not otherwise required to qualify to do business and provided
further, that the Company has no obligation to qualify the
Representative's Securities where such qualification would cause any
unreasonable delay or expenditure by the Company.
d. The Company shall keep effective any registration or
qualification contemplated by this paragraph 8 and shall from time to
time amend or supplement each applicable registration statement,
preliminary prospectus, final prospectus, application, document and
communication for such period of time as shall be required to permit
the Holder or such holders to complete the offer and sale of the
Representative's Securities
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covered thereby. The Company shall in no event be required to keep any
such registration or qualification in effect for a period in excess of
nine months from the date on which the Holder and such holders are
first free to sell such Representative's Securities; provided,
however, that if the Company is required to keep any such registration
or qualification in effect with respect to securities other than the
Representative's Securities beyond such period, the Company shall keep
such registration or qualification in effect as it relates to the
Representative's Securities for so long as such registration or
qualification remains or is required to remain in effect in respect of
such other securities.
e. In the event of a registration pursuant to the provisions of
this paragraph 8, the Company shall furnish to the Holder and to each
such holder such reasonable number of copies of the registration
statement and of each amendment and supplement thereto (in each case,
including all exhibits), such reasonable number of copies of each
prospectus contained in such registration statement and each
supplement or amendment thereto (including each preliminary
prospectus), all of which shall conform to the requirements of the Act
and the rules and regulations thereunder, and such other documents as
the Holder or such holders may reasonably request in order to
facilitate the disposition of the Representative's Securities included
in such registration.
f. In the event of a registration pursuant to the provisions of
this paragraph 8, the Company shall furnish the Holder and each holder
of any Representative's Securities so registered with an opinion of
its counsel to the effect that (i) the registration statement has
become effective under the Act and no order suspending the
effectiveness of the registration statement, preventing or suspending
the use of the registration statement, any preliminary prospectus, any
final prospectus, or any amendment or supplement thereto has been
issued, nor to such counsel's actual knowledge has the Securities and
Exchange Commission or any securities or blue sky authority of any
jurisdiction instituted or threatened to institute any proceedings
with respect to such an order and (ii) the registration statement and
each prospectus forming a part thereof (including each preliminary
prospectus), and any amendment or supplement thereto,
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complies as to form with the Act and the rules and regulations thereunder.
Such counsel shall also provide a Blue Sky Memorandum setting forth the
jurisdictions in which the Representative's Securities have been registered
or qualified for sale pursuant to the provisions of paragraph 8(c).
g. The Company agrees that until all the Representative's Securities
have been sold under a registration statement or pursuant to Rule 144 under
the Act, it shall keep current in filing all reports, statements and other
materials required to be filed with the Commission to permit holders of the
Representative's Securities to sell such securities under Rule 144.
h. The Holder and any holders who propose to register their
Representative's Securities under the Act shall execute and deliver to the
Company a selling stockholder questionnaire on a form to be provided by the
Company.
i. The Company shall not be required by the terms hereof to file a
Registration Statement if, in the opinion of counsel to the holders of the
Representative's Warrants and Warrant Shares and counsel for the Company
(or, should they not agree, in the opinion of another counsel experienced
in securities law matters acceptable to counsel for the holders of
Representative's Warrants and Warrant Shares and the Company), the proposed
public offering or other transfer as to which such Registration Statement
is requested to be filed is exempt from applicable federal and state
securities laws, rules, regulations and would result in unaffiliated
purchasers or transferees obtaining securities that are not "restricted
securities" as that term is defined in Rule 144 under the Act.
9. a. Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless the Holder, any holder of any of the
Representative's Securities, their officers, directors, partners, employees,
agents and counsel, and each person, if any, who controls any such person within
the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), from and against any and all loss,
liability, charge, claim, damage and expense whatsoever (which shall include,
for all purposes of this Section 9, but not be limited to,
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attorneys' fees, expert witness fees, and any and all expense whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), as and when incurred, arising out of,
based upon, or in connection with (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any registration statement,
preliminary prospectus or final prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto, or (B) in any application
or other document or communication (in this Section 9 collectively called an
"application") executed by or on behalf of the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to register or qualify any of the Representative's Securities under the
securities or blue sky laws thereof or filed with the Commission or any
securities exchange; or any omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, unless such statement or omission was made in reliance upon and
in conformity with written information furnished to the Company with respect to
the Holder or any holder of any of the Representative's Securities by or on
behalf of such person expressly for inclusion in any registration statement,
preliminary prospectus, or final prospectus, or any amendment or supplement
thereto, or in any application, as the case may be, or (ii) any breach of any
representation, warranty, covenant or agreement of the Company contained in this
Representative's Warrant. The foregoing agreement to indemnify shall be in
addition to any liability the Company may otherwise have, including liabilities
arising under this Representative's Warrant.
If any action is brought against the Holder or any holder of any of the
Representative's Securities or any of its officers, directors, partners,
employees, agents or counsel, or any controlling persons of such person (an
"indemnified party") in respect of which indemnity may be sought against the
Company pursuant to the foregoing paragraph, such indemnified party or parties
shall promptly notify the Company in writing of the institution of such action
(but the failure so to notify shall not relieve the
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Company from any liability it may otherwise have to Holder or any holder of any
of the Representative's Securities) and the Company shall promptly assume the
defense of such action, including the employment of counsel (reasonably
satisfactory to such indemnified party or parties) and payment of expenses. Such
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless the employment of such
counsel shall have been authorized in writing by the Company in connection with
the defense of such action or the Company shall not have promptly employed
counsel reasonably satisfactory to such indemnified party or parties to have
charge of the defense of such action or such indemnified party or parties shall
have reasonably concluded that there may be one or more legal defenses available
to it or them or to other indemnified parties which are different from or
additional to those available to the Company, in any of which events such fees
and expenses shall be borne by the Company and the Company shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties. Anything in this paragraph to the contrary notwithstanding, the Company
shall not be liable for any settlement of any such claim or action effected
without its written consent.
b. The Holder and each holder agrees to indemnify and hold harmless
the Company, each director of the Company, each officer of the Company who shall
have signed any registration statement covering the Representative's Securities
held by the Holder and each holder and each other person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
the Holder and each holder in paragraph 9(a), but only with respect to
statements or omissions, if any, made in any registration statement, preliminary
prospectus, or final prospectus (as from time to time amended and supplemented),
or any amendment or supplement thereto, or in any application, in reliance upon
and in conformity with written information furnished to the Company with respect
to the Holder and each holder by or on behalf of the Holder and each holder
expressly for inclusion in any such registration statement, preliminary
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prospectus, or final prospectus, or any amendment or supplement thereto, or
in any application, as the case may be. If any action shall be brought
against the Company or any other person so indemnified based on any such
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, or in any application, and in respect of
which indemnity may be sought against the Holder and each holder pursuant
to this paragraph 9(b), the Holder and each holder shall have the rights
and duties given to the Company, and the Company and each other person so
indemnified shall have the rights and duties given to the indemnified
parties, by the provisions of paragraph 9(a).
c. To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to paragraph
9(a) or 9(b) (subject to the limitations thereof) but it is found in a
final judicial determination, not subject to further appeal, that such
indemnification may not be enforced in such case, even though this
Agreement expressly provides for indemnification in such case, or (ii) any
indemnified or indemnifying party seeks contribution under the Act, the
Exchange Act or otherwise because the indemnification provided for in this
Section 9 is for any reason held to be unenforceable by the Company and the
Holder and any holder, then the Company (including for this purpose any
contribution made by or on behalf of any director of the Company, any
officer of the Company who signed any such registration statement and any
controlling person of the Company), as one entity, and the Holder and any
holder of any of the Representative's Securities included in such
registration in the aggregate (including for this purpose any contribution
by or on behalf of the Holder or any holder), as a second entity, shall
contribute to the losses, liabilities, claims, damages and expenses
whatsoever to which any of them may be subject, on the basis of relevant
equitable considerations such as the relative fault of the Company and the
Holder or any such holder in connection with the facts which resulted in
such losses, liabilities, claims, damages and expenses. The relative fault,
in the case of an untrue statement, alleged untrue statement, omission or
alleged omission, shall be determined by, among other things, whether such
statement, alleged statement, omission or alleged omission relates
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to information supplied by the Company, by the Holder or by any holder of
Representative's Securities included in such registration, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement, alleged statement, omission or alleged
omission. The Company and the Holder agree that it would be unjust and
inequitable if the respective obligations of the Company and the Holder for
contribution were determined by pro rata or per capita allocation of the
aggregate losses, liabilities, claims, damages and expenses (even if the
Holder and the other indemnified parties were treated as one entity for
such purpose) or by any other method of allocation that does not reflect
the equitable considerations referred to in this paragraph 9(c). No person
guilty of a fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who is
not guilty of such fraudulent misrepresentation. For purposes of this
paragraph 9(c), each person, if any, who controls the Holder or any holder
of any of the Representative's Securities within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act and each officer, director,
partner, employee, agent and counsel of each such person, shall have the
same rights to contribution as such person and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have
signed any such registration statement, and each director of the Company
shall have the same rights to contribution as the Company, subject in each
case to the provisions of this paragraph 9(c). Anything in this paragraph
9(c) to the contrary notwithstanding, no party shall be liable for
contribution with respect to the settlement of any claim or action effected
without its written consent. This paragraph 9(c) is intended to supersede
any right to contribution under the Act, the Exchange Act or otherwise.
10. Unless the Representative's Securities have been registered or an
exemption from such registration is available, the Warrant Shares issued upon
exercise of the Representative's Warrants shall be subject to a stop transfer
order and the certificate or certificates evidencing any such Warrant Shares
shall bear the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
NOR HAVE THEY BEEN REGISTERED UNDER
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THE SECURITIES ("BLUE SKY") LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE
SOLD, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS THEY HAVE FIRST BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND UNDER THE APPLICABLE STATE
SECURITIES ("BLUE SKY") LAWS OR UNLESS THE AVAILABILITY OF AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT AND LAWS IS ESTABLISHED TO THE
SATISFACTION OF THE COMPANY, WHICH MAY NECESSITATE A WRITTEN OPINION OF
SELLER'S COUNSEL SATISFACTORY TO COMPANY COUNSEL.
11. Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of any Representative's Warrant (and upon
surrender of any Representative's Warrant if mutilated), and upon reimbursement
of the Company's reasonable incidental expenses, the Company shall execute and
deliver to the Holder thereof a new Representative's Warrant of like date, tenor
and denomination.
12. The Holder of any Representative's Warrant shall not have, solely on
account of such status, any rights of a stockholder of the Company, either at
law or in equity, or to any notice of meetings of stockholders or of any other
proceedings of the Company, except as provided in this Representative's Warrant.
13. This Representative's Warrant shall be construed in accordance with the
laws of the State of Colorado, without giving effect to conflict of laws.
Dated:______________, 2001
LET'S PLAY SPORTS, INC.
By:
---------------------------------------------
[SEAL] Thomas W. Higginson, Chief Executive Officer
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FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
attached Representative's Warrant.)
FOR VALUE RECEIVED, ___________________________________ hereby sells,
assigns and transfers unto ________________________ Representative's Warrants to
purchase __________ shares of Common Stock of Let's Play Sports, Inc. (the
"Company"), together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint ____________________________ attorney to
transfer such Representative's Warrants on the books of the Company, with full
power of substitution.
Dated:
-----------------
Signature:
--------------------------------------
Signature Guaranteed:
NOTICE
The signature on the foregoing Assignment must correspond to the name as
written upon the face of this Representative's Warrant in every particular,
without alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by an eligible guarantor institution which is a participant in a
Securities Transfer Association recognized program.
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ELECTION TO EXERCISE
(To be executed by the holder if such holder desires to
exercise the attached Representative's Warrant)
The undersigned hereby exercises his or its rights to subscribe for
__________ shares of Common Stock covered by the within Representative's Warrant
(each as defined in the within Representative's Warrant) and tenders payment
herewith in the amount of $__________ in accordance with the terms thereof, and
requests that certificates for such Warrants be issued in the name of, and
delivered to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print Name, Address and Social Security or
Tax Identification Number)
and, if such number of Warrants (or portions thereof) shall not be all the
Warrants covered by the within Representative's Warrant, that a new
Representative's Warrant for the balance of the Representative's Warrants (or
portions thereof) covered by the within Representative's Warrant be registered
in the name of, and delivered to, the undersigned at the address stated below.
Name:
---------------------------------------------------------------------------
(Print)
Address:
------------------------------------------------------------------------
------------------------------------------
(Signature)
Dated: __________________________________ Signature Guaranteed:
NOTICE
The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Representative's Warrant in every particular,
without alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by an eligible guarantor institution which is a participant in a
Securities Transfer Association recognized program.
20
