EXHIBIT 10.38
THIS DEBENTURE HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION") OR THE SECURITIES COMMISSION OF ANY STATE
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER REGULATION S PROMULGATED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). THIS DEBENTURE SHALL
NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE
DEBENTURE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL.
THIS DEBENTURE MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS, OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION
UNDER THE PROVISIONS OF THE 1933 ACT AND UNDER PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS.
SPORTSPRIZE ENTERTAINMENT INC.
9% CONVERTIBLE DEBENTURE
US$_______ May 30, 2000
SPORTSPRIZE ENTERTAINMENT INC., a Nevada corporation (the "Company"), the
principal office of which is located at 13101 Washington Blvd., Suite 131, Los
Angeles, California 90066, for value received hereby promises to pay _____, or
its registered assigns (the "Holder"), the sum of US$________ or such lesser
amount as shall then equal the outstanding principal amount hereof (the
"Principal Amount") and any unpaid accrued interest hereon, (together with the
Principal Amount, the "Outstanding Amount") as set forth below, on May 30, 2005,
(the "Maturity Date"). Payment for all amounts due hereunder shall be made by
mail to the registered address of the Holder. This 9% Convertible Debenture (the
"Debenture") is issued pursuant to that Debenture and Warrant Purchase Agreement
between the Company and certain purchasers dated as of May 30, 2000 (the
"Purchase Agreement").
The following is a statement of the rights of the Holder of this Debenture and
conditions to which this Debenture is subject, and to which the Holder hereof,
by the acceptance of this Debenture, agrees:
1. Definitions. As used in this Debenture, the following terms, unless the
context otherwise requires, have the following meanings:
(i) "Average Closing Price" shall mean the average of the three
lowest consecutive closing bid prices of the Common Stock on the NASD Over The
Counter Bulletin Board ("OTCBB") or such other public market or exchange that is
the primary public market for such Common Stock as quoted by Bloomberg L.P. or,
if not reported thereby, another authoritative source, in the thirty day period
prior to the Conversion Date.
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(ii) "Closing Date" shall have the meaning given that term in the
Purchase Agreement.
(iii) "Company" includes the Company and any corporation which shall
succeed to or assume the obligations of the Company under this Debenture.
(iv) "Common Stock" shall mean the shares of common stock of the
Company.
(v) "Holder" when the context refers to a Holder of this Debenture,
shall mean any person who shall at the time be the registered Holder of this
Debenture.
(vi) "Conversion Date" shall mean, with respect to each Conversion,
the date on which the Holder delivers to the Company a Notice of Conversion
pursuant to Section 4.1 or the date on which the Company delivers to the Holder
a Redemption Notice pursuant to Section 4.4.
(vii) "Conversion Price" shall mean the lesser of (a) $1.275 and (b)
eighty-three percent (83%) of the Average Closing Price. Notwithstanding the
foregoing, the Conversion Price shall not be less than the minimum conversion
price or, if applicable, adjustment price related to any financings in excess of
US$1 million by the Company pursuant to which the Company issues securities that
(i) are convertible into Common Stock or (ii) subject to reset and/or adjustment
by issuance of Common Stock based on the market price of Common Stock (the
"Floor Price"). In no event shall the Floor Price be greater than $1.00. If the
Company completes a subsequent financing of securities convertible into Common
Stock at a price per share less than the Floor Price, the Floor Price with
respect to any outstanding balance under the Debenture shall be readjusted to
the lower price per share of Common Stock of such financing.
(viii) "Notice of Conversion" shall mean the written notice by the
Holder to the Company at its principal corporate office of the election to
convert any vested portion of this Debenture, in whole or in part, into shares
of Common Stock, pursuant to Section 4.1.
2. Interest.
(i) The Company shall pay interest (computed on the basis of a
365-day year) at a rate of nine percent (9%) per annum on the Outstanding Amount
during the period beginning on the date of issuance of this Debenture and ending
on the later of the date the Outstanding Amount is paid in full or the date of
the final conversion the Principal Amount.
(ii) Interest shall be paid in Common Stock issued at the Conversion
Price, or at the Company's option, paid in cash on the later of the date of the
Outstanding Amount is paid in full or the final conversion of the Principal
Amount.
3. Events of Default. If one or more of the following described "Events of
Default" shall occur,
a. Any of the representations or warranties made by the Company herein,
or in the Purchase Agreement shall have been incorrect when made in any material
respect; or
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b. The Company shall fail to perform or observe in any material respect
any covenant, term, provision, condition, agreement or obligation of the Company
under this Debenture (other than those contained in paragraphs 3.a., 3.c., 3.d.,
3.e., and 3.f. herein) or the Purchase Agreement, and such failure shall
continue uncured for a period of ten (10) days after written notice from the
Holder specifically describing such failure or, if such failure is by its nature
curable but not curable within thirty (30) days from the date of such notice, if
the Company shall have failed to commence within such thirty (30) day period in
good faith to cure such failure and shall have failed to cure such failure
within a reasonable time longer than thirty (30) days; or
c. A trustee, liquidator or receiver shall be appointed by the Company or
for a substantial part of its property or business without its consent and shall
not be discharged within thirty (30) days after such appointment; or
d. Any governmental agency or any court of competent jurisdiction at the
instance of any governmental agency shall assume custody or control of the whole
or any substantial portion of the properties or assets of the Company and shall
not be dismissed within thirty (30) calendar days thereafter;
e. Bankruptcy reorganization, insolvency or liquidation proceedings or
other proceedings for relief under any bankruptcy law or any law for the relief
or debtors shall be instituted by or against the Company and, if instituted
against the Company, the Company shall by any action or answer approve of,
consent to or acquiesce in any such proceedings or admit the material
allegations of, or default in answering a petition filed in any such proceeding
or such proceedings shall not be dismissed within thirty (30) days thereafter;
f. If the employment of David Kenin, the Company's Chief Executive
Officer, is terminated or he becomes "disabled," so that he cannot perform the
essential functions of his position with reasonable accommodation; or
g. If the Common Stock to be issued pursuant to conversion as set out in
Paragraph (4) of this Debenture is not delivered to the Holder within ten (10)
business days, then, or at any time thereafter, and in each and every such case,
unless such Event of Default shall have been waived in writing by the Holder
(which waiver shall not be deemed to be a waiver of any subsequent default) at
the option of the Holder and in the Holder's sole discretion, the Holder may
consider this Debenture immediately due and payable, without presentment, demand
protest or notice of any kind, all of which are hereby expressly waived,
anything herein or in any note or other instruments contained to the contrary
notwithstanding, and Holder may immediately, and without expiration of any
period of grace, enforce any and all of the Holder's rights and remedies
provided herein or any other rights or remedies afforded by law. It is agreed
that in the event of such action such Holders of Debentures shall be entitled to
receive all reasonable fees, costs and expenses incurred, including with
limitation such reasonable fees and expenses of attorneys (if litigation is
commenced).
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4. Conversion.
4.1 Voluntary Conversion. The Principal Amount of this Debenture shall be
convertible into Common Stock, at the Holder's sole discretion, at any time
beginning August 31, 2000, in accordance with the terms of this Agreement.
Notwithstanding the foregoing, if the Company completes an unsecured financing
in excess of US$1 million after May 30, 2000, the Holder shall not convert more
than one-third of the Principal Amount in any 30-day period (the "Vested
Principal Amount" for such period). If an Event of Default occurs, the entire
Outstanding Amount shall be convertible immediately into Common Stock at the
sole discretion of the Holder.
Common Stock issuable upon conversion of the Debenture will be issued only in
respect to such Vested Principal Amount. The accrued interest payable under this
Debenture shall be added to the Principal Amount or may be paid in cash, at the
Company's sole option.
If the number of resultant shares of Common Stock would as a matter of law or
pursuant to regulatory authority require the Company to seek shareholder
approval of such issuance, the Company shall, as soon as practicable, take the
necessary step to obtain such approval.
This Debenture may not be converted by, or on behalf of, a "U.S. Person" as such
term as defined by Regulation S under the Securities Act of 1933, as amended
(the "1933 Act"), unless the Common Stock issuable upon exercise thereof has
been registered under the 1933 Act and the securities laws of all applicable
states of the United States, or an exemption from such registration requirements
is available.
4.2 Conversion Procedure.
(a) Notice of Conversion pursuant to Section 4.1. The Holder shall be
entitled to convert any Vested Principal Amount of this Debenture in whole or in
part into shares of Common Stock, by giving written notice by way of a Notice of
Conversion to the Company at its principal corporate office of the election to
convert the same pursuant to Section 4, and shall state therein the name or
names in which the certificate or certificates for, shares of Common Stock are
to be issued. Such conversion shall be deemed to have been made on the date that
the Notice of Conversion and the Debenture is actually sent and received by the
Company at its principal offices (each, a "Conversion Date").
(b) Surrender of Debenture. The Holder at its sole expense shall surrender
the Debenture and the signed Notice of Conversion to the Company, at the
principal offices of the Company. The person or persons entitled to receive
shares of Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of any such shares of Common Stock
immediately prior to the close of business on the date the Notice of Conversion
and the Debenture is delivered. A new Debenture representing the Outstanding
amount, if any, with respect to which this Debenture has not been converted
shall be delivered to the Holder with the certificate issued pursuant to Section
4.2(c).
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(c) Delivery of Stock Certificates. As promptly as practicable after the
conversion of this Debenture (but in no case later than ten (10) business days
after receipt of the Debenture and the signed Notice of Conversion), the
Company, at its expense, will issue and deliver by express courier service for
delivery to the Holder of this Debenture a certificate or certificates for the
number of full shares of Common Stock issuable upon such conversion, pursuant to
Section (4.1) of this Debenture. In the event that the Common Stock issuable
upon conversion of the Debenture, is not delivered within ten (10) business days
of the date the Company receives the Debenture and the Notice of Conversion, the
Company shall pay to the Holder, by wire transfer, as liquidated damages for
such failure and not as a penalty, an amount equal to the difference between (a)
the price of the Common Stock issuable upon conversion of the Debenture pursuant
to the Notice of Conversion (calculated as the median price of the closing bid
and offer price on the 11th day as reported by Bloomberg L.P.) and (b) the price
of the Common Stock on delivery of the certificates (calculated as the median
price of the closing bid and offer price as reported by Bloomberg L.P. on the
date the Company's transfer agent sends the stock certificate plus three (3)
business days). Notwithstanding the foregoing, the Company shall not be
obligated to pay such liquidated damages if the median price in (b) is greater
than the median price in (a) or the late delivery of such certificate results
from an event beyond the control of the Company. Any and all payments required
pursuant to this paragraph shall be payable only in cash. The Company
understands that a delay in the issuance of the Common Stock could result in
economic loss to the Holder.
The share certificates shall bear a restrictive legend in substantially the
following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED ("SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION FROM REGISTRATION UNDER THE
FOREGOING LAWS. ACCORDINGLY, THIS WARRANT MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS (i) PURSUANT TO AN EFFECTIVE REGISTRATION
UNDER THE SECURITIES ACT OR (ii) IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT AND UNDER PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS. HEDGING TRANSACTIONS RELATED TO THESE SECURITIES ARE
PROHIBITED UNLESS CONDUCTED IN COMPLIANCE WITH THE SECURITIES ACT.
(d) Mechanics and Effect of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of this Debenture. In lieu of the Company
issuing any fractional shares to the Holder upon the conversion of this
Debenture, the Company shall pay to the Holder the amount of outstanding
principal that is not so converted, such payment to be in the form as provided
below. Applicable state, provincial and federal securities laws will not require
any legends on the certificates after the Debenture has been converted. Upon
conversion of this Debenture, the Company shall be forever released from all its
obligations and liabilities under this Debenture, except that the Company shall
be obligated to pay the Holder, upon conversion,
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any interest accrued and unpaid or unconverted to and including the date of such
conversion, and no more.
4.3 Conversion Default. Subject to Section 4.4 herein, if, at any time the
Holder submits a Notice of Conversion and the Company does not have sufficient
authorized but unissued shares of Common Stock available to effect, in full, a
conversion of the Debentures (a "Conversion Default", the date of such default
being referred to herein as the "Conversion Default Date"), the Company shall
issue to the Holder all of the shares of Common Stock which are available, and
the Notice of Conversion as to any Debentures requested to be converted but not
converted (the "Unconverted Shares") shall become null and void. The Company
shall provide notice of such Conversion Default ("Notice of Conversion Default")
to all existing Holders of outstanding Debentures, by facsimile, within three
(3) business days of such default (with the original delivered by overnight or
two day courier). No Holder may submit a Notice of Conversion after receipt of a
Notice of Conversion Default until the date additional shares of Common Stock
are authorized by the Company.
4.4 Redemption by the Company.
(a) Right to Redeem. Prior to receipt of a Notice of Conversion, the
Company may, but shall not be require to, redeem for cash the Outstanding Amount
of this Debenture, in whole or in part, at a price equal to one hundred
seventeen percent (117%) of the redeemed Outstanding Amount (the "Redemption
Price").
(b) Notice of Redemption pursuant to Section 4.4(a). Subject to the
Holder's right to convert under Section 4.4(c), the Company shall be entitled to
redeem in cash any Outstanding Amount outstanding under this Debenture, in whole
or in part, by giving written notice to the Holder of its intent to redeem such
Outstanding Amount (in accordance with Section 14) pursuant to Section 4.4(a)
(the "Notice of Redemption"), and shall state the amount of the Outstanding
Amount to be redeemed. Such Notice of Redemption shall be deemed to have been
made on the date that the Notice of Redemption is actually sent by the Company
(each, a "Redemption Notice Date").
(c) Election to Convert Upon Notice of Redemption. Upon receipt of a
Notice of Redemption, the Holder shall be entitled to convert any Vested
Principal Amount of this Debenture, in whole or in part, into shares of Common
Stock, by giving written notice by way of a Notice of Conversion pursuant to
Section 4.2(a), no later than ten (10) business days after receipt of the
Redemption Notice Date (the "Election Period"). Upon such election, the Vested
Principal Amount of this Debenture pursuant to which the Notice of Conversion is
given shall be converted in accordance with the terms of Sections 4.1, 4.2 and
4.3, and the Company may not redeem that particular amount of the Vested
Principal Amount. Any remaining Vested Principal Amount for which Notice of
Redemption is given shall be redeemed in accordance with Section 4.4.
(d) Payment of Redemption Price. Within five (5) business days after the
Election Period, the Company shall, redeem for cash the Outstanding Amount for
which Notice of Redemption is given at the Redemption Price, plus outstanding
interest if the entire Debenture is
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redeemed. If the Company fails to pay the redemption amount in cash, within five
(5) business days following the Election Period, then the redemption will be
declared null and void. The Outstanding Amount for which such redemption is made
shall be treated for all purposes as redeemed immediately prior to the close of
business on the date the Redemption Price is paid.
5. Conversion Price Adjustments.
5.1 Adjustments for Stock Splits and Subdivisions. In the event the Company
should at any time or from time to time after the date of issuance hereof fix a
record date for the effectuation of a split or subdivision of the outstanding
shares of Common Stock or the determination of holders of Common Stock entitled
to receive a dividend or the distribution payable in additional shares of Common
Stock or other securities or rights convertible into, or entitling the holder
thereof to receive directly or indirectly, additional shares of Common Stock
(hereinafter referred to as "Common Stock Equivalents") without payment of any
consideration by such holder for the additional shares of Common Stock or the
Common Stock Equivalents (including the additional shares of Common Stock'
issuable upon conversion or exercise thereof), then, as of such record date (or
the date of such dividend distribution, split or subdivision if no record date
is fixed), the Conversion Price of this Debenture shall be appropriately
decreased so that the number of shares of Common Stock issuable upon conversion
of this Debenture shall be increased in proportion to such increase of
outstanding shares.
5.2 Adjustments for Reverse Stock Splits. If the number of shares of Common
Stock outstanding at any time after the date hereof is decreased by a
combination of the outstanding shares of Common Stock, then following the record
date of such combination, the Conversion Price for this Debenture shall be
appropriately increased so that the number of shares of Common Stock issuable on
conversion hereof shall be decreased in proportion to such decrease in
outstanding shares.
6. Merger. If the Company merges or consolidates with another corporation or
sells or transfers all or substantially all of its assets to another person and
the Holders of the Common Stock are entitled to receive stock, securities or
property in respect of or in exchange for Common Stock, then as a condition of
such merger, consolidation, sale or transfer, the Company and any such
successor, purchaser or transferee shall amend this Debenture to provide that it
may thereafter be converted on the terms and subject to the conditions set forth
above into the kind and amount of stock, entities or property receivable upon
such merger, consolidation, sale or transfer by a Holder of the number of shares
of Common Stock into which this Debenture might have been converted immediately
before such merger, consolidation, sale or transfer, subject to adjustments
which shall be as nearly equivalent as may be practicable to adjustments
provided for in Section 5.
The Company shall not consolidate or merge into, or transfer all or
substantially all of its assets to, any person, unless such person assumes the
obligations of the Company under this Debenture and immediately after such
transaction no Event of Default exists. Any reference herein to the Company
shall refer to such surviving or transferee corporation and the obligations of
the Company shall terminate upon such assumption.
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7. Worn or Lost Debentures. If this Debenture becomes worn, defaced or
mutilated but is still substantially intact and recognizable, the Company or its
agent may issue a new Debenture in lieu hereof upon its surrender. Where the
Holder of this Debenture claims that the Debenture has been lost, destroyed or
wrongfully take, the Company shall issue a new Debenture in place of the
original Debenture if the Holder so requests by written notice to the Company
actually received by the Company before it is notified the Debenture has been
acquired by a bona fide purchaser and Holder has delivered to the Company an
indemnity bond in such amount and issued by such surety as the Company deems
satisfactory together with an affidavit of the Holder setting forth the facts
concerning such loss, destruction or wrongful taking and such other information
in such form with such proof or verification as the Company may request.
8. Notices of Record Date.
In the event of:
(i) Any taking by the Company of record of the holders of any class of
securities of the Company for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a cash dividend payable out of
earned surplus at the same rate as that of the last such cash dividend
heretofore paid) or other distribution, or any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right; or
(ii) Any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all of the assets of the Company to any other person or any
consolidation or merger involving the Company; or
(iii) Any voluntary or involuntary dissolution, liquidation or winding up of
the Company.
the Company will mail to the holder of this Debenture at least five (5) days
prior to the earliest date specified therein, a notice specifying (A) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right; and (B) the date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding up is expected to become effective and the record date for determining
stockholders entitled to vote thereon.
9. Authorized Shares, of Common Stock, Reservation of Shares. The Company
shall at the Closing date and from time to time as required, so long as any of
the Debentures are outstanding, reserve and keep available out of its authorized
and unissued Common Stock, solely for the purpose of effecting the conversion of
the Debentures, such number of shares of Common Stock equal to or greater than
200% of the number of shares of Common Stock for which are issuable upon
conversion of all of the then outstanding Debentures which are then outstanding
or which could be issued at any time under this Debenture.
10. Assignment. Subject to the restrictions or transfer described in Section 12
below, the rights and obligations of the Company and the Holder of this
Debenture shall be binding upon and benefit the successors, assigns, heirs,
administrators, and transferees of the parties.
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11. Waiver and Amendment. This Debenture and the Purchase Agreement constitute
the full and entire understanding and agreement between the parties with respect
to the subject matter hereof and supersedes all prior agreements with respect to
the subject matter hereof. Any provision of this Debenture may be amended,
waived or modified upon the written consent of the Company and Holder thereof.
12. Restrictions on Transfer. This Debenture and the Common Stock issuable upon
the conversion hereof have not been registered under the Securities Act of 1933,
as amended, (the "Securities Act") and have been sold pursuant to Regulation S
under the Securities Act ("Regulation S"). The Debenture may not be transferred
or resold, or to a U.S. Person, or to or for the account or benefit of a U.S.
Person (as defined in Regulation S) for a period of one (1) year from the date
hereof and thereafter this Debenture and the Common Stock issuable upon the
conversion thereof may only be offered or sold pursuant to registration under or
an exemption from the Securities Act.
13. Automatic Conversion. In the event all or any portion of this Debenture
remains outstanding on May 30, 2005, the unconverted portion of such Debenture
will automatically be converted into shares of Common Stock on such date in the
manner set forth in Section 4.
14. Grant of Security Interest. To secure the prompt and full payment of all
principal and interest owing to Holder pursuant to this Debenture, the Company
hereby grants to Holder a security interest in all of its assets, accounts
receivable and inventory, now existing or hereafter arising, and all proceeds
therefrom. Such security interest shall terminate on the earlier of (i) the date
the Company completes any unsecured financing in excess of $2.5 million after
May 30, 2000 or (ii) this Debenture is redeemed or converted in full. The
Company shall file UCC-1 Financing Statements in the State of California and the
State of Nevada, and, at the written request of the Holder, execute for filing,
any additional financing statements or continuation statements as may be
required from time to time to perfect or continue Holder's security interest in
such assets.
15. Notices. Any notice, request or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
made by hand delivery, by an express courier company, by registered or certified
mail, or by facsimile transmission, at the respective addresses and/or facsimile
number of the parties as set forth herein.
16. Governing Law; Interpretation. This Agreement, and all exhibits attached,
shall be governed by and construed under the laws of the State of California and
the laws applicable therein without regard to its choice of law principles. All
disputes should be determined and litigated in the courts of California.
Any litigation based thereon, or arising out of, under, or in connection with,
this Agreement shall be brought and maintained exclusively in the courts of the
State of California. The Company and the Holder hereby expressly and irrevocably
submit to the jurisdiction of the state and federal Courts of California for the
purpose of any such litigation as set forth above and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with such litigation.
The Company and the Holder further irrevocably consents to the service of
process by
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registered mail, postage prepaid, or by personal service within or without the
State of California. The Company and the Holder hereby expressly and irrevocably
waive, to the fullest extent permitted by law, any objection which it may have
or hereafter may have to the laying of venue of any such litigation brought in
any such court referred to above and any claim that any such litigation has been
brought in any inconvenient forum. To the extent that the Company and the Holder
have or hereafter may acquire any immunity from jurisdiction of any court or
from any legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution or otherwise) with respect to itself or
its property. The Company and the Holder hereby irrevocably waives such immunity
in respect of its obligations under this agreement and the other loan documents.
Holder and the Company hereby knowingly, voluntarily and intentionally waive any
rights they may have to a trial by jury in respect of any litigation based
hereon, or arising out of, under, or in connection with, this Agreement. The
Company and the Holder acknowledge and agree that they have received full and
sufficient consideration for this provision and that this provision is a
material inducement for the Company and the Holder entering into this agreement.
Any legal action or proceeding in connection with this Agreement or the
performance hereof may be brought in the state and federal courts located in
California, and the parties hereby irrevocably submit to the non-exclusive
jurisdiction of such courts for the purpose of any such action or proceeding.
17. Heading; References. All headings used herein are used for convenience only
and shall not be used to construe or interpret this Debenture. Except where
otherwise indicated, all references herein to Sections refer to Sections hereof.
18. Attorney's Fees. Should any party bring an action to enforce the terms of
this Debenture, then the prevailing party in the action shall be entitled to
recovery of its attorney's fees from the other party.
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IN WITNESS WHEREOF, the Company has caused this Debenture to be issued this __th
day of May, 2000.
SPORTSPRIZE ENTERTAINMENT INC.
By: /s/ Bruce R. Cameron
------------------------------
Name: Bruce R. Cameron
Title: President
Address: 13101 Washington Blvd., Suite 131
Los Angeles, California 90066
Facsimile: (310) 566-7150
HOLDER:
By: ------------------------------
Name: ----------------------------
Title: ---------------------------
Address:
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NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Debentures)
The undersigned hereby irrevocably elects, as of -------------- , 200- to
convert $---------- of the Debentures into Shares of Common Stock (the "Shares")
of SPORTSPRIZE ENTERTAINMENT INC. (the "Company") according to the conditions
set forth in the Agreement dated May 30, 2000.
The undersigned hereby represents that it is not a U.S. Person as defined
in Regulation S promulgated under the Securities Act of 1933, as amended, and is
not converting the Debentures on behalf of any U.S. Person, and is not within
the United States at the time of execution and delivery of this Notice of
Conversion.
Date of Conversion: ---------------------
Number of Shares Issuable
upon this conversion: -------------------
Signature: ------------------------------
[Name]
Address: --------------------------------
Phone: --------------------- Facsimile: ---------------------
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NOTICE OF REDEMPTION
SPORTSPRIZE ENTERTAINMENT INC. (the "Company") according to the conditions
set forth in the Debenture dated May 30, 2000 hereby elects, as of
---------------, 200- to redeem $------------ of the Vested Principal Amount
and, if applicable, accrued interest of the Debentures.
Date of Redemption: ---------------------
Vested Principal Amount and, if applicable,
accrued interest Redeemed: ---------------------
x 1.17 = Redemption Amount: ---------------------
HOLDER:
--------------------------------
[Name]
Phone: --------------------- Facsimile: ---------------------
SPORTSPRIZE ENTERTAINMENT INC.
By: --------------------------------
Its: -------------------------------
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