THIS
WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGIS-TERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. EXCEPT AS OTHERWISE SET FORTH HEREIN,
NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRA-TION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR,
AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY
FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS, THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD
PURSUANT TO RULE 144 OR REGULATION S UNDER SUCH
ACT.
Right
to Purchase 200,000 Shares of Common Stock, par value $0.0001
per share
Issue
Date: September 25, 2007
STOCK PURCHASE WARRANT
THIS CERTIFIES THAT ,
for value received, each of the parties set forth on
attached
Schedule A ,
or its registered assigns, is entitled to purchase from
SportsQuest, Inc., a
Delaware corporation (the “Company”), at any time or
from time to time during the period specified in Paragraph 2
hereof, 200,000 fully paid and nonassessable shares of the
Company’s Common Stock, par value $0.0001 per share (the
“Common Stock”), at an exercise price specified in
Paragraph 2 (the “Exercise Price”). The term
“Warrant Shares,” as used herein, refers to the shares
of Common Stock purchasable hereunder. The Warrant Shares and the
Exercise Price are subject to adjustment as provided in Paragraph 3
hereof. This Warrant is issued pursuant to that certain Agreement
for Exchange of Common Stock, dated August 20, 2007, by and among
the Company and Zaring-Cioffi Entertainment, LLC, ZCE, Inc. and Q-C
Entertainment, LLC (the “Exchange Agreement”), as
amended by that Bring Down Agreement and Amendment dated as of the
date hereof by and among the Company, Zaring/Cioffi Entertainment,
Inc., ZCE, Inc., David Quinn and Jeff Merriman Cohen.
This
Warrant is subject to the following terms, provisions, and
conditions:
1.
Manner of Exercise;
Issuance of Certificates; Payment for Shares.
Subject
to the provisions hereof, this Warrant may be exercised by the
holder hereof, in whole or in part, by the surrender of this
Warrant, together with a completed exercise agreement in the
form attached hereto (the “Exercise Agreement”),
to the Company during normal business hours on any business
day at the Company’s principal executive offices (or
such other office or agency of the Company as it may designate
by notice to the holder hereof), and upon payment to the
Company in cash, by certified or offi-cial bank check or by
wire transfer for the account of the Company, of the Exercise
Price for the Warrant Shares specified in the Exercise
Agreement. The Warrant Shares so purchased shall be deemed to
be issued to the holder hereof or such holder’s
designee, as the record owner of such shares, as of the close
of business on the date on which this Warrant shall have been
surrendered, the completed Exercise Agreement shall have been
deliv-ered, and payment shall have been made for such shares
as set forth above. Certifi-cates for the Warrant Shares so
purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the
holder hereof within a reasonable time, not exceeding 10
business days after this Warrant shall have been so exercised.
The certificates so delivered shall be in such denominations
as may be requested by the holder hereof and shall be
registered in the name of such holder or such other name as
shall be designated by such holder. If this Warrant shall have
been exercised only in part, then, unless this Warrant has
expired, the Company shall, at its expense, at the time of
delivery of such certificates, deliver to the holder a new
Warrant representing the number of shares with respect to
which this Warrant shall not then have been
exercised.
2.
Period of
Exercise.
This
Warrant is exercisable during the period, for the number of shares
of Common Stock and at the Exercise Price as follows:
(a) 50,000
shares of Common Stock at $0.50 per share on or before December 31,
2007;
(b) 50,000
shares of Common Stock at $1.00 per share on or before December 31,
2008; and
(c) 100,000
shares of Common Stock at $1.50 per share on or before December 31,
2009.
3.
Subdivision or Combination of Common Stock
. If
the Company at any time subdivides (by any stock split, stock
dividend, recapitalization, reorganization, reclassification or
otherwise) the shares of Common Stock acquirable hereunder into a
greater number of shares, then, after the date of record for
effecting such subdivision, the Exercise Price in effect
immediately prior to such subdivision will be proportionately
reduced. If the Company at any time combines (by reverse stock
split, recapitalization, reorganization, reclassification or
otherwise) the shares of Common Stock acquirable hereunder into a
smaller number of shares, then, after the date of record for
effecting such combination, the Exercise Price in effect
immediately prior to such combination will be proportionately
increased. Upon each adjustment of the Exercise Price pursuant to
the provisions of this Section, the number of shares of Common
Stock issuable upon exercise of this Warrant shall be adjusted by
multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of shares of
Common Stock issuable upon exercise of this Warrant immediately
prior to such adjustment and dividing the product so obtained by
the adjusted Exercise Price
4.
No Fractional Shares
. No
fractional shares of Common Stock are to be issued upon the
exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise
be issuable in an amount equal to the same fraction of the Market
Price of a share of Common Stock on the date of such exercise.
“Market Price,” as of any date, (i) means the average
of the last reported sale prices for the shares of Common Stock on
the OTCBB for the five trading days immediately preceding such date
as reported by Bloomberg, or (ii) if the OTCBB is not the principal
trading market for the shares of Common Stock, the average of the
last reported sale prices on the principal trading market for the
Common Stock during the same period as reported by Bloomberg, or
(iii) if market value cannot be calculated as of such date on any
of the foregoing bases, the Market Price shall be the fair market
value as reasonably determined in good faith by the board of
directors of the Company.
5.
No Rights or Liabilities as a Shareholder
.
This Warrant shall not entitle the holder hereof to any voting
rights or other rights as a shareholder of the Company. No
provision of this Warrant, and no mere enumeration herein of the
rights or privileges of the holder hereof, shall give rise to any
liability of such h
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