Exhibit 10.13

 

SUBSCRIPTION AGREEMENT

 

THIS SUBSCRIPTION AGREEMENT (this “Agreement”) is dated as of August ___, 2011
by and between Wizard World, Inc. (formerly GoEnergy, Inc.), a Delaware
corporation (the “Company”), and the subscribers identified on Schedule 1 hereto
(collectively, the “Subscribers” and each, a “Subscriber”).

 

WHEREAS, the Company and the Subscribers are executing and delivering this
Agreement in reliance upon an exemption from securities registration afforded by
the provisions of Section 4(2), Section 4(6) and/or Regulation D (“Regulation
D”), as promulgated by the United States Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as amended (the “1933 Act”);

 

WHEREAS, the parties hereto desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the
Subscribers, as provided herein, and the Subscribers, in the aggregate, shall
purchase up to $455,000 principal amount (“Principal Amount”) of promissory
notes of the Company that are convertible into shares of the Company’s common
stock, $.0001 par value per share (the “Common Stock”), a form of which is
annexed hereto as Exhibit A (“Notes”), and Series A common stock purchase
warrants (the “Warrants”) in the form attached hereto as Exhibit B, to purchase
shares of Common Stock (the “Warrant Shares”), for any aggregate purchase price
of up to $455,000 (“Purchase Price”)  (the “Offering”).  The Notes, shares of
Common Stock issuable upon conversion of the Notes (the “Shares”), the Warrants
and the Warrant Shares are collectively referred to herein as the “Securities”;
and

 

WHEREAS, the Purchase Price shall be held in escrow by Grushko & Mittman, P.C.,
515 Rockaway Avenue, Valley Stream, New York 11581 (the “Escrow Agent”) pursuant
to the terms of an Escrow Agreement to be executed by the parties hereto
substantially in the form attached hereto as Exhibit C (the “Escrow Agreement”).

 

NOW, THEREFORE, in consideration of the mutual covenants and other agreements
contained in this Agreement, the Company and each of the Subscribers hereby
agree as follows:

 

1.            Closing.

 

(a)          Closing.  Subject to the satisfaction or waiver of the terms and
conditions of this Agreement, on the Closing Date (as defined herein) the
Subscribers shall purchase, and the Company shall sell to such Subscribers in
accordance with Schedule 1 hereto, the Notes and the Warrants as described in
Section 2 below.  The date the Escrow Agent releases the funds received from one
or more Subscribers to the Company and releases the Escrow Documents (as defined
in the Escrow Agreement) to the parties hereto in accordance with the provisions
of the Escrow Agreement shall be the “Closing Date” with respect to such
released funds and Escrow Documents, and such releases are referred to herein as
the “Closing.”  The parties hereto may agree to have more than one Closing once
funds are deposited into the escrow account, in which case the first Closing
shall be referred to herein as the “Initial Closing”).

 

(b)          Time Effective Clauses.  All time effective clauses not
specifically related to an actual Closing Date shall be deemed to have commenced
as of the Initial Closing Date, if more than one Closing, or the Closing Date,
if only one Closing.

 

2.            Notes and Series A Warrant.

 

(a)          Notes.  On the Closing Date, each Subscriber shall purchase, and
the Company shall sell to each such Subscriber, a Note in the principal amount
designated on such Subscriber’s signature page hereto for such Subscriber’s
Purchase Price indicated thereon.

 

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(b)          Series A Warrants.  On the Closing Date, the Company shall issue
and deliver the Warrants to the Subscribers as follows:  (i) one Warrant shall
be issued for every two Shares that would be issued upon the conversion of all
or any part of the Note.  The exercise price to acquire a Warrant Share upon
exercise of a Warrant shall be $0.60, subject to amendment as described in the
Warrants.  The Warrants shall be exercisable until five (5) years after the
Closing Date.

 

3.            Payment and Allocation of Purchase Price.  In consideration of the
issuance of the Note and Warrants on the Closing Date, each Subscriber shall pay
to or for the benefit of the Company such Subscriber’s Purchase Price, as set
forth on the signature pages hereto.  The number of Warrant Shares eligible for
purchase by each such Subscriber is set forth on the signature pages
hereto.  The Purchase Price will be allocated among the components of the Notes
and Warrants so that each component of same will be fully paid and
non-assessable.

 

4.            Subscriber Representations and Warranties.  Each of the
Subscribers, severally but not jointly, hereby represents and warrants to, and
agrees with the Company that, with respect only to such Subscriber:

 

(a)          Organization and Standing of Subscriber.  If Subscriber is an
entity, Subscriber is duly formed, validly existing and in good standing under
the laws of the jurisdiction of its formation.  If the Subscriber is a natural
person, Subscriber has the legal capacity and power to enter into the
Transaction Documents (as defined herein).

 

(b)          Authorization and Power.  Such Subscriber has the requisite power
and authority to enter into and perform this Agreement and the other Transaction
Documents and to purchase the Notes and Warrants being sold to such Subscriber
hereunder.  The execution, delivery and performance of this Agreement and the
other Transaction Documents by such Subscriber, and the consummation by such
Subscriber of the transactions contemplated hereby and thereby, have been duly
authorized by all necessary action, and no further consent or authorization of
Subscriber or its board of directors, manager(s), trustee, stockholders,
partners, members or beneficiaries, as applicable, is required.  This Agreement
and the other Transaction Documents have been duly authorized, executed and
delivered by such Subscriber and constitutes, or shall constitute, when executed
and delivered, a valid and binding obligation of such Subscriber, enforceable
against Subscriber in accordance with the terms thereof.

 

(c)          No Conflicts.  The execution, delivery and performance of this
Agreement and the other Transaction Documents and the consummation by such
Subscriber of the transactions contemplated hereby and thereby or relating
hereto do not and will not (i) result in a violation of such Subscriber’s
charter documents, bylaws or other organizational documents, if applicable; (ii)
conflict with nor constitute a default (or an event which with notice or lapse
of time or both would become a default) under any agreement to which such
Subscriber is a party; or (iii) result in a violation of any law, rule or
regulation, or any order, judgment or decree of any court or governmental agency
applicable to such Subscriber or its properties (except for such conflicts,
defaults and violations as would not, individually or in the aggregate, have a
Material Adverse Effect (as defined herein) on Subscriber).  Such Subscriber is
not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order for such
Subscriber to execute, deliver or perform any of such Subscriber’s obligations
under this Agreement and the other Transaction Documents, nor to purchase the
Securities in accordance with the terms hereof, provided that for purposes of
the representation made in this sentence, such Subscriber is assuming and
relying upon the accuracy of the relevant representations and agreements of the
Company herein.

 

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(d)          Information on Company.  Such Subscriber has been furnished with or
has had access to the EDGAR Website of the Commission to the Company’s filings
made with the Commission through the tenth (10th) business day preceding the
Closing Date (hereinafter collectively referred to as the “Reports”).  Such
Subscriber is not deemed to have any knowledge of any information not included
in the Reports, unless such information is delivered in the manner described in
the next sentence.  In addition, such Subscriber may have received in writing
from the Company such other information concerning its operations, financial
condition and other matters as such Subscriber has requested in writing,
identified thereon as OTHER WRITTEN INFORMATION (such other information is
collectively, the “Other Written Information”), and considered all factors such
Subscriber deems material in deciding on the advisability of investing in the
Securities.

 

(e)          Information on Subscriber.  Such Subscriber is, and will be at the
time of the issuance of the Notes, the conversion of the Notes, the issuance of
the Warrants, and the exercise of the Warrants, an “accredited investor,” as
such term is defined in Regulation D promulgated by the Commission under the
1933 Act, is experienced in investments and business matters, has made
investments of a speculative nature and has purchased securities of United
States publicly-owned companies in private placements in the past and, with its
representatives, has such knowledge and experience in financial, tax and other
business matters as to enable such Subscriber to utilize the information made
available by the Company to evaluate the merits and risks of, and to make an
informed investment decision with respect to, the proposed purchase, which such
Subscriber hereby agrees represents a speculative investment.  Such Subscriber
has the authority and is duly and legally qualified to purchase and own the
Securities.  Such Subscriber is able to bear the risk of such investment for an
indefinite period and to afford a complete loss thereof.  The information set
forth on Schedule 1 hereto regarding such Subscriber is accurate and complete.

 

(f)          Purchase of Notes and Warrants.  On the Closing Date, such
Subscriber will purchase the Notes and Warrants as principal for its own account
for investment only and not with a view toward, or for resale in connection
with, the public sale or any distribution thereof.

 

(g)          Compliance with Securities Act.  Such Subscriber understands and
agrees that the Securities have not been registered under the 1933 Act or any
applicable state securities laws by reason of their issuance in a transaction
that does not require registration under the 1933 Act (based in part on the
accuracy of the representations and warranties of Subscriber contained herein),
and that such Securities must be held indefinitely unless a subsequent
disposition is registered under the 1933 Act or any applicable state securities
laws or is exempt from such registration.  In any event, and subject to
compliance with applicable securities laws, Subscriber may enter into lawful
hedging transactions in the course of hedging the position they assume and
Subscriber may also enter into lawful short positions or other derivative
transactions relating to the Securities, or interests in the Securities, and
deliver the Securities, or interests in the Securities, to close out their short
or other positions or otherwise settle other transactions, or loan or pledge the
Securities, or interests in the Securities, to third parties who in turn may
dispose of these Securities.

 

(h)          Conversion Shares and Warrant Shares Legend.  The Conversion Shares
and Warrant Shares shall bear the following or similar legend:

 

“THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR APPLICABLE
STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER AND
REASONABLY APPROVED BY THE COMPANY), IN A GENERALLY ACCEPTABLE FORM, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE
144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

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(i)          Notes and Warrants Legend.  The Notes and Warrants shall bear the
following legend:

 

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE
-OR-  EXERCISABLE] HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE
HOLDER AND REASONABLY APPROVED BY THE COMPANY), IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO
RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

(j)          Communication of Offer.  The Offering was directly communicated to
such Subscriber by the Company.  At no time was such Subscriber presented with
or solicited by any leaflet, newspaper or magazine article, radio or television
advertisement, or any other form of general advertising or solicited or invited
to attend a promotional meeting otherwise than in connection and concurrently
with such communicated offer.

 

(k)          Restricted Securities.  Such Subscriber understands that the
Securities have not been registered under the 1933 Act and such Subscriber shall
not sell, offer to sell, assign, pledge, hypothecate or otherwise transfer any
of the Securities unless pursuant to an effective registration statement under
the 1933 Act, or unless an exemption from registration is
available.  Notwithstanding anything to the contrary contained in this
Agreement, and subject to compliance with applicable securities laws, such
Subscriber may transfer (without restriction and without the need for an opinion
of counsel as permitted under applicable law) the Securities: (i) to such
Subscriber’s Affiliates (as defined below), provided that each such Affiliate is
an “accredited investor,” as such term is defined in Regulation D promulgated by
the Commission under the 1933 Act, and such Affiliate agrees in writing to be
bound by the terms and conditions of this Agreement; (ii) to such Subscriber’s
Immediate Family (as defined below), provided the Immediate Family member agrees
in writing to be bound by the terms and conditions of this Agreement; (iii) to
an inter vivos or testamentary trust (or other entity) in which the Securities
are to be passed to Subscriber’s designated beneficiaries; or (iv) by will or by
the laws of descent or distribution.  For the purposes of this Agreement, an
“Affiliate” of any person or entity means any other person or entity directly or
indirectly controlling, controlled by or under direct or indirect common control
with such person or entity.  Without limiting the foregoing, each Subsidiary (as
defined herein) is an Affiliate of the Company.  For purposes of this
definition, “control” means the power to direct the management and policies of
such person or entity, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise.  For purposes of this Agreement,
“Immediate Family” means any child, stepchild, parent, stepparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law.

 

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(l)          No Governmental Review.  Such Subscriber understands that no United
States federal or state securities agency or any other governmental or state
agency has passed on or made recommendations or endorsement of the Securities or
the suitability of the investment in the Securities, nor have such authorities
passed upon or endorsed the merits of the Offering.

 

(m)          Independent Decision.  The decision of such Subscriber to purchase
Securities has been made by such Subscriber independently of any other
Subscriber and independently of any information, materials, statements or
opinions as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or otherwise) or
prospects of the Company which may have been made or given by any other
Subscriber or by any agent or employee of any other Subscriber, and no
Subscriber or any of its agents or employees shall have any liability to any
other Subscriber (or any other Person) relating to or arising from any such
information, materials, statements or opinions. 

 

(n)          Correctness of Representations.  Subscriber represents that the
foregoing representations and warranties are true and correct as of the date
hereof and, unless Subscriber otherwise notifies the Company in writing prior to
the Closing Date, shall be true and correct as of the Closing Date.

 

(o)          Survival.  The foregoing representations and warranties shall
survive the Closing Date.

 

5.            Company Representations and Warranties.  Except as set forth in
the Schedules hereto, the Company represents and warrants to, and agrees with
each Subscriber that:

 

(a)          Due Incorporation.  The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power to own its properties and to carry on its
business as presently conducted.  The Company is duly qualified as a foreign
corporation to do business and is in good standing in each jurisdiction where
the nature of the business conducted or property owned by it makes such
qualification necessary, other than those jurisdictions in which the failure to
so qualify would not have a Material Adverse Effect.  For purposes of this
Agreement, a “Material Adverse Effect” shall mean a material adverse effect on
the financial condition, results of operations, prospects, properties or
business of the Company and its Subsidiaries taken as a whole.  For purposes of
this Agreement, “Subsidiary” means, with respect to any entity at any date, any
direct or indirect corporation, limited or general partnership, limited
liability company, trust, estate, association, joint venture or other business
entity of which (A) more than 30% of (i) the outstanding capital stock having
(in the absence of contingencies) ordinary voting power to elect a majority of
the board of directors or other managing body of such entity, (ii) in the case
of a partnership or limited liability company, the interest in the capital or
profits of such partnership or limited liability company or (iii) in the case of
a trust, estate, association, joint venture or other entity, the beneficial
interest in such trust, estate, association or other entity business is, at the
time of determination, owned or controlled directly or indirectly through one or
more intermediaries, by such entity, or (B) is under the actual control of the
Company.  As of the Closing Date, all of the Company’s Subsidiaries and the
Company’s other ownership interests therein are set forth on Schedule 5(a).  The
Company represents that it owns all of the equity of the Subsidiaries and rights
to receive equity of the Subsidiaries set forth on Schedule 5(a), free and clear
of all liens, encumbrances and claims, except as set forth on Schedule 5(a).  No
person or entity other than the Company has the right to receive any equity
interest in the Subsidiaries.  Except as set forth on Schedule 5(a), the Company
further represents that neither the Company nor the Subsidiaries have been known
by any other names for the five (5) years preceding the date of this Agreement.

 

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(b)          Outstanding Stock.  All issued and outstanding shares of capital
stock and equity interests in the Company have been duly authorized and validly
issued and are fully paid and non-assessable.

 

(c)          Authority; Enforceability.  This Agreement, the Notes, Warrants,
the Escrow Agreement, and any other agreements delivered or required to be
delivered together with or pursuant to this Agreement or in connection herewith
(collectively, the “Transaction Documents”) have been duly authorized, executed
and delivered by the Company and/or the Subsidiaries, as the case may be, and
are valid and binding agreements of the Company and/or the Subsidiaries, as the
case may be, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights generally and
to general principles of equity.  The Company and/or the Subsidiaries, as the
case may be, have full corporate power and authority necessary to enter into and
deliver the Transaction Documents and to perform their obligations thereunder.

 

(d)          Capitalization and Additional Issuances.  The authorized and
outstanding capital stock of the Company on a fully diluted basis and the
authorized and outstanding capital stock of the Subsidiaries and all outstanding
rights to acquire or receive, directly or indirectly, any equity of the Company
and/or the Subsidiaries as of the date of this Agreement and the Closing Date
(not including the Securities) are set forth on Schedule 5(d).  Except as set
forth on Schedule 5(d), there are no options, warrants or rights to subscribe to
securities, rights, understandings or obligations convertible into or
exchangeable for or granting any right to subscribe for any shares of capital
stock or other equity interest of the Company or any of the Subsidiaries.  The
only officer, director, employee and consultant stock option or stock incentive
plan or similar plan currently in effect or contemplated by the Company is
described on Schedule 5(d).  There are no outstanding agreements or preemptive
or similar rights affecting the Company’s Common Stock or equity.

 

(e)          Consents.  Except as described in Section 12(b) below, no consent,
approval, authorization or order of any court, governmental agency or body or
arbitrator having jurisdiction over the Company, the Subsidiaries or any of
their Affiliates, any Principal Market (as defined herein) or the Company’s
stockholders is required for the execution by the Company of the Transaction
Documents and compliance and performance by the Company and the Subsidiaries of
their respective obligations under the Transaction Documents, including, without
limitation, the issuance and sale of the Securities.  The Transaction Documents
and the Company’s performance of its obligations thereunder have been
unanimously approved by the Company’s board of directors in accordance with the
Company’s Certificate of Incorporation and applicable law.  Any such
qualifications and filings will, in the case of qualifications, be effective
upon Closing, and will, in the case of filings, be made within the time
prescribed by law.

 

(f)          No Violation or Conflict.  Conditioned upon the representations and
warranties of Subscriber in Section 4 hereof being materially true and correct,
neither the issuance nor the sale of the Securities nor the performance of the
Company’s obligations under this Agreement and the other Transaction Documents
by the Company, will:

 

(i)          violate, conflict with, result in a breach of, or constitute a
default (or an event which with the giving of notice or the lapse of time or
both would be reasonably likely to constitute a default) under (A) the
certificate of incorporation or bylaws of the Company, (B) to the Company’s
knowledge, any decree, judgment, order, law, treaty, rule, regulation or
determination applicable to the Company of any court, governmental agency or
body, or arbitrator having jurisdiction over the Company or over the properties
or assets of the Company or any of its Affiliates, (C) the terms of any bond,
debenture, note or any other evidence of indebtedness, or any agreement, stock
option or other similar plan, indenture, lease, mortgage, deed of trust or other
instrument to which the Company or any of its Affiliates is a party, by which
the Company or any of its Affiliates is bound, or to which any of the properties
of the Company or any of its Affiliates is subject or (D) the terms of any
“lock-up” or similar provision of any underwriting or similar agreement to which
the Company, or any of its Affiliates is a party, except the violation,
conflict, breach or default of which would not have a Material Adverse Effect;
or

 

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(ii)         result in the creation or imposition of any lien, charge or
encumbrance upon the Securities or any of the assets of the Company or any of
its Affiliates, except in favor of each Subscriber as described herein; or

 

(iii)        except as set forth in Schedule 5(f) hereto, result in the
activation of any anti-dilution rights or a reset or repricing of any debt,
equity or security instrument of any creditor or equity holder of the Company,
or the holder of the right to receive any debt, equity or security instrument of
the Company, nor result in the acceleration of the due date of any obligation of
the Company; or

 

           (iv)         except as set forth in Schedule 5(f) hereto, result in
the triggering of any piggy-back or other registration rights of any person or
entity holding securities of the Company or having the right to receive
securities of the Company.

 

(g)          The Securities.  The Securities upon issuance:

 

(i)          are, or will be, free and clear of any security interests, liens,
claims or other encumbrances, subject only to restrictions upon transfer under
the 1933 Act and any applicable state securities laws;

 

(ii)         have been, or will be, duly and validly authorized and on the dates
of issuance of the Notes and Warrants, the Conversion Shares upon conversion of
the Notes, and the Warrant Shares upon exercise of the Warrants, such Notes,
Warrants, Conversion Shares and Warrant Shares will be duly and validly issued,
fully paid and non-assessable and if registered pursuant to the 1933 Act and
resold pursuant to an effective registration statement or an exemption from
registration, will be free trading, unrestricted and unlegended;

 

(iii)        will not have been issued or sold in violation of any preemptive or
other similar rights of the holders of any securities of the Company or rights
to acquire securities or debt of the Company;

 

(iv)         will not subject the holders thereof to personal liability by
reason of being such holders; and

 

(v)          conditioned upon the representations and warranties of the
Subscribers as set forth in Section 4 hereof being true and correct to the
extent required by Section 5 of the 1933 Act, will not result in a violation of
Section 5 under the 1933 Act.

 

(h)          Litigation.  There is no pending or, to the best knowledge of the
Company, threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company,
or any of its Affiliates that would affect the execution by the Company or the
complete and timely performance by the Company of its obligations under the
Transaction Documents.  Except as disclosed in the Reports, there is no pending
or, to the best knowledge of the Company, basis for or threatened action, suit,
proceeding or investigation before any court, governmental agency or body, or
arbitrator having jurisdiction over the Company, or any of its Affiliates which
litigation if adversely determined would have a Material Adverse Effect.

 

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(i)          No Market Manipulation.  The Company and its Affiliates have not
taken, and will not take, directly or indirectly, any action designed to, or
that might reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the Securities or affect the price at which the Securities may be issued or
resold.

 

(j)          Information Concerning Company.  The Reports and Other Written
Information contain all material information relating to the Company and its
operations and financial condition as of their respective dates which
information is required to be disclosed therein.  Since December 31, 2010, and
except as disclosed in the Reports or modified in the Reports and Other Written
Information or in the Schedules hereto, there has been no Material Adverse
Effect relating to the Company’s business, financial condition or affairs.  The
Reports and Other Written Information including the financial statements
included therein do not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, taken as a whole, not misleading in light of the
circumstances and when made.

 

(k)          Solvency.  Based on the consolidated financial condition of the
Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder, and subject
to the assumption of continuing as a going concern, (i) the Company’s fair
saleable value of its assets exceeds the amount that will be required to be paid
on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature; (ii) the Company’s
assets do not constitute unreasonably small capital to carry on its business for
the current fiscal year as now conducted and as proposed to be conducted,
including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected capital
requirements and capital availability thereof; and (iii) the current cash flow
of the Company, together with the proceeds the Company would receive, were it to
liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debt
when such amounts are required to be paid.  The Company does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).

 

(l)          Defaults.  The Company is not in violation of its certificate of
incorporation or bylaws.  The Company is (i) not in default under or in
violation of any other material agreement or instrument to which it is a party
or by which it or any of its properties are bound or affected, which default or
violation would have a Material Adverse Effect, (ii) not in default with respect
to any order of any court, arbitrator or governmental body or subject to or
party to any order of any court or governmental authority arising out of any
action, suit or proceeding under any statute or other law respecting antitrust,
monopoly, restraint of trade, unfair competition or similar matters which
default would have a Material Adverse Effect, or (iii) not in violation of any
statute, rule or regulation of any governmental authority which violation would
have a Material Adverse Effect.

 

(m)        No Integrated Offering.  Neither the Company, nor any of its
Affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security of the Company nor solicited
any offers to buy any security of the Company under circumstances that would
cause the offer of the Securities pursuant to this Agreement to be integrated
with prior offerings by the Company for purposes of the 1933 Act or any
applicable stockholder approval provisions, including, without limitation, under
the rules and regulations of the Pink Sheets.  No prior offering will impair the
exemptions relied upon in this Offering or the Company’s ability to timely
comply with its obligations hereunder.  Neither the Company nor any of its
Affiliates will take any action or suffer any inaction or conduct any offering
other than the transactions contemplated hereby that may be integrated with the
offer or issuance of the Securities or that would impair the exemptions relied
upon in this Offering or the Company’s ability to timely comply with its
obligations hereunder.

 

8

 

 

(n)          No General Solicitation.  Neither the Company, nor any of its
Affiliates, nor to its knowledge, any person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D under the 1933 Act) in connection with the Offering or
sale of the Securities.

 

(o)          No Undisclosed Liabilities.  The Company has no liabilities or
obligations which are material, individually or in the aggregate, other than
those incurred in the ordinary course of the Company’s business since December
31, 2010, and which, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect, except as disclosed in the Reports
or in Schedule 5(o).

 

(p)          No Undisclosed Events or Circumstances.  Since December 31, 2010,
except as disclosed in the Reports, no event or circumstance has occurred or
exists with respect to the Company or its businesses, properties, operations or
financial condition, that, under applicable law, rule or regulation, requires
public disclosure or announcement prior to the date hereof by the Company but
which has not been so publicly announced or disclosed in the Reports.

 

(q)          Dilution.  The Company’s executive officers and directors
understand the nature of the Securities being sold hereby and recognize that the
issuance of the Securities will have a potential dilutive effect on the equity
holdings of other holders of the Company’s equity or rights to receive equity of
the Company.  The board of directors of the Company has concluded, in its good
faith business judgment that the issuance of the Securities is in the best
interests of the Company.  The Company specifically acknowledges that its
obligation to issue the Conversion Shares upon conversion of the Notes and the
Warrant Shares upon exercise of the Warrants is binding upon the Company and
enforceable regardless of the dilution such issuance may have on the ownership
interests of other stockholders of the Company or parties entitled to receive
equity of the Company.

 

(r)          No Disagreements with Accountants and Lawyers.  There are no
material disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers
previously and presently employed by the Company, including, but not limited to,
disputes or conflicts over payment owed to such accountants and lawyers, nor
have there been any such disagreements during the two years prior to the Closing
Date.

 

(s)          Investment Company.  Neither the Company nor any Affiliate of the
Company is an “investment company” within the meaning of the Investment Company
Act of 1940, as amended.

 

(t)          Foreign Corrupt Practices.  Neither the Company, nor to the
knowledge of the Company, any agent or other person acting on behalf of the
Company, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed to
disclose fully any contribution made by the Company (or made by any person
acting on its behalf of which the Company is aware) which is in violation of
law, or (iv) violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended.

 

9

 

(u)          Reporting Company/Shell Company.  The Company is a publicly-held
company.  As of the Closing Date, the Company is not a “shell company” but is a
“former shell company” as those terms are employed in Rule 144 under the 1933
Act.  Except with respect to the Form 10-Q for the three month period ended
January 31, 2011 that is being reviewed by the Commission as of the date hereof,
pursuant to the provisions of the 1934 Act, the Company has timely filed all
reports and other materials required to be filed thereunder with the Commission
during the preceding twelve months.

 

(v)          Listing.  The Company’s Common Stock is quoted on the Pink Sheets
(“Pink Sheets”) under the symbol “WIZD”.  The Company has not received any
pending oral or written notice that its Common Stock is not eligible nor will
become ineligible for quotation on the Pink Sheets nor that its Common Stock
does not meet all requirements for the continuation of such quotation.

 

(w)          DTC Status.  The Company’s transfer agent is a participant in, and
the Common Stock is or shall be eligible for transfer pursuant to, the
Depository Trust Company Automated Securities Transfer Program.  The name,
address, telephone number, fax number, contact person and email address of the
Company transfer agent is set forth on Schedule 5(w) hereto.

 

(x)          Company Predecessor and Subsidiaries.  The Company makes each of
the representations contained in Sections 5(a), (b), (c), (d), (e), (f), (h),
(j), (k), (l), (o), (p), (r), (s) and (t) of this Agreement, as same relate or
could be applicable to each Subsidiary.  All representations made by or relating
to the Company of a historical or prospective nature and all undertakings
described in Section 9 hereto shall relate, apply and refer to the Company and
the Subsidiaries and their predecessors and successors.

 

(y)          Correctness of Representations.  The Company represents that the
foregoing representations and warranties are true and correct as of the date
hereof in all material respects, and, unless the Company otherwise notifies the
Subscribers prior to the Closing Date, shall be true and correct in all material
respects as of the Closing Date; provided that if such representation or
warranty is made as of a different date, such representation or warranty shall
be true as of such date.

 

(z)          Survival.  The foregoing representations and warranties shall
survive the Closing Date.

 

6.            Regulation D Offering/Legal Opinion.  The offer and issuance of
the Securities to the Subscribers is being made pursuant to an exemption from
the registration provisions of the 1933 Act afforded by Section 4(2) or Section
4(6) of the 1933 Act and/or Rule 506 of Regulation D promulgated thereunder.  On
the Closing Date, the Company will provide an opinion reasonably acceptable to
each Subscriber from the Company’s legal counsel in substantially the form
attached hereto as Exhibit D opining on the availability of an exemption from
registration under the 1933 Act as it relates to the Offering and issuance of
the Securities and other matters reasonably requested by the Subscribers.  The
Company will provide, at the Company’s expense, to the Subscribers such other
legal opinions, if any, as are necessary in each Subscriber’s opinion for the
issuance and resale of the Conversion Shares and Warrant Shares pursuant to an
exemption from registration such as Rule 144 under the 1933 Act.

 

7.            Broker’s Commission/Finder’s Fee. The Company on the one hand, and
each Subscriber (for such Subscriber only) on the other hand, agrees to
indemnify the other against and hold the other harmless from any and all
liabilities to any persons claiming brokerage commissions or similar fees on
account of services purported to have been rendered on behalf of the
indemnifying party in connection with this Agreement or the transactions
contemplated hereby and arising out of such party’s actions.  The Company
represents that to the best of its knowledge there are no parties entitled to
receive fees, commissions, finder’s fees, due diligence fees or similar payments
in connection with the Offering.  Anything in this Agreement to the contrary
notwithstanding, each Subscriber is providing indemnification only for such
Subscriber’s own actions and not for any action of any other Subscriber.  The
liability of the Company and each Subscriber’s liability hereunder is several
and not joint.

 

10

 

8.            Subscriber’s Legal Fees.  The Company shall pay to Grushko &
Mittman, P.C. a cash fee of $3,500 (“Legal Fees”) as reimbursement for services
rendered in connection with the transactions described in the Transaction
Documents.  The Legal Fees will be payable out of funds held pursuant to the
Escrow Agreement.  Grushko & Mittman, P.C. will be reimbursed at Closing or
Initial Closing, as the case may be, by the Company for all lien searches,
filing fees and reasonable printing and shipping costs for the closing
statements to be delivered to the Subscribers.

 

9.            Covenants of the Company.  The Company covenants and agrees with
the Subscribers as follows:

 

(a)          Stop Orders.  Subject to the prior notice requirement described in
Section 9(n) hereof, the Company will advise the Subscribers, within twenty-four
(24) hours after it receives notice of issuance by the Commission, any state
securities commission or any other regulatory authority of any stop order or of
any order preventing or suspending any offering of any securities of the
Company, or of the suspension of the qualification of the Common Stock of the
Company for offering or sale in any jurisdiction, or the initiation of any
proceeding for any such purpose.  The Company will not issue any stop transfer
order or other order impeding the sale, resale or delivery of any of the
Securities, except as may be required by any applicable federal or state
securities laws, provided at least five (5) business days prior notice of such
instruction is given to the Subscribers.

 

(b)          Listing/Quotation.  The Company shall promptly secure the quotation
or listing of the Conversion Shares and Warrant Shares upon each national
securities exchange, or automated quotation system upon which the Company’s
Common Stock is quoted or listed and upon which such Conversion Shares and
Warrant Shares are or become eligible for quotation or listing (subject to
official notice of issuance) and shall maintain same so long as any Notes and
Warrants are outstanding.  The Company will maintain the quotation or listing of
its Common Stock on the NYSE Amex Equities, Nasdaq Capital Market, Nasdaq Global
Market, Nasdaq Global Select Market, OTC Markets, or New York Stock Exchange
(whichever of the foregoing is at the time the principal trading exchange or
market for the Common Stock) (the “Principal Market”), and will comply in all
respects with the Company’s reporting, filing and other obligations under the
bylaws or rules of the Principal Market, as applicable. Subject to the
limitation set forth in Section 9(n) hereof, the Company will provide the
Subscribers with copies of all notices it receives notifying the Company of the
threatened and actual delisting of the Common Stock from any Principal
Market.  As of the date of this Agreement and the Closing Date, the OTC Pink is
the Principal Market.

 

(c)          Market Regulations.  If required, the Company shall notify the
Commission, the Principal Market and applicable state authorities, in accordance
with their requirements, of the transactions contemplated by this Agreement, and
shall take all other necessary action and proceedings as may be required and
permitted by applicable law, rule and regulation, for the legal and valid
issuance of the Securities to the Subscribers and promptly provide copies
thereof to the Subscribers.

 

11

 

(d)          Filing Requirements.  Commencing on the four month anniversary
after the date of this Agreement and until the last to occur of (i) all the
Conversion Shares have been resold or transferred by the Subscribers pursuant to
a registration statement or pursuant to Rule 144(b)(1)(i), or (ii) none of the
Notes and Warrants are  outstanding (the date of such latest occurrence being
the “End Date”), the Company will (A) voluntarily comply with all reporting and
filing requirements that are applicable to an issuer subject to reporting
obligations pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended (the “1934 Act”) even if the Company is not subject to such reporting
requirements sufficient to permit the Subscribers to be able to resell the
Conversion Shares and Warrant Shares pursuant to Rule 144(b)(i), (B) voluntarily
comply with all reporting requirements that are applicable to an issuer with a
class of shares registered pursuant to Section 12(g) of the 1934 Act even if the
Company is not subject to such reporting requirements sufficient to permit the
Subscribers to be able to resell the Conversion Shares and Warrant Shares
pursuant to Rule 144(b)(i) and (C) comply with all requirements related to any
registration statement filed pursuant to this Agreement.  The Company will use
its commercially reasonable best efforts not to take any action or file any
document (whether or not permitted by the 1933 Act or the 1934 Act or the rules
thereunder) to terminate or suspend such registration or to terminate or suspend
its reporting and filing obligations under said acts until the End Date.  Until
the End Date, the Company will continue the listing or quotation of the Common
Stock on a Principal Market and will comply in all respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the
Principal Market.  The Company agrees to timely file a Form D with respect to
the Securities if required under Regulation D and to provide a copy thereof to
each Subscriber promptly after such filing.

 

(e)          Use of Proceeds.  The proceeds of the Offering will be
substantially employed by the Company for the purposes set forth on Schedule
9(e) hereto.  Except as described on Schedule 9(e), the Purchase Price may not
and will not be used for accrued and unpaid officer and director salaries, nor
payment of financing related debt nor redemption of outstanding notes or equity
instruments of the Company nor non-trade payables outstanding on the Closing
Date.

 

(f)          Reservation.  Prior to the Closing or Initial Closing, as the case
may be, the Company undertakes to reserve on behalf of the Subscribers from its
authorized but unissued Common Stock, a number of shares of Common Stock equal
to 150% of the amount of Common Stock necessary to allow the Subscribers to be
able to convert all of the Notes and 100% of the amount of Warrant Shares
issuable upon exercise of the Warrants (“Required Reservation”).  Failure to
have sufficient shares reserved pursuant to this Section 9(f) at any time prior
to the End Date shall be a material default of the Company’s obligations under
this Agreement and an Event of Default as employed in the Notes.  Without
waiving the foregoing requirement, if at any time the Notes and Warrants are
outstanding the Company has reserved on behalf of the Subscribers less than 125%
of the amount necessary for full conversion of the outstanding Notes and
interest accrued on such Notes at the conversion price in effect on every such
date and 100% of the Warrant Shares issuable upon exercise of outstanding
Warrants (“Minimum Required Reservation”), the Company will promptly reserve the
Minimum Required Reservation, or if there are insufficient authorized and
available shares of Common Stock to reserve the Minimum Required Reservation,
the Company will take all action necessary to increase its authorized capital to
be able to fully satisfy its reservation requirements hereunder, including the
filing of a preliminary proxy with the Commission not later than fifteen (15)
days after the first day the Company has reserved less than the Minimum Required
Reservation.  The Company agrees to provide notice to the Subscribers not later
than five days after the date the Company has less than the Minimum Required
Reservation reserved on behalf of the Subscribers.

 

(g)           DTC Program.  At all times that the Notes or Warrants are
outstanding, the Company will employ as the transfer agent for the Common Stock,
Conversion Shares and Warrant Shares a participant in the Depository Trust
Company Automated Securities Transfer Program.

 

(h)          Taxes.  From the date of this Agreement and until the End Date, the
Company will promptly pay and discharge, or cause to be paid and discharged,
when due and payable, all lawful taxes, assessments and governmental charges or
levies imposed upon the income, profits, property or business of the Company;
provided, however, that any such tax, assessment, charge or levy need not be
paid if the validity thereof shall currently be contested in good faith by
appropriate proceedings and if the Company shall have set aside on its books
adequate reserves with respect thereto, and provided, further, that the Company
will pay all such taxes, assessments, charges or levies forthwith upon the
commencement of proceedings to foreclose any lien which may have attached as
security therefore.

 

12

 

(i)          Insurance.  As reasonably necessary as determined by the Company,
from the date of this Agreement and until the End Date, the Company will keep
its assets which are of an insurable character insured by financially sound and
reputable insurers against loss or damage by fire, explosion and other risks
customarily insured against by companies in the Company’s line of business and
location, in amounts and to the extent and in the manner customary for companies
in similar businesses similarly situated and located and to the extent available
on commercially reasonable terms.

 

(j)          Books and Records.  From the date of this Agreement and until the
End Date, the Company will keep true records and books of account in which full,
true and correct entries in all material respects will be made of all dealings
or transactions in relation to its business and affairs in accordance with
United States generally accepted accounting principles (“GAAP”) applied on a
consistent basis.

 

(k)          Governmental Authorities.  From the date of this Agreement and
until the End Date, the Company shall duly observe and conform in all material
respects to all valid requirements of governmental authorities relating to the
conduct of its business or to its properties or assets.

 

(l)          Intellectual Property.  From the date of this Agreement and until
the End Date, the Company shall maintain in full force and effect its corporate
existence, rights and franchises and all licenses and other rights to use
intellectual property owned or possessed by it and reasonably deemed to be
necessary to the conduct of its business, unless it is sold for value.  Schedule
9(l) hereto identifies all of the intellectual property owned by the Company and
the Subsidiaries, which schedule includes, but is not limited to, patents,
patents pending, patent applications, trademarks, tradenames, service marks and
copyrights.

 

(m)          Properties.  From the date of this Agreement and until the End
Date, the Company will keep its properties in good repair, working order and
condition, reasonable wear and tear excepted, and from time to time make all
necessary and proper repairs, renewals, replacements, additions and improvements
thereto as the Company shall reasonably determine; and the Company will at all
times comply with each provision of all leases and claims to which it is a party
or under which it occupies or has rights to property if the breach of such
provision could reasonably be expected to have a Material Adverse Effect.  The
Company will not abandon any of its assets, except for those assets which have
negligible or marginal value , are obsolete or for which it is prudent to do so
under the circumstances as reasonably determined by the Company.

 

(n)          Confidentiality/Public Announcement.  From the date of this
Agreement  until the End Date, the Company agrees that except in connection with
a Form 8-K, Form 10-Q, Form 10-K and the registration statement or statements
regarding the Subscribers’ Securities or in correspondence with the Commission
regarding same, it will not disclose publicly or privately the identity of a
Subscriber unless expressly agreed to in writing by such Subscriber or only to
the extent required by law and then only upon not less than two (2) business
days prior notice to such Subscriber.  In any event and subject to the
foregoing, the Company undertakes to file a Form 8-K describing the Offering no
later than the fourth (4th) day of the Closing Date.  Prior to the filing of
such Form 8-K, a draft in the final form will be provided for Subscribers’
review and approval.  In the Form 8-K, the Company will specifically disclose
the amount of Common Stock outstanding immediately after the Closing.  Upon 
delivery by the Company to the Subscribers after the Closing Date of any notice
or information, in writing, electronically or otherwise, and while Notes,
Conversion Shares or Warrants are held by the Subscribers, unless the 
Company has in good faith determined that the matters relating to such notice do
not constitute material, nonpublic information relating to the Company or the
Subsidiaries, the Company  shall, within four (4) days after any such delivery,
publicly disclose such  material,  nonpublic  information on a
Report on Form 8-K.  In the event that the Company believes that a notice or
communication to the Subscribers contains material, nonpublic information
relating to the Company or the Subsidiaries, except as required to be delivered
in connection with this Agreement, the Company shall so indicate to the
Subscribers prior to delivery of such notice or information.  A Subscriber will
be granted five (5) days to notify the Company that such Subscriber elects not
to receive such information.  In the case that a Subscriber elects not to
receive such information, the Company will not deliver such information to such
Subscriber.  In the absence of any such Company indication, the Subscribers
shall be allowed to presume that all matters relating to such notice and
information do not constitute material, nonpublic information relating to the
Company or the Subsidiaries.

 

13

 

(o)          Non-Public Information.  The Company covenants and agrees that
except for the Reports, Other Written Information and schedules and exhibits to
this Agreement and the Transaction Documents, which information the Company
undertakes to publicly disclose on the Form 8-K described in Section 9(n) above,
neither it nor any other person acting on its behalf will at any time provide
any Subscriber or its agents or counsel with any information that the Company
believes constitutes material non-public information, unless prior thereto such
Subscriber, its agent or counsel shall have agreed in writing to accept such
information as described in Section 9(n) above.  The Company understands and
confirms that the Subscribers shall be relying on the foregoing representations
in effecting transactions in securities of the Company.  The Company agrees that
any information known to Subscriber required to be made public by the Company
but not made public by the Company, and not already made public by the Company,
may be made public and disclosed by the Subscriber.

 

(p)          Negative Covenants.  So long as Notes are outstanding, without the
consent of a Majority in Interest (as defined herein) of the Subscribers, the
Company will not and will not permit any of its Subsidiaries to directly or
indirectly:

 

(i)          create, incur, assume or suffer to exist any pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
security title, mortgage, security deed or deed of trust, easement or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any lease or title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement perfecting a security interest under the Uniform Commercial
Code or comparable law of any jurisdiction) (each, a “Lien”) upon any of its
property, whether now owned or hereafter acquired, except for:  (a) Liens
imposed by law for taxes that are not yet due or are being contested in good
faith and for which adequate reserves have been established in accordance with
GAAP; (b) carriers,’ warehousemen’s, mechanic’s, material men’s, repairmen’s and
other like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than thirty (30) days or that
are being contested in good faith and by appropriate proceedings; (c) pledges
and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or
regulations; (d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business; (e) Liens created with respect to the financing of the purchase of new
property in the ordinary course of the Company’s business up to the amount of
the purchase price of such property; and (f) easements, zoning restrictions,
rights-of-way and similar encumbrances on real property imposed by law or
arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected
property (each of (a) through (f) hereof, a “Permitted Lien”);

 

(ii)         amend its certificate of incorporation, bylaws or its charter
documents so as to materially and adversely affect any rights of the
Subscribers; provided that an increase in the amount of authorized shares will
not be deemed adverse to the rights of the Subscribers;

 

14

 

(iii)        repay, repurchase or offer to repay, repurchase or otherwise
acquire or make any dividend or distribution in respect of any of its Common
Stock, preferred stock, or other equity securities other than to the extent
permitted or required under the Transaction Documents;

 

(iv)         except with respect to the Securities, engage in any transactions
with any officer, director, employee or any Affiliate of the Company, including
any contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any entity in which any officer,
director or any such employee has a substantial interest or is an officer,
director, trustee or partner, in each case in excess of $100,000, other than (i)
for payment of salary or fees for services rendered, pursuant to and on the
terms of a written contract in effect at least one (1) business day prior to the
Closing Date, a copy of which has been provided to the Subscriber at least one
(1) business day prior to the Closing Date, (ii) reimbursement for authorized
expenses incurred on behalf of the Company or its Affiliates, (iii) for other
employee benefits, including stock option agreements under any stock option plan
of the Company disclosed in the Reports or (iv) other transactions disclosed in
the Reports; or

 

(v)          pay or redeem any financing related debt or past due obligations or
securities outstanding as of the Closing Date, or past due obligations, except
with respect to vendor obligations, which in management’s good faith, reasonable
judgment must be paid to avoid disruption of the Company’s businesses.

 

(q)          [Reserved]

 

(r)           Seniority.  Except for Permitted Liens, for so long as the Notes
are outstanding, without written consent of the Subscribers, the Company and
Subsidiaries shall not grant nor allow any security interest to be taken in any
assets of the Company or any Subsidiary or any Subsidiary’s assets; nor issue or
amend any debt, equity or other instrument which would give the holder thereof
directly or indirectly, a right in any equity of the Company or any Subsidiary
or any right to payment equal to or superior to any right of the Subscribers as
holders of the Notes in or to such equity or payment, nor issue or incur any
debt not in the ordinary course of business in an amount greater than $500,000.

 

(s)          Notices.  For so long as the Subscribers hold any Notes or
Warrants, the Company will maintain a United States address and United States
fax number for notice purposes under the Transaction Documents.

 

(t)           Transactions with Insiders.  So long as the Notes and Warrants are
outstanding, without consent of a Majority in Interest of the Subscribers, the
Company shall not, and shall cause each of its Subsidiaries not to, enter into,
materially amend, materially modify or materially supplement, or permit any
Subsidiary to enter into, materially amend, materially modify or materially
supplement, any agreement, transaction, commitment, or arrangement relating to
the sale, transfer or assignment of any of the Company’s tangible or intangible
assets with any of its Insiders (as defined below) (or any persons who were
Insiders at any time during the previous two (2) years), or any Affiliates (as
defined below) thereof, or with any individual related by blood, marriage, or
adoption to any such individual.  “Affiliate,” for purposes of this Section
9(t), means, with respect to any person or entity, another person or entity
that, directly or indirectly, (i) has a ten percent (10%) or more equity
interest in that person or entity, (ii) has ten percent (10%) or more common
ownership with that person or entity, (iii) controls that person or entity, or
(iv) shares common control with that person or entity.  “Control” or “Controls,”
for purposes of the Transaction Documents, means that a person or entity has the
power, direct or indirect, to conduct or govern the policies of another person
or entity.  For purposes hereof, “Insiders” shall mean any officer, director or
manager of the Company, including, but not limited to, the Company’s president,
chief executive officer, chief financial officer and chief operations officer,
and any of their Affiliates or Immediate Family members.

 

15

 

(u)          Stock Splits.  For so long as the Notes and Warrants are
outstanding, the Company will not enter into any stock splits without the
consent of the Subscribers.

 

(v)          Notice of Event of Default.  The Company agrees to notify
Subscriber of the occurrence of an Event of Default (as defined and employed in
the Transaction Documents) not later than ten (10) days after any of the
Company’s officers or directors becomes aware of such Event of Default.

 

10.          Covenants of the Company Regarding Indemnification.

 

(a)          The Company agrees to indemnify, hold harmless, reimburse and
defend the Subscribers, the Subscribers’ officers, directors, agents, counsel,
Affiliates, members, managers, control persons, and principal shareholders,
against any claim, cost, expense, liability, obligation, loss or damage
(including reasonable legal fees) of any nature, incurred by or imposed upon the
Subscribers or any such person which results, arises out of or is based upon (i)
any material misrepresentation by Company or breach of any representation or
warranty by Company in this Agreement or in any Exhibits or Schedules attached
hereto in any Transaction Document, or other agreement delivered pursuant hereto
or in connection herewith, now or after the date hereof; or (ii) after any
applicable notice and/or cure periods, any breach or default in performance by
the Company of any covenant or undertaking to be performed by the Company
hereunder, or any other agreement entered into by the Company and Subscribers
relating hereto.

 

(b)          In no event shall the liability of the Subscribers or permitted
successor hereunder or under any Transaction Document or other agreement
delivered in connection herewith be greater in amount than the dollar amount of
the net proceeds actually received by such Subscriber or successor upon the sale
of the Notes, Conversion Shares, Warrant and Warrant Shares.

 

           11.         Unlegended Shares and 144 Sales.

 

(a)          Delivery of Unlegended Shares.  Within three (3) days (such third
(3rd) day being the “Unlegended Shares Delivery Date”) after the day on which
the Company has received (i) a notice that Conversion Shares, Warrant Shares or
any other Common Stock held by Subscriber has been sold pursuant to a
registration statement or Rule 144 under the 1933 Act, (ii) a representation
that the prospectus delivery requirements, or the requirements of Rule 144, as
applicable and if required, have been satisfied, (iii) the original share
certificates representing the shares of Common Stock that have been sold, and
(iv) in the case of sales under Rule 144, customary representation letters of
Subscriber and, if required, Subscriber’s broker regarding compliance with the
requirements of Rule 144, the Company, at its expense, (y) shall deliver, and
shall cause legal counsel selected by the Company to deliver to its transfer
agent (with copies to Subscriber) an appropriate instruction directing the
delivery of shares of Common Stock without any legends including the legend set
forth in Section 4(h) above (the “Unlegended Shares”); and (z) cause the
transmission of the certificates representing the Unlegended Shares, together
with a legended certificate representing the balance of the submitted Common
Stock certificate, if any, to Subscriber at the address specified in the notice
of sale, via express courier, by electronic transfer or otherwise on or before
the Unlegended Shares Delivery Date.

 

(b)          DWAC.  In lieu of delivering physical certificates representing the
Unlegended Shares, upon request of the Subscribers, so long as the certificates
therefor do not bear a legend and Subscriber is not obligated to return such
certificate for the placement of a legend thereon, the Company shall cause its
transfer agent to electronically transmit the Unlegended Shares by crediting the
account of Subscriber’s prime broker with the Depository Trust Company through
its Deposit Withdrawal Agent Commission system, if such transfer agent
participates in such DWAC system.  Such delivery must be made on or before the
Unlegended Shares Delivery Date.

 

16

 

(c)          Late Delivery of Unlegended Shares.  The Company understands that a
delay in the delivery of the Unlegended Shares pursuant to Section 11 hereof
later than the Unlegended Shares Delivery Date could result in economic loss to
a Subscriber.  As compensation to a Subscriber for such loss, the Company agrees
to pay late payment fees (as liquidated damages and not as a penalty) to
Subscriber for late delivery of Unlegended Shares in the amount of $100 per
business day after the Unlegended Shares Delivery Date for each $10,000 of
purchase price of the Unlegended Shares, subject to the delivery default;
provided that such delay is not the direct or indirect result of Subscriber’s
actions or omissions.  If during any three hundred sixty (360) day period, the
Company fails to deliver Unlegended Shares as required by this Section 11 for an
aggregate of thirty (30) days, then each Subscriber or assignee holding
Securities subject to such default may, at its option, require the Company to
redeem all or any portion of the Unlegended Shares subject to such default at a
price per share equal to the greater of (i) 110% of the Purchase Price paid by
Subscriber for the Unlegended Shares that were not timely delivered, or (ii) a
fraction in which the numerator is the highest closing price of the Common Stock
during the aforedescribed thirty day period and the denominator of which is the
lowest conversion price or exercise price, as the case may be, during such
thirty (30) day period, multiplied by the price paid by Subscriber for such
Common Stock (“Unlegended Redemption Amount”).  The Company shall promptly pay
any payments incurred under this Section in immediately available funds upon
demand.

 

(d)          Injunction.  In the event a Subscriber shall request delivery of
Unlegended Shares as described in Section 11 and the Company is required to
deliver such Unlegended Shares pursuant to Section 11, the Company may not
refuse to deliver Unlegended Shares based on any claim that such Subscriber or
anyone associated or Affiliated with such Subscriber has not complied with
Subscriber’s obligations under the Transaction Documents, or for any other
reason, unless an injunction or temporary restraining order from a court, on
notice, restraining and or enjoining delivery of such Unlegended Shares, shall
have been sought and obtained by the Company and the Company has posted a surety
bond for the benefit of such Subscriber in the amount of the greater of (i) 125%
of the amount of the aggregate Purchase Price of the Common Stock which is
subject to the injunction or temporary restraining order, (ii) the closing price
of the Common Stock on the trading day before the issue date of the injunction
multiplied by the number of Unlegended Shares to be subject to the injunction,
which bond shall remain in effect until the completion of arbitration/litigation
of the dispute and the proceeds of which shall be payable to such Subscriber to
the extent Subscriber obtains judgment in Subscriber’s favor.

 

(e)          Buy-In.  In addition to any other rights available to Subscriber,
if the Company fails to deliver to Subscriber Unlegended Shares as required
pursuant to this Agreement and after the Unlegended Shares Delivery Date,
Subscriber, or a broker on Subscriber’s behalf, purchases (in an open market
transaction or otherwise) shares of common stock to deliver in satisfaction of a
sale by such Subscriber of the shares of Common Stock which Subscriber was
entitled to receive from the Company (a “Buy-In”), then the Company shall
promptly pay in cash to Subscriber (in addition to any remedies available to or
elected by Subscriber) the amount by which (A) Subscriber’s total purchase price
(including brokerage commissions, if any) for the shares of common stock so
purchased exceeds (B) the aggregate purchase price of the shares of Common Stock
delivered to the Company for reissuance as Unlegended Shares together with
interest thereon at a rate of 15% per annum accruing until such amount and any
accrued interest thereon is paid in full (which amount shall be paid as
liquidated damages and not as a penalty).  For purposes of illustration only, if
Subscriber purchases shares of Common Stock having a total purchase price of
$11,000 to cover a Buy-In with respect to $10,000 of purchase price of shares of
Common Stock delivered to the Company for reissuance as Unlegended Shares, the
Company shall be required to pay the Subscriber $1,000, plus
interest.  Subscriber shall promptly provide the Company written notice
indicating the amounts payable to Subscriber in respect of the Buy-In, including
evidence regarding the purchase of common stock for which the Buy-In is
implemented.

 

17

 

                                (f)          144 Default.  At any time
commencing six (6) months after the Closing Date, in the event Subscriber is not
permitted to sell any of the Conversion Shares or Warrant Shares without any
restrictive legend, or if such sales are permitted but subject to volume
limitations or further restrictions on resale as a result of the unavailability
to Subscriber of Rule 144(b)(1)(i) under the 1933 Act or any successor rule (a
“144 Default”), for any reason, including, but not limited to, failure by the
Company to file quarterly, annual or any other filings required to be made by
the Company by the required filing dates (provided that any filing made within
the time for a valid extension shall be deemed to have been timely filed), or
the Company’s failure to make information publicly available which would allow
Subscriber’s reliance on Rule 144 in connection with sales of Conversion Shares
or Warrant Shares, except due to a change in current applicable securities laws
or because Subscriber is an Affiliate (as defined under Rule 144) of the
Company, then the Company shall pay such Subscriber as liquidated damages and
not as a penalty for each thirty (30) days (or such lesser pro-rata amount for
any period less than thirty (30) days) an amount equal to one percent (1%) of
the purchase price of the Conversion Shares and Warrant Shares subject to such
144 Default.  Liquidated Damages shall not be payable pursuant to this Section
11(e) in connection with Conversion Shares or Warrant Shares for such times as
such shares may be sold by the holder thereof without any legend or volume or
other restrictions pursuant to Section 144(b)(1)(i) of the 1933 Act or pursuant
to an effective registration statement.

 

12.          (a)          Favored Nations Provision.  Other than in connection
with (i) full or partial consideration in connection with a strategic merger,
acquisition, consolidation or purchase of substantially all of the securities or
assets of a corporation or other entity, so long as such issuances are not for
the purpose of raising capital and which holders of such securities or debt are
not at any time granted registration rights, (ii) the Company’s issuance of
securities in connection with strategic license agreements and other partnering
arrangements, so long as such issuances are not for the purpose of raising
capital and which holders of such securities or debt are not at any time granted
registration rights, (iii) the Company’s issuance of Common Stock or the
issuances or grants of options to purchase Common Stock to employees, directors,
and consultants, pursuant to plans described on Schedule 5(d) , (iv) securities
upon the exercise or exchange of or conversion of any securities exercisable or
exchangeable for or convertible into shares of Common Stock issued and
outstanding on the date of this Agreement on the terms disclosed in the Reports
and which securities are also described on Schedule 12(a), and (v) as a result
of the exercise of Warrants or conversion of Notes which are granted or issued
pursuant to this Agreement on the unamended terms in effect on the Closing Date
(collectively, the foregoing (i) through (v) are “Excepted Issuances”), if at
any time the Notes or Warrants are outstanding, the Company shall agree to or
issue (the “Lower Price Issuance”) any Common Stock or securities convertible
into or exercisable for shares of Common Stock (or modify any of the foregoing
which may be outstanding) to any person at a price per share or conversion or
exercise price per share which shall be less than the conversion price in effect
at such time or the Warrant exercise price in effect at such time, as
applicable, without the unanimous consent of all of the Subscribers, then the
conversion price and Warrant exercise price, as applicable, shall automatically
be reduced to such other lower price.  The average conversion price of the
Conversion Shares and average exercise price in relation to the Warrant Shares
shall be calculated separately for the Conversion Shares and Warrant
Shares.  Common Stock issued or issuable by the Company for no consideration or
for consideration that cannot be determined at the time of issue will be deemed
issuable or to have been issued for $0.0001 per share of Common Stock.  For
purposes of the issuance and adjustments described in this paragraph, the
issuance of any security of the Company carrying the right to convert such
security into shares of Common Stock or any warrant, right or option to purchase
Common Stock shall result in the issuance of the additional shares of Common
Stock upon the sooner of (A) the agreement to or (B) actual issuance of such
convertible security, warrant, right or options and again at any time upon any
subsequent issuances of shares of Common Stock upon exercise of such conversion
or purchase rights if such issuance is at a price lower than the conversion
price or Warrant exercise price, as applicable, in effect upon such
issuance.  The rights of the Subscribers set forth in this Section 12 are in
addition to any other rights the Subscribers have pursuant to this Agreement,
the Notes, Warrants or any other Transaction Document.

 

18

 

(b)          Outstanding Rights of First Refusal.  The Company hereby undertakes
to provide within five business days after the Closing Date the notice required
pursuant to Sections 12(b) (“Right of First Refusal”) of each of the
subscription agreements it entered into on December 6, 2010 and April 18, 2011,
respectively  (the “Previous Subscription Agreements”).  In the event any
subscriber to the Previous Subscription Agreements (“Prior Subscriber”) elects
to exercise its Right of First Refusal pursuant to Sections 12(b) of the
Previous Subscription Agreements (the “Additional Investment”), the Company
shall have the right within 20 days after the Closing Date, to use the
Additional Investment to repay such amount of Note principal, including interest
thereon, as shall equal the amount of the Additional Investment (“Recession
Payment”).  Within 5 days after the Subscriber’s receipt of the Recession
Payment, the Subscriber will return the original Note and Warrant to the Company
in exchange for a Note and Warrant corresponding to the Subscriber’s remaining
Note principal, interest and Warrants if any.

 

(c)          Maximum Exercise of Rights.  Notwithstanding the foregoing, in the
event the exercise of the rights described in Section 12(a) would or could
result in the issuance of an amount of Common Stock of the Company that would
exceed the maximum amount that may be issued to a Subscriber as described in
Section __ of the Notes and Section 9 of the Warrant, then the issuance of such
additional shares of Common Stock of the Company to such Subscriber will be
deferred in whole or in part until such time as such Subscriber is able to
beneficially own such Common Stock without exceeding the applicable maximum
amount set forth and such Subscriber notifies the Company accordingly.

 

13.         Miscellaneous.

 

(a)          Notices.  All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice in accordance with this Section 13(a).  Any
notice or other communication required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery or delivery by facsimile with
accurate confirmation generated by the transmitting facsimile machine at the
address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received), or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be: (i)
if to the Company, to: Wizard World, Inc., 1350 Avenue of the Americas, 2nd
Floor, New York, NY 10019, Attn: Gareb Shamus, facsimile: (212) 707-8180, with a
copy by fax only to (which shall not constitute notice):Lucosky Brookman LLP, 33
Wood Avenue South, 6th Floor, Iselin, NJ 10019, Attn: Joseph M. Lucosky, Esq.,
facsimile: (732) 395-4401, and (ii) if to a Subscriber, to: the addresses and
fax numbers indicated on Schedule 1 hereto, with an additional copy by fax only
to (which shall not constitute notice): Grushko & Mittman, P.C., 515 Rockaway
Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575.

 

 (b)          Entire Agreement; Assignment.  This Agreement and other documents
delivered in connection herewith represent the entire agreement between the
parties hereto with respect to the subject matter hereof and may be amended only
by a writing executed by all parties.  Neither the Company nor the Subscribers
has relied on any representations not contained or referred to in this Agreement
or the other Transaction Documents.  No right or obligation of the Company shall
be assigned without prior notice to and the written consent of the Subscribers.

 

19

 

(c)          Counterparts/Execution.  This Agreement may be executed in any
number of counterparts and by the different signatories hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.  This
Agreement may be executed by facsimile transmission, PDF, electronic signature
or other similar electronic means with the same force and effect as if such
signature page were an original thereof.

 

(d)          Law Governing this Agreement.  This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
regard to principles of conflicts of laws thereof or any other State.  Any
action brought by any party hereto against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts of New
York or in the federal courts located in the state and county of New York.  The
parties to this Agreement hereby irrevocably waive any objection to jurisdiction
and venue of any action instituted hereunder and shall not assert any defense
based on lack of jurisdiction or venue or based upon forum non conveniens.  The
parties executing this Agreement and other agreements referred to herein or
delivered in connection herewith on behalf of the Company agree to submit to the
in personam jurisdiction of such courts and hereby irrevocably waive trial by
jury.  The prevailing party shall be entitled to recover from the other party
its reasonable attorney’s fees and costs.  In the event that any provision of
this Agreement or any other agreement delivered in connection herewith is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law.  Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision of any
agreement.  Each party hereto hereby irrevocably waives personal service of
process and consents to process being served in any suit, action or proceeding
in connection with this Agreement or any other Transaction Document by mailing a
copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.

 

(e)          Specific Enforcement, Consent to Jurisdiction.  The Company and
each Subscriber hereby irrevocably waives, and agrees not to assert in any such
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction in New York of such court, that the suit, action or proceeding is
brought in an inconvenient forum or that the venue of the suit, action or
proceeding is improper.  Nothing in this Section shall affect or limit any right
to serve process in any other manner permitted by law.  Subject to Section 13(d)
hereof, the Company and the Subscribers acknowledge and agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached.  It is accordingly agreed that the parties hereto shall be entitled to
seek an injunction or injunctions to prevent or cure breaches of the provisions
of this Agreement and to enforce specifically the terms and provisions hereof,
this being in addition to any other remedy to which any of them may be entitled
by law or equity.

 

(f)          Damages.  In the event the Subscriber is entitled to receive any
liquidated or other damages pursuant to the Transactions Documents, the
Subscriber may elect to receive the greater of actual damages or such liquidated
damages.  In the event the Subscriber is granted rights under different sections
of the Transaction Documents relating to the same subject matter or which may be
exercised contemporaneously, or pursuant to which damages or remedies are
different, Subscriber is granted the right in Subscriber’s absolute discretion
to proceed under such section as Subscriber elects.

 

20

 

(g)          Maximum Payments.  Nothing contained herein or in any document
referred to herein or delivered in connection herewith shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law.  In the event that the rate
of interest or dividends required to be paid or other charges hereunder exceed
the maximum permitted by such law, any payments in excess of such maximum shall
be credited against amounts owed by the Company to the Subscribers and thus
refunded to the Company.  The Company agrees that it may not and actually waives
any right to challenge the effectiveness or applicability of this Section 13(g).

 

(h)          Calendar Days.  All references to “days” in the Transaction
Documents shall mean calendar days unless otherwise stated.  The terms “business
days” and “trading days” shall mean days that the New York Stock Exchange is
open for trading for three or more hours.  Time periods shall be determined as
if the relevant action, calculation or time period were occurring in New York
City.  Any deadline that falls on a non-business day in any of the Transaction
Documents shall be automatically extended to the next business day and interest,
if any, shall be calculated and payable through such extended period.

 

(i)          Captions; Certain Definitions.  The captions of the various
sections and paragraphs of this Agreement have been inserted only for the
purposes of convenience; such captions are not a part of this Agreement and
shall not be deemed in any manner to modify, explain, enlarge or restrict any of
the provisions of this Agreement.  As used in this Agreement the term “person”
shall mean and include an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.

 

(j)          Consent.  As used in this Agreement and the other Transaction
Documents and any other agreement delivered in connection herewith, “Consent of
the Subscribers” or similar language means the consent of holders of not less
than seventy percent (70%) of the outstanding Notes on the date consent is
requested (such Subscribers being a “Majority in Interest”).  A Majority in
Interest may consent to take or forebear from any action permitted under or in
connection with the Transaction Documents, modify any Transaction Documents or
waive any default or requirement applicable to the Company, the Subsidiaries or
the Subscribers under the Transaction Documents, provided the effect of such
action does not waive any accrued interest or damages and further provided that
the relative rights of the Subscribers to each other remains unchanged.

 

(k)         Severability.  In the event that any term or provision of this
Agreement shall be finally determined to be superseded, invalid, illegal or
otherwise unenforceable pursuant to applicable law by an authority having
jurisdiction and venue, that determination shall not impair or otherwise affect
the validity, legality or enforceability: (i) by or before that authority of the
remaining terms and provisions of this Agreement, which shall be enforced as if
the unenforceable term or provision were deleted, or (ii) by or before any other
authority of any of the terms and provisions of this Agreement.

 

(l)          Successor Laws.  References in the Transaction Documents to laws,
rules, regulations and forms shall also include successors to and functionally
equivalent replacements of such laws, rules, regulations and forms.  A successor
rule to Rule 144(b)(1)(i) shall include any rule that would be available to a
non-Affiliate of the Company for the sale of Common Stock not subject to volume
restrictions and after a six month holding period.

 

(m)      Maximum Liability.  In no event shall the liability of the Subscribers
or permitted assign hereunder or under any Transaction Document or other
agreement delivered in connection herewith be greater in amount than the dollar
amount of the net proceeds actually received by such Subscriber or successor
upon the sale of Conversion Shares.

 

21

 

(n)          Independent Nature of Subscribers.  The Company acknowledges that
the obligations of each Subscriber under the Transaction Documents are several
and not joint with the obligations of any other Subscriber, and no Subscriber
shall be responsible in any way for the performance of the obligations of any
other Subscriber under the Transaction Documents. The Company acknowledges that
each Subscriber has represented that the decision of each Subscriber to purchase
Securities has been made by such Subscriber independently of any other
Subscriber and independently of any information, materials, statements or
opinions as to the business, affairs, operations, assets, properties,
liabilities, results of operations, condition (financial or otherwise) or
prospects of the Company which may have been made or given by any other
Subscriber or by any agent or employee of any other Subscriber, and no
Subscriber or any of its agents or employees shall have any liability to any
other Subscriber (or any other person) relating to or arising from any such
information, materials, statements or opinions.  The Company acknowledges that
nothing contained in any Transaction Document, and no action taken by any
Subscriber pursuant hereto or thereto shall be deemed to constitute the
Subscribers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Subscribers are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents.  The Company acknowledges that it has
elected to provide all Subscribers with the same terms and Transaction Documents
for the convenience of the Company and not because Company was required or
requested to do so by the Subscribers.  The Company acknowledges that such
procedure with respect to the Transaction Documents in no way creates a
presumption that the Subscribers are in any way acting in concert or as a group
with respect to the Transaction Documents or the transactions
contemplated thereby.

 

(o)          Equal Treatment.  No consideration shall be offered or paid to any
person to amend or consent to a waiver or modification of any provision of the
Transaction Documents unless the same consideration is also offered and paid to
all the Subscribers and their permitted successors and assigns.

 

(p)          Adjustments.  The conversion price, Warrant exercise price, amount
of Conversion Shares and Warrant Shares, trading volume amounts, price/volume
amounts and similar figures in the Transaction Documents shall be equitably
adjusted and as otherwise described in this Agreement, the Notes and Warrants.

 

[SIGNATURE PAGES FOLLOW]

 

22

 

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

 

Please acknowledge your acceptance of the foregoing Subscription Agreement by
signing and returning a copy to the undersigned whereupon it shall become a
binding agreement between us.

 

  WIZARD WORLD INC.   a Delaware corporation         By:       Name:     Title:
        Dated: __________ ___, 2011

 

SUBSCRIBER   NOTE PRINCIPAL   WARRANTS Name of Subscriber:                      
                Address:                                       Fax No.:        
                      Taxpayer ID# (if applicable):                       or
Social Security #                             (Signature)         By:        

 

23

 

 

LIST OF EXHIBITS AND SCHEDULES

 

Exhibit A Form of Convertible Promissory Note Exhibit B Form of Series A
Warrants Exhibit C Form of Escrow Agreement Exhibit D Form of Legal Opinion
Schedule 1 List of Subscribers Schedule 5(a) Subsidiaries Schedule 5(d)
Capitalization and Additional Issuances Schedule 5(f) Violations and Conflicts
Schedule 5(o) Undisclosed Liabilities Schedule 5(w) Transfer Agent Schedule 9(e)
Use of Proceeds Schedule 9(l) Intellectual Property Schedule 12(a) Excepted
Issuances

 

24

 

 

Exhibit A

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER, AT THE COMPANY’S
EXPENSE), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.

 

Principal Amount: $___________ Issue Date: August __, 2011

 

CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED, WIZARD WORLD, INC., a Delaware corporation (hereinafter
called “Borrower”), hereby promises to pay to the order of [Holder’s name], with
an address at [Holder’s _______________________Address], without demand, the sum
of up to _______ Dollars ($___) (“Principal Amount”), with interest accruing
thereon, on December __, 2011 (the “Maturity Date”), if not sooner paid or
modified as permitted herein.

 

This Convertible Promissory Note (the “Note”)  has been entered into pursuant to
the terms of a subscription agreement by and among the Borrower, the Holder and
certain other holders (the “Other Holders”) of convertible promissory notes (the
“Other Notes”), dated of even date herewith (the “Subscription Agreement”), for
an aggregate Principal Amount of up to $455,000.  Unless otherwise separately
defined herein, each capitalized term used in this Note shall have the same
meaning as set forth in the Subscription Agreement.  The following terms shall
apply to this Note:

 

ARTICLE I

 

GENERAL PROVISIONS

 

1.1           Interest Rate.  Interest payable on this Note shall accrue at the
annual rate of fourteen percent (14%) from the Issue Date through the Maturity
Date.  Interest shall be payable on the Maturity Date, accelerated or otherwise,
when the Principal Amount and remaining accrued but unpaid interest shall be due
and payable, or sooner as described below.

 

1.2           Default Interest.  After the Maturity Date and during the pendency
of an Event of Default (as described in Article III), a default interest rate of
eighteen percent (18%) per annum shall be in effect.

 

1.3           Conversion Privileges.  The Conversion Rights (as set forth in
Article II) shall remain in full force and effect immediately from the Issue
Date and until the Note is paid in full regardless of the occurrence of an Event
of Default.  This Note shall be payable in full on the Maturity Date, unless
previously converted into Common Stock in accordance with Article II hereof.

25

 

1.4        Presentment.  The Holder may, at any time, present this Note or any
sum payable hereunder to the Borrower in satisfaction of any sum due or payable
by the Holder to Borrower for any reason whatsoever, including, but not limited
to, the payment for securities subscriptions.

 

ARTICLE II

 

CONVERSION RIGHTS

 

The Holder shall have the right to convert the Principal Amount and any interest
due under this Note into shares of the Borrower’s Common Stock, $0.0001 par
value per share (“Common Stock”), as set forth below.

 

2.1.        Conversion into the Borrower’s Common Stock.

 

(a)         The Holder shall have the right from and after the Issue Date until
this Note is fully paid, to convert any outstanding and unpaid portion of the
Principal Amount of this Note, and accrued but unpaid interest, at the election
of the Holder (the date of giving of such notice of conversion being a
“Conversion Date”) into fully paid and non-assessable shares of Common Stock ,
or any shares of capital stock of Borrower into which such Common Stock shall
hereafter be changed or reclassified, at the conversion price as defined in
Section 2.1(b) hereof, determined as provided herein.  Upon delivery to the
Borrower of a completed notice of conversion, a form of which is annexed hereto
as Exhibit A (the “Notice of Conversion”), Borrower shall issue and deliver to
the Holder within three (3) business days after the Conversion Date (such third
day being the “Delivery Date”) that number of shares of Common Stock for the
portion of the Note converted in accordance with the foregoing.  The Holder will
not be required to surrender the Note to the Borrower until the Note has been
fully converted or satisfied.  The number of shares of Common Stock to be issued
upon each conversion of this Note shall be determined by dividing that portion
of the Principal Amount of the Note and accrued but unpaid interest, if any, to
be converted, by the Conversion Price (as defined herein).

 

(b)         Subject to adjustment as provided in Section 2.1(c) hereof, the
conversion price (“Conversion Price”) shall be $0.60 per share.

 

(c)         The Conversion Price and number and kind of shares or other
securities to be issued upon conversion determined pursuant to Section 2.1(a)
hereof, shall be subject to adjustment from time to time upon the happening of
certain events while this conversion right (the “Conversion Right”) remains
outstanding, as follows:

 

A.           Merger, Sale of Assets, etc.  If (A) the Borrower effects any
merger or  consolidation of the Borrower with or into another entity, (B) the
Borrower effects any sale of all or substantially all of its assets in one or a
series of related transactions,  (C) any tender offer or exchange offer (whether
by the Borrower or another entity) is completed pursuant to which holders of
Common Stock are permitted to tender or exchange their shares for other
securities, cash or property, (D) the Borrower consummates a stock purchase
agreement or other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of arrangement) with one or
more persons or entities whereby such other persons or entities acquire more
than the 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock held by such other persons or entities making or party to, or
associated or affiliated with the other persons or entities making or party to,
such stock purchase agreement or other business combination), (E) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of
the 1934 Act) is or shall become the “beneficial owner” (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate
Common Stock of the Borrower), or (F) the Borrower effects any reclassification
of the Common Stock or any compulsory share exchange pursuant to which the
Common Stock is effectively converted into or exchanged for other securities,
cash or property (other than a reverse merger) (in any such case, a
“Fundamental  Transaction”), this Note, as to the unpaid portion of the
Principal Amount and accrued interest thereon, if any, shall thereafter be
deemed to evidence the right to convert into such number and kind of shares or
other securities and property as would have been issuable or distributable on
account of such Fundamental Transaction, upon or with respect to the securities
subject to the Conversion Right immediately prior to such Fundamental
Transaction.  The foregoing provision shall similarly apply to successive
Fundamental Transactions of a similar nature by any such successor or
purchaser.  Without limiting the generality of the foregoing, the anti-dilution
provisions of this Section shall apply to such securities of such successor or
purchaser after any such Fundamental Transaction.

26

 

 

B.           Reclassification, etc.  If the Borrower at any time shall, by
reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes that may be issued or
outstanding, this Note, as to the unpaid portion  of the Principal Amount  and
accrued interest thereon, shall thereafter be deemed to evidence the right to
purchase an adjusted number of such securities and kind of securities as would
have been issuable as the result of such change with respect to the Common Stock
immediately prior to such reclassification or other change.

 

C.           Stock Splits, Combinations and Dividends.  If the shares of Common
Stock are subdivided or combined into a greater or smaller number of shares of
Common Stock, or if a dividend is paid on the Common Stock in shares of Common
Stock, the Conversion Price shall be proportionately reduced in case of
subdivision of shares or stock dividend or proportionately increased in the case
of combination of shares, in each such case by the ratio which the total number
of shares of Common Stock outstanding immediately after such event bears to the
total number of shares of Common Stock outstanding immediately prior to such
event.

 

D.           Share Issuance.  So long as this Note is outstanding, if the
Borrower shall issue any Common Stock, except for the Excepted Issuances (as
defined in Section 12(a) of the Subscription Agreement), prior to the complete
conversion or payment of this Note, for a consideration per share that is less
than the Conversion Price that would be in effect at the time of such issue,
then, and thereafter successively upon each such issuance, the Conversion Price
shall be reduced to such other lower issue price.  For purposes of this
adjustment, the issuance of any security or debt instrument of the Borrower
carrying the right to convert such security or debt instrument into Common Stock
or of any warrant, right or option to purchase Common Stock shall result in an
adjustment to the Conversion Price upon the issuance of the above-described
security, debt instrument, warrant, right, or option and again upon the issuance
of shares of Common Stock upon exercise of such conversion or purchase rights if
such issuance is at a price lower than the then applicable Conversion Price.
Common Stock issued or issuable by the Borrower for no consideration will be
deemed issuable or to have been issued for $0.0001 per share of Common
Stock.  The reduction of the Conversion Price described in this paragraph is in
addition to the other rights of the Holder described in the Subscription
Agreement.

 

(d)         Whenever the Conversion Price is adjusted pursuant to Section 2.1(c)
above, the Borrower shall promptly, but not later than the fifth (5th) business
day after the effectiveness of the adjustment, provide notice to the Holder
setting forth the Conversion Price after such adjustment and setting forth a
statement of the facts requiring such adjustment.  Failure to provide the
foregoing notice is an Event of Default under this Note.

 

(e)         During the period the Conversion Right exists, Borrower will reserve
from its authorized and un-issued Common Stock not less than an amount of Common
Stock equal to 150% of the amount of shares of Common Stock issuable upon the
full conversion of this Note.  Borrower represents that upon issuance, such
shares will be duly and validly issued, fully paid and non-assessable.  Borrower
agrees that its issuance of this Note shall constitute full authority to its
officers, agents, and transfer agents who are charged with the duty of executing
and issuing stock certificates to execute and issue the necessary certificates
for shares of Common Stock upon the conversion of this Note.

27

 

 

2.2         Method of Conversion.  This Note may be converted by the Holder in
whole or in part as described in Section 2.1(a) hereof and the Subscription
Agreement.  Upon partial conversion of this Note, a new Note containing the same
date and provisions of this Note shall, at the request of the Holder, be issued
by the Borrower to the Holder for the balance of the Principal Amount of this
Note and accrued but unpaid interest which shall not have been converted or
paid, upon surrender of the existing Note.

 

2.3.        Maximum Conversion.  The Holder shall not be entitled to convert on
a Conversion Date that amount of the Note in connection with that number of
shares of Common Stock which would be in excess of the sum of (i) the number of
shares of Common Stock beneficially owned by the Holder and its Affiliates on a
Conversion Date, (ii) any Common Stock issuable in connection with the
unconverted portion of the Note, and (iii) the number of shares of Common Stock
issuable upon the conversion of the Note with respect to which the determination
of this provision is being made on a Conversion Date, which would result in
beneficial ownership by the Holder and its affiliates of an aggregate of more
than 4.99% of the outstanding shares of Common Stock of the Borrower on such
Conversion Date.  For the purposes of the provision to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the 1934 Act, and Regulation 13d-3 promulgated thereunder.  Subject to
the foregoing, the Holder shall not be limited to aggregate conversions of
4.99%.  The Holder shall have the authority to determine whether the restriction
contained in this Section 2.3 will limit any conversion hereunder and the extent
such limitation applies and to which convertible or exercisable instrument or
part thereof such limitation applies.  The Holder may waive the conversion
limitation described in this Section 2.3, in whole or in part, upon and
effective after 61 days’ prior written notice to the Borrower to increase such
percentage up to 9.99%.

 

ARTICLE III

 

ACCELERATION AND REDEMPTION

 

3.1.        Redemption.  This Note may not be prepaid, converted, redeemed or
called by the Borrower without the consent of the Holder, except as described in
this Note.

 

3.2.        Fundamental Transaction.  Upon the occurrence of a Fundamental
Transaction, then in addition to the Holder’s rights described in Section
2.1(c)(A), until twenty (20) business days after the Borrower notifies the
Holder of the occurrence of the Fundamental Transaction, the Holder may elect to
accelerate the Maturity Date as of the date of the Fundamental Transaction and
receive payment for the then outstanding Principal Amount, and any other amount
owed to the Holder pursuant to the Transaction Documents.

 

ARTICLE IV

 

EVENT OF DEFAULT

 

The occurrence of any of the following events of default (“Event of Default”)
occurring after Closing and not otherwise disclosed in the Subscription
Agreement and schedules thereto, shall, at the option of the Holder hereof, make
all sums of the Principal Amount and accrued but unpaid interest then remaining
unpaid hereon and all other amounts payable hereunder immediately due and
payable, upon demand, without presentment or grace period, all of which hereby
are expressly waived, except as set forth below:

28

 

 

4.1         Failure to Pay Principal Amount or Interest.  The Borrower (i) fails
to pay any installment of the Principal Amount under this Note when due or (ii)
fails to pay any accrued but unpaid interest or other sums due under this Note
within three (3) days after such amounts are due.

 

4.2         Breach of Covenant.  The Borrower or any Subsidiary breaches any
material covenant or other term or condition of the Subscription Agreement,
Transaction Documents or this Note, except for a breach of payment, in any
material respect and such breach, if subject to cure, continues for a period of
twenty (20) days after written notice to the Borrower from the Holder.

 

4.3         Breach of Representations and Warranties.  Any material
representation or warranty of the Borrower made herein, in the Subscription
Agreement, or the Transaction Documents shall be false or misleading in any
material respect.

 

4.4         Liquidation.  Any dissolution, liquidation or winding up by Borrower
or a Subsidiary of a substantial portion of their business.

 

4.5         Cessation of Operations.  Any cessation of operations by Borrower or
a Subsidiary.

 

4.6         Maintenance of Assets.  The failure by Borrower or any Subsidiary to
maintain any material intellectual property rights, personal, real property,
equipment, leases or other assets which are necessary to conduct its business
(whether now or in the future) and such breach is not cured with fifteen (15)
days after written notice to the Borrower from the Holder.

 

4.7         Receiver or Trustee.  The Borrower or any Subsidiary shall make an
assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business; or such a receiver or trustee shall otherwise be
appointed.

 

4.8         Judgments.  Any money judgment, writ or similar final process shall
be entered or made in a non-appealable adjudication against Borrower or any
Subsidiary or any of its property or other assets for more than $100,000 in
excess of the Borrower’s insurance coverage, unless stayed vacated or satisfied
within thirty (30) days.

 

4.9         Bankruptcy.  Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law, or the
issuance of any notice in relation to such event, for the relief of debtors
shall be instituted by or against the Borrower or any Subsidiary.

 

4.10       Delisting.  An event resulting in the Common Stock no longer being
quoted on the OTC Pink (the “OTC”); failure to comply with the requirements for
continued quotation on the OTC for a period of seven (7) consecutive trading
days; or notification from the OTC that the Borrower is not in compliance with
the conditions for such continued quotation and such non-compliance continues
for seven (7) days following such notification.

 

4.11       Non-Payment.  A default by the Borrower or any Subsidiary under any
one or more obligations in an aggregate monetary amount in excess of $100,000
for more than twenty (20) days after the due date, unless the Borrower or such
Subsidiary is contesting the validity of such obligation in good faith.

 

4.12       Stop Trade.  A Commission or judicial stop trade order or OTC
suspension that lasts for ten (10) or more consecutive trading days.

29

 

4.13       Failure to Deliver Common Stock or Replacement Note.  Borrower’s
failures to timely deliver Common Stock to the Holder pursuant to and in the
form required by this Note, Sections 7 and 11 of the Subscription Agreement, and
the Warrant or, if required, a replacement Note following a partial conversion.

 

4.14       Reservation Default.  Failure by the Borrower to have reserved for
issuance upon conversion of the Note or upon exercise of the Warrants, the
number of shares of Common Stock as required in the Subscription Agreement, this
Note and the Warrants, and such failure continues for a period of thirty (30)
business days.

 

4.15       Financial Statement Restatement.  The restatement after the date
hereof of any financial statements filed by the Borrower with the Commission for
any date or period from two years prior to the Issue Date of this Note and until
this Note is no longer outstanding, if the result of such restatement would, by
comparison to the un-restated financial statements, have constituted a Material
Adverse Effect.  For the avoidance of doubt, any restatement related to new
accounting pronouncements, including without limitation, for derivative
accounting shall not constitute a default under this Section 4.15.

 

4.16       [Reserved].

 

4.17       Reverse Splits.  The Borrower effectuates a reverse split of its
Common Stock without twenty (20) days prior written notice to the Holder.

 

4.18       Event Described in Subscription Agreement.  The occurrence of an
Event of Default as described in the Subscription Agreement, any Transaction
Document or the Previous Subscription Agreement that, if susceptible to cure, is
not cured during any designated cure period.

 

4.19       Notification Failure.  A failure by Borrower to notify Holder of any
material event of which Borrower is obligated to notify Holder pursuant to the
terms of this Note or any other Transaction Document.

 

4.20       Cross Default.  A default by the Borrower of a material term,
covenant, warranty or undertaking of any other material agreement to which the
Borrower and Holder are parties, or the occurrence of an event of default under
any such other agreement to which Borrower and Holder are parties which is not
cured after any required notice and/or cure period.

 

4.21       Other Note Default.  The occurrence of an Event of Default under any
Other Note.

 

ARTICLE V

 

MISCELLANEOUS

 

5.1         Failure or Indulgence Not Waiver.  No failure or delay on the part
of the Holder hereof in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege.  All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

30

 

5.2         Notices.  All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the first business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur.  The addresses for
such communications shall be: (i) if to the Borrower to: Wizard World, Inc.,
1350 Avenue of the Americas, 2nd Floor, New York, NY 10019, Attn: Gareb Shamus,
facsimile: (212) 707-8180, with a copy by fax only to (which shall not
constitute notice):Lucosky Brookman LLP, 33 Wood Avenue South, 6th Floor,
Iselin, NJ 10019, Attn: Joseph M. Lucosky, Esq., facsimile: (732) 395-4401, and
(ii) if to the Holder to the name, address and facsimile number set forth on the
front page of this Note, with copies, with an additional copy by fax only to
(which shall not constitute notice): Grushko & Mittman, P.C., 515 Rockaway
Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575.

 

5.3         Amendment Provision.  The term “Note” and all reference thereto, as
used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented.

 

5.4         Assignability.  This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns.  The Borrower may not assign its obligations under this
Note without the written consent of the Holder.

 

5.5         Cost of Collection.  If default is made in the payment of this Note,
Borrower shall pay the Holder hereof reasonable costs of collection, including
reasonable attorneys’ fees.

 

5.6         Governing Law.  This Note shall be governed by and construed in
accordance with the laws of the State of New York without regard to conflicts of
laws principles that would result in the application of the substantive laws of
another jurisdiction.  Any action brought by either party hereto against the
other concerning the transactions contemplated by this Agreement must be brought
only in the civil or state courts of New York or in the federal courts located
in the State and County of New York.  Both parties hereto and the individual
signing this Agreement on behalf of the Borrower agree to submit to the
jurisdiction of such courts.  The prevailing party shall be entitled to recover
from the other party its reasonable attorneys’ fees and costs.  In the event
that any provision of this Note is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or unenforceability of
any other provision of this Note.  Nothing contained herein shall be deemed or
operate to preclude the Holder from enforcing a judgment or other decision in
favor of the Holder.  This Note shall be deemed an unconditional obligation of
Borrower for the payment of money and, without limitation to any other remedies
of Holder, may be enforced against Borrower by summary proceeding pursuant to
New York Civil Procedure Law and Rules Section 3213 or any similar rule or
statute.  For purposes of such rule or statute, any other document or agreement
to which Holder and Borrower are parties or which Borrower delivered to Holder,
which may be convenient or necessary to determine Holder’s rights hereunder or
Borrower’s obligations to Holder are deemed a part of this Note, whether or not
such other document or agreement was delivered together herewith or was executed
apart from this Note.

31

 

 

5.7         Maximum Payments.  Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum rate permitted by applicable law.  In the event that the
rate of interest required to be paid or other charges hereunder exceed the
maximum rate permitted by applicable law, any payments in excess of such maximum
rate shall be credited against amounts owed by the Borrower to the Holder and
thus refunded to the Borrower.

 

5.8         Non-Business Days.  Whenever any payment or any action to be made
shall be due on a Saturday, Sunday or a public holiday under the laws of the
State of New York, such payment may be due or action shall be required on the
next succeeding business day and, for such payment, such next succeeding day
shall be included in the calculation of the amount of accrued interest payable
on such date.

 

5.9         Shareholder Status.  The Holder shall not have rights as a
shareholder of the Borrower with respect to unconverted portions of this
Note.  However, the Holder will have the rights of a shareholder of the Borrower
with respect to the shares of Common Stock to be received after delivery by the
Holder of a Conversion Notice to the Borrower.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

32

 

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an
authorized officer as of the _____ day of August, 2011.

 

    WIZARD WORLD, INC.           By:          Name:       Title:        
WITNESS:                      

33

 

 EXHIBIT A - NOTICE OF CONVERSION

 

(To be executed by the Registered Holder in order to convert the Note)

 

The undersigned hereby elects to convert $_________ of the Principal Amount and
$_________ of the interest due on the Note issued by WIZARD WORLD, INC. on July
__, 2011 into shares of Common Stock of WIZARD WORLD, INC. (the “Borrower”)
according to the conditions set forth in such Note, as of the date written
below.

 

Date of Conversion:   

 

Conversion Price:   

 

Number of Shares of Common Stock Beneficially Owned on the Conversion Date: Less
than 5% of the outstanding Common Stock of WIZARD WORLD, INC.

 

Shares To Be Delivered:   

 

Signature:   

 

Print Name:   

 

Address:           

34

 

 

Exhibit B

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

  Right to Purchase _____ shares of Common Stock of Wizard World, Inc. (subject
to adjustment as provided herein)

 

SERIES A COMMON STOCK PURCHASE WARRANT

 

No. 2011-A-00_ Issue Date: August ___, 2011

 

WIZARD WORLD, INC. (formerly GoEnergy, Inc.), a corporation organized under the
laws of the State of Delaware (the “Company”), hereby certifies that, for value
received [Holder’s name], with an address at [Holder’s
_______________________Address], or its assigns (the “Holder”), is entitled,
subject to the terms set forth below, to purchase from the Company at any time
after the Issue Date until 5:00 p.m., EDT on the five (5) year anniversary of
the Issue Date (the “Expiration Date”), up to _______ (___) fully paid and
non-assessable shares of Common Stock at a per share purchase price of
$0.60.  The aforedescribed purchase price per share, as adjusted from time to
time as herein provided, is referred to herein as the “Purchase Price.”  The
number and character of such shares of Common Stock and the Purchase Price are
subject to adjustment as provided herein.  The Company may reduce the Purchase
Price for some or all of the Warrants, temporarily or permanently, provided such
reduction is made as to all outstanding Warrants for all Holders of such
Warrants.  Capitalized terms used and not otherwise defined herein shall have
the meanings set forth in that certain Subscription Agreement (the “Subscription
Agreement”), dated as of August __, 2011, entered into by the Company, Holder
and the other signatories thereto.

 

As used herein the following terms, unless the context otherwise requires, have
the following respective meanings:

 

(a)         The term “Company” shall mean Wizard World, Inc. (formerly GoEnergy,
Inc.), a Delaware corporation, and any corporation which shall succeed or assume
the obligations of Wizard World, Inc. hereunder.

 

(b)         The term “Common Stock” includes (i) the Company's Common Stock,
$0.0001 par value per share, as authorized on the date of the Subscription
Agreement, and (ii) any other securities into which or for which any of the
securities described in (i) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.

35

 

 

(c)         The term “Other Securities” refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 hereof or otherwise.

 

(d)         The term “Warrant Shares” shall mean the Common Stock issuable upon
exercise of this Warrant.

 

1.           Exercise of Warrant.

 

1.1.        Number of Shares Issuable upon Exercise.  From and after the Issue
Date through and including the Expiration Date, the Holder shall be entitled to
receive, upon exercise of this Warrant in whole in accordance with the terms of
Section 1.2 hereof or upon exercise of this Warrant in part in accordance with
Section 1.3 hereof, shares of Common Stock of the Company, subject to adjustment
pursuant to Section 4 hereof and Sections 12(a) and 14(p) of the Subscription
Agreement.

 

1.2.        Full Exercise.  This Warrant may be exercised in full by the Holder
hereof by delivery to the Company of an original or facsimile copy of the form
of subscription attached as Exhibit A hereto (the “Subscription Form”) duly
executed by such Holder and delivered within two (2) business day thereafter of
payment, in cash, wire transfer or by certified or official bank check payable
to the order of the Company, in the amount obtained by multiplying the number of
shares of Common Stock for which this Warrant is then exercisable by the
Purchase Price then in effect.  The original Warrant is not required to be
surrendered to the Company until it has been fully exercised.

 

1.3.        Partial Exercise.  This Warrant may be exercised in part (but not
for a fractional share) by delivery of a Subscription Form in the manner and at
the place provided in Section 1.2 hereof, except that the amount payable by the
Holder on such partial exercise shall be the amount obtained by multiplying
(a) the number of whole shares of Common Stock designated by the Holder in the
Subscription Form by (b) the Purchase Price then in effect.  On any such partial
exercise, upon the written request of the Holder, provided the Holder has
surrendered the original Warrant, the Company, at its expense, will forthwith
issue and deliver to or upon the order of the Holder a new Warrant of like
tenor, in the name of the Holder hereof or as such Holder (upon payment by such
Holder of any applicable transfer taxes) may request, the whole number of shares
of Common Stock for which such Warrant may still be exercised.

 

1.4.        Fair Market Value.  For purposes of this Warrant, the Fair Market
Value of a share of Common Stock as of a particular date (the “Determination
Date”) shall mean:

 

(a)           If the Company's Common Stock is traded on an exchange or on the
NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market,
the New York Stock Exchange or the NYSE AMEX Equities, then the average of the
closing sale prices of the Common Stock for the five (5) trading days
immediately prior to (but not including) the Determination Date;

 

(b)           If the Company's Common Stock is not traded on an exchange or on
the NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ Capital
Market, the New York Stock Exchange or the NYSE AMEX Equities, but is traded on
the OTC Bulletin Board or in the over-the-counter market or Pink Sheets, then
the average of the closing bid and ask prices reported for the five (5) trading
days immediately prior to (but not including) the Determination Date;

36

 

 

(c)           Except as provided in clause (d) below and Section 3.1 hereof, if
the Company's Common Stock is not publicly traded, then as the Holder and the
Company shall mutually agree, or in the absence of such an agreement after good
faith efforts of the Company and the Holder to reach an agreement, by
arbitration in accordance with the rules then standing of the American
Arbitration Association, before a single arbitrator to be chosen from a panel of
persons qualified by education and training to pass on the matter to be decided;
or

 

(d)           If the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a liquidation, dissolution
or winding up pursuant to the Company's charter, then all amounts to be payable
per share to holders of the Common Stock pursuant to the charter in the event of
such liquidation, dissolution or winding up, plus all other amounts to be
payable per share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all of the shares of
Common Stock then issuable upon exercise of all of the Warrants are outstanding
at the Determination Date.

 

1.5.        Company Acknowledgment.  The Company will, at the time of the
exercise of the Warrant, upon the request of the Holder hereof, acknowledge in
writing its continuing obligation to afford to such Holder any rights to which
such Holder shall continue to be entitled after such exercise in accordance with
the provisions of this Warrant. If the Holder shall fail to make any such
request, such failure shall not affect the continuing obligation of the Company
to afford to such Holder any such rights.

 

1.6.        Delivery of Stock Certificates, etc. on Exercise.  The Company
agrees that, provided the purchase price listed in the Subscription Form is
received as specified in Section 2 hereof, the shares of Common Stock purchased
upon exercise of this Warrant shall be deemed to be issued to the Holder hereof
as the record owner of such shares as of the close of business on the date on
which delivery of a Subscription Form shall have occurred and payment made for
such shares as aforesaid. As soon as practicable after the exercise of this
Warrant in full or in part and the payment is made, and in any event within five
(5) business days thereafter (“Warrant Share Delivery Date”), the Company, at
its expense (including the payment by it of any applicable issue taxes), will
cause to be issued in the name of, and delivered to, the Holder hereof, or as
such Holder (upon payment by such Holder of any applicable transfer taxes) may
direct in compliance with applicable securities laws, a certificate or
certificates for the number of duly and validly issued, fully paid and
non-assessable shares of Common Stock (or Other Securities) to which such Holder
shall be entitled on such exercise, plus, in lieu of any fractional share to
which such Holder would otherwise be entitled, cash equal to such fraction
multiplied by the then Fair Market Value of one full share of Common Stock,
together with any other stock or other securities and property (including cash,
where applicable) to which such Holder is entitled upon such exercise pursuant
to Section 1 hereof or otherwise.  The Company understands that a delay in the
delivery of the Warrant Shares after the Warrant Share Delivery Date could
result in economic loss to the Holder.  As compensation to the Holder for such
loss, the Company agrees to pay (as liquidated damages and not as a penalty) to
the Holder for late issuance of Warrant Shares upon exercise of this Warrant the
proportionate amount of $100 per business day after the Warrant Share Delivery
Date for each $10,000 of Purchase Price of Warrant Shares for which this Warrant
is exercised which are not timely delivered.  The Company shall promptly pay any
payments incurred under this Section in immediately available funds upon
demand.  Furthermore, in addition to any other remedies which may be available
to the Holder, in the event that the Company fails for any reason to effect
delivery of the Warrant Shares by the Warrant Share Delivery Date, the Holder
may revoke all or part of the relevant Warrant exercise by delivery of a written
notice to such effect to the Company, whereupon the Company and the Holder shall
each be restored to their respective positions immediately prior to the exercise
of the relevant portion of this Warrant, except that the liquidated damages
described above shall be payable through the date notice of revocation or
rescission is given to the Company.

37

 

 

1.7.        Buy-In.  In addition to any other rights available to the Holder, if
the Company fails to deliver to a Holder the Warrant Shares as required pursuant
to this Warrant, and the Holder or a broker on the Holder’s behalf, purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by such Holder of the Warrant Shares which the Holder
was entitled to receive from the Company (a “Buy-In”), then the Company shall
pay in cash to the Holder (in addition to any remedies available to or elected
by the Holder) the amount by which (A) the Holder's total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (B) the aggregate Purchase Price of the Warrant Shares
required to have been delivered together with interest thereon at a rate of 15%
per annum, accruing until such amount and any accrued interest thereon is paid
in full (which amount shall be paid as liquidated damages and not as a
penalty).  For purposes of illustration, if a Holder purchases shares of Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to
$10,000 of Purchase Price of Warrant Shares to have been received upon exercise
of this Warrant, the Company shall be required to pay the Holder $1,000, plus
interest.  The Holder shall provide the Company written notice indicating the
amounts payable to the Holder in respect of the Buy-In, which shall include
evidence of the price at which such Holder had to purchase the Common Stock in
an open-market transaction or otherwise.

 

2.           Cashless Exercise.

 

(a)         Payment upon exercise may be made at the written option of the
Holder either in (i) cash, wire transfer or by certified or official bank check
payable to the order of the Company equal to the applicable aggregate Purchase
Price, (ii) by delivery of Common Stock issuable upon exercise of the Warrants
in accordance with Section (b) below or (iii) by a combination of any of the
foregoing methods, for the number of Common Stock specified in such form (as
such exercise number shall be adjusted to reflect any adjustment in the total
number of shares of Common Stock issuable to the Holder per the terms of this
Warrant) and the Holder shall thereupon be entitled to receive the number of
duly authorized, validly issued, fully-paid and non-assessable shares of Common
Stock (or Other Securities) determined as provided herein.  Notwithstanding the
immediately preceding sentence, payment upon exercise may be made in the manner
described in Section 2(b) below only with respect to Warrant Shares not included
for unrestricted public resale in an effective registration statement on the
date notice of exercise is given by the Holder.

 

(b)         If the Fair Market Value of one share of Common Stock is greater
than the Purchase Price (at the date of calculation as set forth below), in lieu
of exercising this Warrant for cash, the Holder may elect to receive shares
equal to the value (as determined below) of this Warrant (or the portion thereof
being cancelled) by delivery of a properly endorsed Subscription Form delivered
to the Company by any means described in Section 13 hereof, in which event the
Company shall issue to the holder a number of shares of Common Stock computed
using the following formula:

 

X=Y (A-B)

          A

 

  Where    X=  the number of shares of Common Stock to be issued to the Holder

 

  Y= the number of shares of Common Stock purchasable under the Warrant or, if
only a portion of the Warrant is being exercised, the portion of the Warrant
being exercised (at the date of such calculation)

 

  A= Fair Market Value

 

  B= Purchase Price (as adjusted to the date of such calculation)

38

 

 

For purposes of Rule 144 promulgated under the 1933 Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction in the manner described above shall be deemed to have been
acquired by the Holder, and the holding period for the Warrant Shares shall be
deemed to have commenced, on the date this Warrant was originally issued
pursuant to the Subscription Agreement.

 

3.           Adjustment for Reorganization, Consolidation, Merger, etc.

 

3.1.        Fundamental Transaction.  If, at any time while this Warrant is
outstanding, (A) the Company  effects any merger or  consolidation  of the
Company with or into another entity, (B) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions,  (C)
any tender offer or exchange offer (whether by the Company or another entity) is
completed pursuant to which holders of Common
Stock are permitted to tender or exchange their shares for other securities,
cash or property, (D) the Company consummates a stock purchase agreement or
other business combination (including, without limitation, a reorganization,
recapitalization, or spin-off) with one or more persons or entities whereby such
other persons or entities acquire more than the 50% of the outstanding shares of
Common Stock (not including any shares of Common Stock held by such other
persons or entities making or party to, or associated or affiliated with the
other persons or entities making or party to, such stock purchase agreement or
other business combination), (E) any “person” or “group” (as these terms are
used for purposes of Sections 13(d) and 14(d) of the 1934 Act) is or shall
become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of 50% of the aggregate Common Stock of the
Company, or (F) the Company effects any reclassification of the Common Stock or
any compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property (in any such
case, a “Fundamental  Transaction”), then, upon any subsequent exercise of this
Warrant, the Holder shall have the right to receive, for each Warrant Share that
would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option of the Holder, (a) upon exercise
of this Warrant, the number of shares of Common Stock of the successor or
acquiring corporation or of the Company, if it is the surviving corporation, and
any additional consideration (the “Alternate Consideration”) receivable upon or
as a result of such reorganization, reclassification, merger,
consolidation or disposition of assets by a Holder of the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
event or (b) if the Company is acquired in (1) a transaction where the
consideration paid to the holders of the Common Stock consists solely of cash,
(2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the 1934 Act, or
(3) a transaction involving a person or entity not traded on a national
securities exchange, the Nasdaq Global Select Market, the Nasdaq Global Market
or the Nasdaq Capital Market, cash equal to the Black-Scholes Value (as defined
herein).  For purposes of any such exercise, the determination of the Purchase
Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such Fundamental Transaction, and the Company
shall apportion the Purchase Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different components of
the Alternate Consideration.  If holders of Common Stock are given any choice as
to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such
Fundamental Transaction.  To the extent necessary to effectuate the
foregoing provisions, any successor to the Company or surviving entity in such
Fundamental Transaction shall issue to the Holder a new warrant consistent with
the foregoing provisions and evidencing the Holder's right to exercise such
warrant into Alternate Consideration.  The terms of any agreement pursuant to
which a Fundamental Transaction is effected include terms requiring any such
successor or surviving entity to comply with the provisions of this Section 3.1
and insuring that this Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.  “Black-Scholes Value” shall be determined in accordance with the
Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg
L.P. using (i) a price per share of Common Stock equal to the Volume Weighted
Average Price of the Common Stock for the Trading Day immediately preceding the
date of consummation of the applicable Fundamental Transaction, (ii) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the
remaining term of this Warrant as of the date of such request and (iii) an
expected volatility equal to the 100 day volatility obtained from the HVT
function on Bloomberg L.P. determined as of the Trading Day immediately
following the public announcement of the applicable Fundamental Transaction.

39

 

 

3.2.        Continuation of Terms.  Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 3 hereof, this Warrant shall continue in full force and effect and
the terms hereof shall be applicable to the Other Securities and property
receivable on the exercise of this Warrant after the consummation of such
reorganization, consolidation or merger or the effective date of dissolution
following any such transfer, as the case may be, and shall be binding upon the
issuer of any Other Securities, including, in the case of any such transfer, the
person acquiring all or substantially all of the properties or assets of the
Company, whether or not such person shall have expressly assumed the terms of
this Warrant as provided in Section 4 hereof.

 

3.3         Share Issuance.  Until the Expiration Date, if the Company shall
issue any Common Stock, except for the Excepted Issuances (as defined in the
Subscription Agreement), prior to the complete exercise of this Warrant for a
consideration less than the Purchase Price that would be in effect at the time
of such issuance, then, and thereafter successively upon each such issuance, the
Purchase Price shall be reduced to such other lower price for then outstanding
Warrants.  For purposes of this adjustment, the issuance of any security or debt
instrument of the Company carrying the right to convert such security or debt
instrument into Common Stock or of any warrant to purchase Common Stock shall
result in an adjustment to the Purchase Price upon the issuance of the of the
above-described security, debt instrument, warrant, right, or option if such
issuance is at a price lower than the Purchase Price in effect upon such
issuance and again at any time upon any actual, permitted, optional, or allowed
issuances of shares of Common Stock upon any actual, permitted, optional, or
allowed exercise of such conversion or purchase rights if such issuance is at a
price lower than the Purchase Price in effect upon any actual, permitted,
optional, or allowed such issuance.  Common Stock issued or issuable by the
Company for no consideration will be deemed issuable or to have been issued for
$0.0001 per share of Common Stock.  The reduction of the Purchase Price
described in this Section 3.3 is in addition to the other rights of the Holder
described in the Subscription Agreement.  Upon any reduction of the Purchase
Price, the number of shares of Common Stock that the Holder of this Warrant
shall thereafter, on the exercise hereof, be entitled to receive shall be
adjusted to a number determined by multiplying the number of shares of Common
Stock that would otherwise (but for the provisions of this Section 3.3) be
issuable on such exercise by a fraction of which (a) the numerator is the
Purchase Price that would otherwise (but for the provisions of this Section 3.3)
be in effect, and (b) the denominator is the Purchase Price in effect on the
date of such exercise.

 

4.           Extraordinary Events Regarding Common Stock.  In the event that the
Company shall (a) issue additional shares of Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its outstanding shares
of Common Stock, or (c) combine its outstanding shares of the Common Stock into
a smaller number of shares of Common Stock, then, in each such event, the
Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described in this Section 4.  The number of
shares of Common Stock that the Holder of this Warrant shall thereafter, on the
exercise hereof, be entitled to receive shall be adjusted to a number determined
by multiplying the number of shares of Common Stock that would otherwise (but
for the provisions of this Section 4) be issuable on such exercise by a fraction
of which (a) the numerator is the Purchase Price that would otherwise (but for
the provisions of this Section 4) be in effect, and (b) the denominator is the
Purchase Price in effect on the date of such exercise.

40

 

 

5.           Certificate as to Adjustments.  In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrants or in the Purchase Price, the Company at its expense
will promptly cause its Chief Financial Officer or other appropriate designee to
compute such adjustment or readjustment in accordance with the terms of the
Warrant and prepare a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment is
based, including a statement of (a) the consideration received or receivable by
the Company for any additional shares of Common Stock (or Other Securities)
issued or sold or deemed to have been issued or sold, (b) the number of shares
of Common Stock (or Other Securities) outstanding or deemed to be outstanding,
and (c) the Purchase Price and the number of shares of Common Stock to be
received upon exercise of this Warrant, in effect immediately prior to such
adjustment or readjustment and as adjusted or readjusted as provided in this
Warrant. The Company will forthwith mail a copy of each such certificate to the
Holder of the Warrant and any Warrant Agent (as defined herein) of the Company
(appointed pursuant to Section 10 hereof).  Holder will be entitled to the
benefit of the adjustment regardless of the giving of such notice.  The timely
giving of such notice to Holder is a material obligation of the Company.

 

6.           Reservation of Stock, etc. Issuable on Exercise of Warrant;
Financial Statements.   The Company will at all times reserve and keep
available, solely for issuance and delivery on the exercise of the Warrants, all
shares of Common Stock (or Other Securities) from time to time issuable on the
exercise of the Warrant.  This Warrant entitles the Holder hereof, upon written
request, to receive copies of all financial and other information distributed or
required to be distributed to the holders of the Company's Common Stock.

 

7.           Assignment; Exchange of Warrant.  Subject to compliance with
applicable securities laws, this Warrant, and the rights evidenced hereby, may
be transferred by any registered holder hereof (a “Transferor”).  On the
surrender for exchange of this Warrant, with the Transferor's endorsement in the
form of Exhibit B attached hereto (the “Transferor Endorsement Form”) and
together with an opinion of counsel reasonably satisfactory to the Company that
the transfer of this Warrant will be in compliance with applicable securities
laws, the Company will issue and deliver to or on the order of the Transferor
thereof a new Warrant or Warrants of like tenor, in the name of the Transferor
and/or the transferee(s) specified in such Transferor Endorsement Form (each a
“Transferee”), calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock called for on the face or faces of the Warrant
so surrendered by the Transferor.

 

8.           Replacement of Warrant.  On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of this Warrant, the Company at its
expense, twice only, will execute and deliver, in lieu thereof, a new Warrant of
like tenor.

 

41

 

9.           Maximum Exercise.  The Holder shall not be entitled to exercise
this Warrant on an exercise date, in connection with that number of shares of
Common Stock which would be in excess of the sum of (i) the number of shares of
Common Stock beneficially owned by the Holder and its Affiliates on an exercise
date, and (ii) the number of shares of Common Stock issuable upon the exercise
of this Warrant with respect to which the determination of this limitation is
being made on an exercise date, which would result in beneficial ownership by
the Holder and its Affiliates of more than 4.99% of the outstanding shares of
Common Stock on such date.  For the purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the 1934 Act and Rule 13d-3 thereunder.  Subject to the
foregoing, the Holder shall not be limited to aggregate exercises which would
result in the issuance of more than 4.99%.  The restriction described in this
paragraph may be waived, in whole or in part, upon sixty-one (61) days’ prior
notice from the Holder to the Company to increase such percentage.  The Holder
may decide whether to convert the Note or exercise this Warrant to achieve an
actual 4.99% or increase such ownership position as described above.

 

10.         Warrant Agent.  The Company may, by written notice to the Holder,
appoint an agent (a “Warrant Agent”) for the purpose of issuing Common Stock (or
Other Securities) on the exercise of this Warrant pursuant to Section 1 hereof,
exchanging this Warrant pursuant to Section 7 hereof, and replacing this Warrant
pursuant to Section 8 hereof, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such Warrant Agent.

 

11.         Transfer on the Company's Books.  Until this Warrant is transferred
on the books of the Company, the Company may treat the registered holder hereof
as the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

 

12.         Reserved.

 

13.         Notices.  All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received), or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur.  The addresses for
such communications shall be:  (i) if to the Company, to Wizard World, Inc.,
1350 Avenue of the Americas, 2nd Floor, New York, NY 10019, Attn: Gareb Shamus,
with a copy by fax only to (which shall not constitute notice) Lucosky Brookman
LLP, 33 Wood Avenue South, 6th Floor, Iselin, NJ 08830, Attn: Joseph M. Lucosky,
Esq., facsimile: (732) 395-4401, and (ii) if to the Holder, to the address and
facsimile number listed on the first paragraph of this Warrant, with a copy by
fax (which shall not constitute notice) only to Grushko & Mittman, P.C., 515
Rockaway Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575.

42

 

 

14.         Law Governing This Warrant.  This Warrant shall be governed by and
construed in accordance with the laws of the State of New York without regard to
its principles of conflicts of laws or of any other State.  Any action brought
by either party hereto against the other concerning the transactions
contemplated by this Warrant shall be brought only in the state courts of New
York or in the federal courts located in the state and county of New York.  The
parties to this Warrant hereby irrevocably waive any objection to jurisdiction
and venue of any action instituted hereunder and shall not assert any defense
based on lack of jurisdiction or venue or based upon forum non conveniens.  The
Company and the Holder waive trial by jury.  The prevailing party shall be
entitled to recover from the other party its reasonable attorneys’ fees and
costs.  In the event that any provision of this Warrant or any other agreement
delivered in connection herewith is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform to, such statute or rule of law.  Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of any agreement.  Each party hereto
hereby irrevocably waives personal service of process and consents to process
being served in any suit, action or proceeding in connection with this Warrant
or any other Transaction Document by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Warrant and agrees that
such service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by law.

 

[Signature Page Follows]

43

 

 

IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.

 

WIZARD WORLD INC.   By:      Gareb Shamus  
President and Chief Executive Officer

44

 

Exhibit A

 

FORM OF SUBSCRIPTION

(to be signed only on exercise of Warrant)

 

TO:  WIZARD WORLD, INC.

 

The undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable box):

 

___  ________ shares of the Common Stock covered by such Warrant; or

 

___ the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in Section 2 of the
Warrant.

 

The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is
$___________.  Such payment takes the form of (check applicable box or boxes):

 

___  $__________ in lawful money of the United States; and/or

 

___ the cancellation of such portion of the attached Warrant as is exercisable
for a total of _______ shares of Common Stock (using a Fair Market Value of
$_______ per share for purposes of this calculation); and/or

 

___ the cancellation of such number of shares of Common Stock as is necessary,
in accordance with the formula set forth in Section 2 of the Warrant, to
exercise this Warrant with respect to the maximum number of shares of Common
Stock purchasable pursuant to the cashless exercise procedure set forth in
Section 2.

 

After application of the cashless exercise feature as described above,
_____________ shares of Common Stock are required to be delivered pursuant to
the instructions below.

 

The undersigned requests that the certificates for such shares be issued in the
name of, and delivered to __________________________________________, whose
address is ___________________________
___________________________________________________________________________________________.

 

The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the “Securities Act”), or pursuant to an exemption from
registration under the Securities Act.

 

Dated:___________________     (Signature must conform to name of holder as  
specified on the face of the Warrant)               (Address)

45

 

Exhibit B

 

FORM OF TRANSFEROR ENDORSEMENT

(To be signed only on transfer of Warrant)

 

For value received, the undersigned hereby sells, assigns, and transfers unto
the person(s) named below under the heading “Transferees” the right represented
by the within Warrant to purchase the percentage and number of shares of Common
Stock of WIZARD WORLD, INC. to which the within Warrant relates specified under
the headings “Percentage Transferred” and “Number Transferred,” respectively,
opposite the name(s) of such person(s) and appoints each such person Attorney to
transfer its respective right on the books of WIZARD WORLD, INC., with full
power of substitution in the premises.

 

Transferees   Percentage Transferred   Number Transferred                      
       

 

Dated:  __________________, _______        
(Signature must conform to name of holder as specified    
on the face of the warrant)       Signed in the presence of:                
(Name)         (address)       ACCEPTED AND AGREED:     [TRANSFEREE]        
(address)             (Name)          

46

 

 

Exhibit C

 

FORM OF ESCROW AGREEMENT

 

This Agreement is dated as of the ____ day of August, 2011 among Wizard World,
Inc. (formerly GoEnergy, Inc.), a Delaware corporation (the “Company”), the
subscribers listed on Schedule 1 hereto (the “Subscribers”), and Grushko &
Mittman, P.C. (the “Escrow Agent”):

 

WITNESSETH:

 

WHEREAS, the Company and the Subscribers have entered into a Subscription
Agreement calling for the sale by the Company to the Subscribers of the Notes
and Series A Warrants (the “Warrants”) for an aggregate purchase price of up to
$455,000; and

 

WHEREAS, the parties hereto require the Company to deliver the Notes and
Warrants against payment therefor, with such Notes, Warrants and the Escrowed
Payment to be delivered to the Escrow Agent, along with the other documents,
instruments and payments hereinafter described, to be held in escrow and
released by the Escrow Agent in accordance with the terms and conditions of this
Agreement; and

 

WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant to the
terms and conditions of this Agreement;

 

NOW THEREFORE, the parties hereto agree as follows:

 

ARTICLE I

INTERPRETATION

 

1.1. Definitions. Capitalized terms used and not otherwise defined herein shall
have the meanings given to such terms in the Subscription Agreement (and the
exhibits and schedules thereto) entered into or to be entered into by the
Company and the Subscribers in reference to the sale and purchase of the Notes
and Warrants (the “Subscription Agreement”). Whenever used in this Agreement,
the following terms shall have the following respective meanings:

 

§ “Agreement” means this Agreement and all amendments made hereto by written
agreement of the parties hereto;

 

§ “Escrowed Payment” means an aggregate cash payment of up to $290,000;

 

§ “Legal Fees” shall have the meaning set forth in Section 8 of the Subscription
Agreement;

 

§ “Legal Opinion” means the original signed legal opinion referred to in Section
6 of the Subscription Agreement;

 

§ “Notes” shall have the meaning set forth in the second recital to the
Subscription Agreement;

 

§ “Subscription Agreement” means the Subscription Agreement (and the exhibits
and schedules thereto) entered into or to be entered into by the Company and
Subscribers in reference to the sale and purchase of the Notes and Warrants;

 

47

 

 

§ “Warrants” shall have the meaning set forth in Section 2(b) of the
Subscription Agreement;

 

§ Collectively, the Legal Opinion, Notes, Warrants, and Subscription Agreement
signed and executed by all signatories thereto other than the Subscribersare
referred to as “Company Documents”; and

 

§ Collectively, the Escrowed Payment and the Subscribers’ executed Subscription
Agreement are referred to as “Subscriber Documents.”

 

1.2. Entire Agreement. This Agreement along with the Company Documents and the
Subscriber Documents to which the Subscriber and the Company are a party
constitute the entire agreement between the parties hereto pertaining to the
Company Documents and Subscriber Documents and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties hereto. There are no warranties, representations and other agreements
made by the parties hereto in connection with the subject matter hereof, except
as specifically set forth in this Agreement, the Company Documents and the
Subscriber Documents.

 

1.3. Extended Meanings. In this Agreement words importing the singular number
include the plural and vice versa; words importing the masculine gender include
the feminine and neuter genders. The word “person” includes an individual, body
corporate, partnership, trustee or trust or unincorporated association,
executor, administrator or legal representative.

 

1.4. Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by all parties hereto, or, in
the case of a waiver, by the party waiving compliance. Except as expressly
stated herein, no delay on the part of any party hereto in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party hereto of any right, power or privilege
hereunder preclude any other or future exercise of any other right, power or
privilege hereunder.

 

1.5. Headings. The division of this Agreement into articles, sections,
subsections and paragraphs, and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement.

 

1.6. Law Governing this Agreement. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
conflicts of laws principles that would result in the application of the
substantive laws of another jurisdiction. Any action brought by any party hereto
against the other concerning the transactions contemplated by this Agreement
shall be brought only in the state courts of New York or in the federal courts
located in the state and county of New York. The parties hereto and the
individuals executing this Agreement and other agreements on behalf of the
Company agree to submit to the jurisdiction of such courts and waive trial by
jury. The prevailing party (which shall be the party which receives an award
most closely resembling the remedy or action sought) shall be entitled to
recover from the other party its reasonable attorneys’ fees and costs. In the
event that any provision of this Agreement or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of any agreement.

 

48

 

 

1.7. Specific Enforcement, Consent to Jurisdiction. The Company and the
Subscribers acknowledge and agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties hereto shall be entitled to an injuction or
injunctions to prevent or cure breaches of the provisions of this Agreement and
to enforce specifically the terms and provisions hereof or thereof, this being
in addition to any other remedy to which any of them may be entitled by law or
equity. Subject to Section 1.6 hereof, each of the Company and the Subscribers
hereby waives, and agrees not to assert in any such suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of such court,
that the suit, action or proceeding is brought in an inconvenient forum or that
the venue of the suit, action or proceeding is improper. Nothing in this Section
shall affect or limit any right to serve process in any other manner permitted
by law.

 

ARTICLE II

DELIVERIES TO THE ESCROW AGENT

 

2.1. Company Deliveries. On or before the Closing Date, the Company shall
execute and deliver the Company Documents to the Escrow Agent.

 

2.2. Subscriber Deliveries. On or before the Closing Date, the Subscribers shall
execute and deliver the Subscription Agreements, and shall deliver the Escrowed
Payment in cash, to the Escrow Agent. The Escrowed Payment will be delivered
pursuant to the following wire transfer instructions:

 

Citibank, N.A.

1155 6th Avenue

New York, NY 10036

ABA Number: 0210-00089

For Credit to: Grushko & Mittman, IOLA Trust Account

Account Number: 45208884

 

2.3. Intention to Create Escrow Over Company Documents and Subscriber Documents.
The Subscribers and Company intend that the Company Documents and Subscriber
Documents shall be held in escrow by the Escrow Agent pursuant to this Agreement
for their respective benefit as set forth herein.

 

2.4. Escrow Agent to Deliver Company Documents and Subscriber Documents. The
Escrow Agent shall hold and release the Company Documents and Subscriber
Documents only in accordance with the terms and conditions of this Agreement.

 

ARTICLE III

RELEASE OF COMPANY DOCUMENTS AND SUBSCRIBER DOCUMENTS

 

 

3.1. Release of Escrow. Subject to the provisions of Section 4.2 hereof, the
Escrow Agent shall release the Company Documents and Subscriber Documents as
follows:

 

(a) On the Closing Date, the Escrow Agent will simultaneously release the
Company Documents to the Subscribers and release the Subscriber Documents to the
Company, except that the Legal Fees will be released directly to the
Subscribers’ attorneys.

 

49

 

 

(b) Notwithstanding the above, upon receipt by the Escrow Agent of joint written
instructions (“Joint Instructions”) signed by the Company and the Subscribers,
it shall deliver the Company Documents and Subscriber Documents in accordance
with the terms of the Joint Instructions.

 

(c) Anything herein to the contrary notwithstanding, upon receipt by the Escrow
Agent of a final and non-appealable judgment, order, decree or award of a court
of competent jurisdiction directing delivery of the Company Documents and
Subscriber Documents (a “Court Order”), the Escrow Agent shall deliver the
Company Documents and Subscriber Documents in accordance with the Court Order.
Any Court Order shall be accompanied by an opinion of counsel for the party
presenting the Court Order to the Escrow Agent (which opinion shall be
satisfactory to the Escrow Agent) to the effect that the court issuing the Court
Order has competent jurisdiction and that the Court Order is final and
non-appealable.

 

3.2. Closings may take place on or before August 15, 2011. After August 15,
2011, the Escrow Agent will promptly return the applicable Company Documents to
the Company and return the Subscriber Documents to the Subscribers.

 

3.3. Acknowledgement of Company and Subscriber; Disputes. The Company and the
Subscribers acknowledge that the only terms and conditions upon which the
Company Documents and Subscriber Documents are to be released are set forth in
Sections 3 and 4 of this Agreement. The Company and the Subscribers reaffirm
their agreement to abide by the terms and conditions of this Agreement with
respect to the release of the Company Documents and Subscriber Documents. Any
dispute with respect to the release of the Company Documents and Subscriber
Documents shall be resolved pursuant to Section 4.2 hereof or by mutual
agreement between the Company and Subscribers.

 

ARTICLE IV

CONCERNING THE ESCROW AGENT

 

4.1. Duties and Responsibilities of the Escrow Agent. The Escrow Agent’s duties
and responsibilities shall be subject to the following terms and conditions:

 

(a) The Subscribers and the Company acknowledge and agree that the Escrow Agent
(i) shall not be responsible for or bound by, and shall not be required to
inquire into whether either the Subscribers or Company is entitled to receipt of
the Company Documents and Subscriber Documents, respectively, pursuant to any
other agreement or otherwise; (ii) shall be obligated only for the performance
of such duties as are specifically assumed by the Escrow Agent pursuant to this
Agreement; (iii) may rely on and shall be protected in acting or refraining from
acting upon any written notice, instruction, instrument, statement, request or
document furnished to it hereunder and believed by the Escrow Agent in good
faith to be genuine and to have been signed or presented by the proper person or
party, without being required to determine the authenticity or correctness of
any fact stated therein or the propriety or validity or the service thereof;
(iv) may assume that any person believed by the Escrow Agent in good faith to be
authorized to give notice or make any statement or execute any document in
connection with the provisions hereof is so authorized; (v) shall not be under
any duty to give the property held by Escrow Agent hereunder any greater degree
of care than Escrow Agent gives its own similar property; and (vi) may consult
counsel satisfactory to Escrow Agent, the opinion of such counsel to be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by Escrow Agent hereunder in good faith and in accordance with the
opinion of such counsel.

 

(b) The Subscribers and Company acknowledge that the Escrow Agent is acting
solely as a stakeholder at their request and that the Escrow Agent shall not be
liable for any action taken by Escrow Agent in good faith and believed by Escrow
Agent to be authorized or within the rights or powers conferred upon Escrow
Agent by this Agreement. The Subscribers and Company, jointly and severally,
agree to indemnify and hold harmless the Escrow Agent and any of Escrow Agent’s
partners, employees, agents and representatives for any action taken or omitted
to be taken by Escrow Agent or any of them hereunder, including the reasonable
fees of outside counsel and other costs and expenses of defending itself against
any claim or liability under this Agreement, except in the case of gross
negligence or willful misconduct on Escrow Agent’s part committed in its
capacity as Escrow Agent under this Agreement. The Escrow Agent shall owe a duty
only to the Subscribers and Company under this Agreement and to no other person.

 

50

 

 

(c) The Subscribers and the Company jointly and severally agree to reimburse the
Escrow Agent for reasonable outside counsel fees, to the extent authorized
hereunder and incurred in connection with the performance of its duties and
responsibilities hereunder.

 

(d) The Escrow Agent may at any time resign as Escrow Agent hereunder by giving
five (5) days’ prior written notice of resignation to the Subscribers and the
Company. Prior to the effective date of the resignation as specified in such
notice, the Subscribers and the Company will issue to the Escrow Agent a Joint
Instruction authorizing delivery of the Company Documents and Subscriber
Documents to a substitute Escrow Agent selected by the Subscribers and the
Company. If no successor Escrow Agent is named by the Subscribers and the
Company, the Escrow Agent may apply to a court of competent jurisdiction in the
State of New York for appointment of a successor Escrow Agent, and to deposit
the Company Documents and Subscriber Documents with the clerk of any such court.

 

(e) Other than in connection with the Legal Fees, the Escrow Agent does not have
and will not have any interest in the Company Documents and Subscriber
Documents, but is serving only as escrow agent, having only possession thereof.
The Escrow Agent shall not be liable for any loss resulting from the making or
retention of any investment in accordance with this Escrow Agreement.

 

(f) This Agreement sets forth exclusively the duties of the Escrow Agent with
respect to any and all matters pertinent thereto and no implied duties or
obligations shall be read into this Agreement.

 

(g) The Escrow Agent shall be permitted to act as counsel for the Subscribers in
any dispute as to the disposition of the Company Documents and Subscriber
Documents, in any other dispute between the Subscribers and the Company, whether
or not the Escrow Agent is then holding the Company Documents and Subscriber
Documents and continues to act as the Escrow Agent hereunder.

 

(h) The provisions of this Section 4.1 shall survive the resignation of the
Escrow Agent or the termination of this Agreement.

 

4.2. Dispute Resolution; Judgments. Resolution of disputes arising under this
Agreement shall be subject to the following terms and conditions:

 

(a) If any dispute shall arise with respect to the delivery, ownership, right of
possession or disposition of the Company Documents and Subscriber Documents, or
if the Escrow Agent shall in good faith be uncertain as to its duties or rights
hereunder, the Escrow Agent shall be authorized, without liability to anyone, to
(i) refrain from taking any action other than to continue to hold the Company
Documents and Subscriber Documents pending receipt of a Joint Instruction from
the Subscribers and the Company, or (ii) deposit the Company Documents and
Subscriber Documents with any court of competent jurisdiction in the State of
New York, in which event the Escrow Agent shall give written notice thereof to
the Subscribers and the Company and shall thereupon be relieved and discharged
from all further obligations pursuant to this Agreement. The Escrow Agent may,
but shall be under no duty to, institute or defend any legal proceedings which
relate to the Company Documents and Subscriber Documents. The Escrow Agent shall
have the right to retain counsel if it becomes involved in any disagreement,
dispute or litigation on account of this Agreement or otherwise determines that
it is necessary to consult counsel.

 

51

 

 

(b) The Escrow Agent is hereby expressly authorized to comply with and obey any
Court Order. In case the Escrow Agent obeys or complies with a Court Order, the
Escrow Agent shall not be liable to the Subscribers and the Company or to any
other person, firm, corporation or entity by reason of such compliance.

 

ARTICLE V

GENERAL MATTERS

 

5.1. Termination. This escrow shall terminate upon the release of all of the
Company Documents and Subscriber Documents or at any time upon the agreement in
writing of the Subscribers and Company.

 

5.2. Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:

 

(a)If to the Company, to:

 

Wizard World, Inc.

1350 Avenue of the Americas, 2nd Floor

New York, NY 10019

Attn: Gareb Shamus

Fax: (212) 707-8180

 

With a copy by fax only to (which shall not constitute notice):

 

Lucosky Brookman LLP

33 Wood Avenue South, 6th Floor

Iselin, NJ 08830

Attn: Joseph M. Lucosky, Esq.

Fax: (732) 395-4401

 

52

 

 

(b)If to the Subscribers, to the addresses set forth on Schedule 1 hereto

 

With a copy by facsimile only to (which shall not constitute notice):

 

Grushko & Mittman, P.C.

515 Rockaway Avenue

Valley Stream, New York 11581

Fax: (212) 697-3575

 

(c)If to the Escrow Agent, to:

 

Grushko & Mittman, P.C.

515 Rockaway Avenue

Valley Stream, New York 11581

Fax: (212) 697-3575

 

or to such other address as any of them shall give to the others by notice made
pursuant to this Section 5.2.

 

5.3. Interest. The Escrowed Payment shall not be held in an interest bearing
account nor will interest be payable in connection therewith. In the event the
Escrowed Payment is deposited in an interest bearing account, the Subscribers
shall be entitled to receive any accrued interest thereon, but only if the
Escrow Agent receives from the Subscriber the Subscribers’ United States
taxpayer identification number and other requested information and forms.

 

5.4. Assignment; Binding Agreement. Neither this Agreement nor any right or
obligation hereunder shall be assignable by any party hereto without the prior
written consent of the other parties hereto. This Agreement shall enure to the
benefit of and be binding upon the parties hereto and their respective legal
representatives, successors and assigns.

 

5.5. Invalidity. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid,
illegal, or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be in any way impaired thereby,
it being intended that all of the rights and privileges of the parties hereto
shall be enforceable to the fullest extent permitted by law.

 

5.6. Counterparts/Execution. This Agreement may be executed in any number of
counterparts and by different signatories hereto on separate counterparts, each
of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument. This Agreement
may be executed by facsimile transmission and delivered by facsimile
transmission.

 

5.7. No Third-Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person.

 

5.8. Agreement. Each of the undersigned states that he has read the foregoing
Escrow Agreement and understands and agrees to it.

 

[REST OF THIS PAGE LEFT INTENTIONALLY BLANK]

 

53

 

 

IN WITNESS WHEREOF, the undersigned have executed and delivered this Escrow
Agreement, as of the date first written above.

 

 

  THE “COMPANY”       WIZARD WORLD INC.
a Delaware corporation           By:        Name:
Title:               ESCROW AGENT:       GRUSHKO & MITTMAN, P.C.              
Name:   Title:

 

 

SUBSCRIBERS:

 

                    Name:     Name:   Title:     Title:                        
        Name:         Title:                                                

 

54

 

 

SCHEDULE 1 - (SUBSCRIBERS)

 

 

SUBSCRIBER

 

NOTE PRINCIPAL WARRANTS                                     TOTALS    

 

55

 

 

Exhibit D

 

 [lbltrhead.jpg]

 

August 19, 2011

 

 

TO:The Subscribers identified on Schedule A hereto:

 

We have acted as special counsel to Wizard World, Inc., a Delaware corporation
(the “Company”), in connection with the offer and sale by the Company of the
Company’s Convertible Promissory Notes (the “Notes”) and Series A Common Stock
Purchase Warrants (the “Warrants”), for the aggregate Purchase Price of $290,000
to the subscribers identified on Schedule A hereto (each a “Subscriber” and
together, the “Subscribers”) in the amounts designated thereon pursuant to the
exemption from registration under the Securities Act of 1933, as amended (the
“Act”), as set forth in Regulation D (“Regulation D”) promulgated thereunder.
Capitalized terms used herein and not otherwise defined shall have the meaning
assigned to them in that certain subscription agreement (the “Agreement”) by and
among the Company and the Subscribers entered into on or about the date hereof.
The Agreement and the agreements described below are sometimes hereinafter
referred to collectively as the “Documents.”

 

In connection with the opinions expressed herein, we have made such examination
of law as we have considered appropriate or advisable for purposes hereof. As to
matters of fact material to the opinions expressed herein, we have relied, with
your permission, upon the representations and warranties as to factual matters
contained in and made by the Company and the Subscribers pursuant to the
Documents and upon certificates and statements of certain government officials
and of officers of the Company as described below. We have also examined
originals or copies of certain corporate documents or records of the Company as
described below:

 

(a)Bylaws of the Company;

(b)Certificate of Incorporation of the Company;

(c)Good Standing Certificate dated August 1, 2011 of the Company (the “Good
Standing Certificate”);

(d)Form of Note;

(e)Escrow Agreement;

(f)Form of Agreement;

(g)Form of Warrants; and

(h)Minutes of the action of the Company’s Board of Directors (the “Board”) or
unanimous written consent of the Board approving the Documents.

 

In rendering this opinion, we have, with your permission, assumed: (a) the
authenticity of all documents submitted to us as originals; (b) the conformity
to the originals of all documents submitted to us as copies; (c) the genuineness
of all signatures; (d) the legal capacity of natural persons; (e) the truth,
accuracy and completeness of the information, factual matters, representations
and warranties contained in all of such documents; (f) the due authorization,
execution and delivery of all such documents by the Subscribers, and the legal,
valid and binding effect thereof on the Subscribers; and (g) that the Company
and the Subscribers will act in accordance with their respective representations
and warranties as set forth

in the Documents.

 

56

 

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We are members of the bar of the State of New York. We express no opinion as to
the laws of any jurisdiction other than New York, Delaware and New Jersey and
the federal laws of the United States of America. We express no opinion with
respect to the effect or application of any other laws. Special rulings of
authorities administering any of such laws or opinions of other counsel have not
been sought or obtained by us in connection with rendering the opinions
expressed herein.

 

1. Based solely on the Good Standing Certificate, the Company and each
Subsidiary is duly incorporated, validly existing and in good standing in the
jurisdictions of its formation; has qualified to do business in each state and
jurisdiction where required, unless the failure to do so would not have a
Material Adverse Effect on its operations; and have the requisite corporate
power and authority to conduct its business, and to own, lease and operate its
properties.

 

2. The Company and each Subsidiary has the requisite corporate power and
authority to execute, deliver and perform its respective obligations under the
Documents. The Documents, and the issuance of the Notes and Warrants on the
Closing Date and the reservation and issuance of Conversion Shares and Warrant
Shares (a) have been duly approved by the Board, as required, and (b) when
issued pursuant to the Agreement and upon delivery, shall be validly issued and
outstanding, fully paid and non-assessable.

 

3. The execution, delivery and performance of the Documents by the Company and
the consummation of the transactions contemplated thereby, will not, with or
without the giving of notice or the passage of time or both:

 

(a) Violate the provisions of the Certificate of Incorporation or bylaws of the
Company or any Subsidiary; or

 

(b) To the best of counsel’s knowledge, violate any judgment, decree, order or
award of any court binding upon the Company or a Subsidiary.

 

4. The Documents constitute the valid and legally binding obligations of the
Company and are enforceable against the Company in accordance with their
respective terms.

 

5. None of the Notes, Warrants, Conversion Shares and Warrant Shares has been
registered under the Act or under the laws of any state or other jurisdiction,
and is or will be issued pursuant to a valid exemption from registration.

 

6. The Company and each Subsidiary has either obtained the approval of the
transactions described in the Documents from its Principal Market, if
applicable, and shareholders, or no such approval is required.

 

Our opinions expressed above are specifically subject to the following
limitations, exceptions, qualifications and assumptions:

 

A. The effect of bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting the relief of debtors or the rights and
remedies of creditors generally, including, without limitation, the effect of
statutory or other law regarding fraudulent conveyances and preferential
transfers.

 

B. Limitations imposed by state law, federal law or general equitable principles
upon the specific enforceability of any of the remedies, covenants or other
provisions of any applicable agreement or upon the availability of injunctive
relief or other equitable remedies, regardless of whether enforcement of any
such agreement is considered in a proceeding in equity or at law.

 

57

 

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C. This opinion letter is governed by, and shall be interpreted in accordance
with, the Legal Opinion Accord (the “Accord”) of the ABA Section of Business Law
(1991), which is incorporated by reference herein. As a consequence, it is
subject to a number of qualifications, exceptions, definitions, limitations on
coverage and other limitations, all as more particularly described in the
Accord, including the General Qualifications and the Equitable Principles
Limitation, and this opinion letter should be read in conjunction therewith.

 

This opinion is rendered as of the date first written above and is solely for
your benefit in connection with the Agreement and may not be relied upon or used
by, circulated, quoted, or referred to, nor may any copies hereof by delivered
to, any other person without our prior written consent. We disclaim any
obligation to update this opinion letter or to advise you of facts,
circumstances, events or developments which hereafter may be brought to our
attention and which may alter, affect or modify the opinions expressed herein.

 

 

      Very truly yours,                    

 

 

 

 

58

 

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SCHEDULE A TO LEGAL OPINION

 

CONVERTIBLE PROMISSORY NOTES

SERIES A COMMON STOCK PURCHASE WARRANTS

 

 

SUBSCRIBER PURCHASE PRICE NOTE PRINCIPAL WARRANTS   $150,000.00 $150,000.00
125,000   $103,100.00 $103,100.00 85,917   $100,000.00 $100,000.00 83,333  
$60,264.67 $60,264.67 50,221   $40,000.00 $40,000.00 33,333 TOTALS $453,364.67
$453,364.67 377,804

 

59

 

 

SCHEDULE 1

 

SUBSCRIBER  

PURCHASE

PRICE

   

NOTE

PRINCIPAL

    WARRANTS  

 

 

 

 

  $ 150,000.00     $ 150,000.00       125,000  

 

 

 

 

  $ 103,100.00     $ 103,100.00       85,917  

 

 

 

 

  $ 100,000.00     $ 100,000.00       83,333  

 

 

 

 

  $ 60,057.54     $ 60, 057.54       50,048  

 

 

 

 

  $ 40,000.00     $ 40,000.00       33,333   TOTALS   $ 453,157.54     $
453,157.54       377,631  

 

60

 

 

SCHEDULE 5(a)

 

SUBSIDIARIES

 

 

Name of Subsidiary   Ownership Interests           Kick the Can Corp., a Nevada
corporation     100 %           Wizard World Digital, Inc., a Nevada corporation
    100 %

 

No exception to the Company’s representation that it owns all of the equity of
the Subsidiaries and rights to receive equity of the Subsidiaries, free and
clear of all liens, encumbrances and claims.

 

Wizard World, Inc. was formerly known as GoEnergy, Inc.

 

Kick the Can Corp. is doing business in New York under the assumed name ‘Wizard
World.’

 

61

 

 

SCHEDULE 5(d)

 

CAPITALIZATION

 

Wizard World, Inc.

 

  1.  Authorized and Outstanding Stock:

 

  (a)  Preferred Stock, par value $.0001 per share – 20,000,000 authorized and
15,510 Series A Convertible Preferred outstanding; and

  (b)  Common Stock, par value $.0001 per share – 80,000,000 shares authorized
and 34,687,735 outstanding pre-dilution.

 

  2.  Outstanding rights to acquire or receive, directly or indirectly, any
equity of the Company (e.g., options, warrants or rights to subscribe to
securities, rights, understandings or obligations convertible into or
exchangeable for or granting any right to subscribe for any shares of capital
stock or other equity interest of the Company):

 

  · Warrants dated November 5, 2010 issued in connection with the Bridge Notes
exercisable for an aggregate of 500,000 shares of common stock at an exercise
price of $.60 per share;

  · An aggregate of 9,760 Series A Convertible Preferred Stock issued December
6, 2010 convertible into an aggregate of 24,400 shares of common stock at a
conversion price of $.40 per share;

  · An aggregate of 487,964 Series A Warrants dated December 6, 2010 exercisable
for an aggregate of 813,273 shares of common stock at an exercise price of $.60
per share;

  · An aggregate of 5,750 Series A Convertible Preferred Stock issued April 18,
2011 convertible into an aggregate of 14,375 shares of common stock at a
conversion price of $.40 per share; and

An aggregate of 287,500 Series A Warrants dated April 16, 2011 exercisable into
an aggregate of 479,167 shares of common stock at an exercise price of $.60 per
share.

 

See also Item 3 below.

 

  3.  Officer, director, employee and consultant stock option or stock incentive
plan or similar plan:

 

Officer, director, employee and consultant stock option

 

  · Non-qualified stock options pursuant to which each of three consultants was
granted 1,000,000 stock options exercisable at $.40 per share; and

  · Non-qualified stock options issued to each director, except for Chairman
Michael Mathews, to purchase up to 150,000 shares of the Company’s common stock
at an exercise price per share equal to the closing price of the Company’s
Common Stock on the execution date of a director agreement entered into between
the Company and such director.

 

Stock incentive plan or similar plan

 

  · 2011 Incentive Stock and Award Plan (to be amended)

 

62

 

 

Subsidiary Kick the Can Corp.

 

  1.  Common Stock, par value $.0001 per share – 60,000,000 authorized and
33,239,840 outstanding.

 

  2.  Outstanding rights to acquire or receive, directly or indirectly, any
equity of the Company (e.g., options, warrants or rights to subscribe to
securities, rights, understandings or obligations convertible into or
exchangeable for or granting any right to subscribe for any shares of capital
stock or other equity interest of the Company):

 

  · Convertible Demand Promissory Note dated November 5, 2010 issued by
GoEnergy, Inc. (now Wizard World, Inc.), as holder, and Kick the Can Corp., as
maker, in the amount of $200,000 with a conversion price of $.40 per share; and

 

  3. Officer, director, employee and consultant stock option or stock incentive
plan or similar plan:

 

None.

 

Subsidiary Wizard World Digital, Inc.

 

  1.  Common Stock, par value $.0001 per share – 25,000,000 authorized and 1,000
outstanding.

 

  2.  Outstanding rights to acquire or receive, directly or indirectly, any
equity of the Company (e.g., options, warrants or rights to subscribe to
securities, rights, understandings or obligations convertible into or
exchangeable for or granting any right to subscribe for any shares of capital
stock or other equity interest of the Company):

 

None

 

  3. Officer, director, employee and consultant stock option or stock incentive
plan or similar plan:

 

None

 

63

 

 

SCHEDULE 5(f)

 

ANTIDILUTION AND REGISTRATION RIGHTS

 

  1.  Triggered anti-dilution rights/reset/repricing:

 

  · Warrants dated November 5, 2010 issued in connection with the Bridge Notes;
exercisable for an aggregate of 500,000 shares at an exercise price of $.60 per
share;

  · An aggregate of 9,760 Series A Convertible Preferred Stock issued December
6, 2010 convertible into an aggregate of 24,400 shares of common stock at a
conversion price of $.40 per share;

  · An aggregate of 487,964 Series A Warrants dated December 6, 2010 exercisable
for an aggregate of 813,273 shares of common stock  at an exercise price of $.60
per share;

  · An aggregate of 5,750 Series A Convertible Preferred Stock issued April 18,
2011 convertible into an aggregate of 14,375 shares of common stock at a
conversion price of  $.40 per share; and

  · An aggregate of 287,500 Series A Warrants dated April 16, 2011 exercisable
into an aggregate of 479,167 shares of common stock at an exercise price of $.60
per share;

  · Non-qualified stock options pursuant to which each of three consultants was
granted 1,000,000 stock options exercisable at $.40 per share; and

  · Non-qualified stock options issued to each director, except for Chairman
Michael Mathews, to purchase up to 150,000 shares of the Company’s common stock
at an exercise price per share equal to the closing price of the Company’s
Common Stock on the execution date of a director agreement entered into between
the Company and such director.

 

  2. Triggered registration rights:

 

  · Warrants dated November 5, 2010 issued in connection with the Bridge Notes;
exercisable for an aggregate of 500,000 shares at an exercise price of $.60 per
share;

  · An aggregate of 9,760 Series A Convertible Preferred Stock issued December
6, 2010 convertible into an aggregate of 24,400 shares of common stock at a
conversion price of $.40 per share;

  · An aggregate of 487,964 Series A Warrants dated December 6, 2010 exercisable
for an aggregate of 813,273 shares of common stock at an exercise price of $.60
per share;

  · An aggregate of 5,750 Series A Convertible Preferred Stock issued April 18,
2011 convertible at a conversion price of $.40 per share; and

  · Series A Warrants dated April 16, 2011 exercisable into an aggregate of
479,167 shares of common stock at an exercise price of $.60 per share ;

  · Non-qualified stock options pursuant to which each of three consultants was
granted 1,000,000 stock options exercisable at $.40 per share; and

  · Non-qualified stock options issued to each director, except for Chairman
Michael Mathews, to purchase up to 150,000 shares of the Company’s common stock
at an exercise price per share equal to the closing price of the Company’s
Common Stock on the execution date of a director agreement entered into between
the Company and such director.

 

64

 

 

SCHEDULE 5(o)

 

UNDISCLOSED LIABILITIES

 

65

 

SCHEDULE 5(w)

 

TRANSFER AGENT

 

VStock Transfer, LLC

77 Spruce Street, Suite 201

Cedarhurst, New York 11516

Attn:  Yoel Goldfeder, Esq.

Chief Executive Officer

 

Phone: (212) 828-8436

Facsimile: (646) 536-3179

Email: yoel@vstocktransfer.com

 

66

 

SCHEDULE 9(e)

 

USE OF PROCEEDS

 

All proceeds will be used for working capital and general corporate.

 

67

 

SCHEDULE 9(l)

 

INTELLECTUAL PROPERTY

 

Wizard World, Inc.

 

  · Website www.wizardworld.com

  · Wizard World Digital newsletter

  · www.pop-fi.com

  · Flash game

  · Android and iPhone apps

  · Integration with iPad

 

Kick the Can Corp.

 

  · Domain name www.wizardworld.com;

  · License to use a subscriber database granted to Kick the Can Corp. by Wizard
Entertainment (d/b/a Gareb Shamus Enterprises, Inc.), the licensor; and

  · The following comic conventions:

 

1. Atlanta Comic Convention, including, without limitation, the assignment of
the Memorandum, dated January 1, 2010, by and between Kick the Can Corp. and Wes
Tillander; and ‘Atlanta Comic Convention’ (non-exclusive).

 

2. Big Apple Comic Convention, including, without limitation, the assignment of
the Memorandum, dated April 1, 2009, by and between Kick the Can Corp. and Big
Apple Tables, LLC; ‘Big Apple Con’; www.bigapplecon.com; and mail and email
lists (non-exclusive).

 

3. Cincinnati Comic Convention, including, without limitation, the assignment of
the Memorandum, dated January 4, 2010, by and between Kick the Can Corp. and
Marc Ballard; and ‘Cincinnati Comic Con’ (non-exclusive).

 

4. Connecticut Comic Convention, including, without limitation, the assignment
of the Memorandum, dated May 2010, by and among Kick the Can Corp. and
Alternative Universe, Mitchell Hallock, Erik Yaeko and Jay Claus; ‘ComiConn’
(non-exclusive); and mail and email lists (non-exclusive).

 

5. Nashville Comic Convention, including, without limitation, the assignment of
the Memorandum, dated January 4, 2010, by and between Kick the Can Corp. and
Marc Ballard; and ‘Nashville Comic Con’ (non-exclusive).

 

6. New England Comic Convention, including, without limitation, the assignment
of the Memorandum, dated November 16, 2009, by and between Kick the Can Corp.
and Harrisons Limited (Harrisons); ‘New England Comic Con’; and ‘NECC’.

 

7. North Coast Comic Convention, including, without limitation, the assignment
of the Memorandum, dated January 2010, by and between Kick the Can Corp. and
Roger Priebe; ‘North Coast Comic Con’ (non-exclusive); and mail and email lists
(non-exclusive).

 

68

 

 

8. Toronto Comic Convention, including, without limitation, the assignment of
the Memorandum, dated June 2009, by and among Kick the Can Corp., Peter Dixon
and Paradise Conventions; ‘Paradise Toronto Comicon’; and
www.torontocomicon.com.

 

9. New Orleans Comic Convention, including, without limitation, the assignment
of a Memorandum or agreement from Ronnie Prudhomme to Kick the Can Corp.;
‘Nola’; Nola Comic Con marks (non-exclusive); and mail and email lists
(non-exclusive).

 

10. Winnipeg (Central Canada) Comic Convention, including, without limitation,
the assignment of a Memorandum or agreement from Michael Damien Paille to Kick
the Can Corp.; ‘Central Canada Comic Con’; C4 marks (non-exclusive); and mail
and email lists ((non-exclusive).

 

Kick the Can Corp. may acquire, if not already owned, the following comic
conventions:

 

11. Houston Comic Convention, including, without limitation, the assignment of a
Memorandum or agreement from Robert Quijano to Kick the Can Corp.; ‘Houston
Comic Con’ (non-exclusive); and mail and email lists ((non-exclusive).

   

12. Mid Ohio Comic Convention, including, without limitation, the assignment of
a Memorandum or agreement from CGC Holdings LLC; ‘Mid-Ohio-Con’; and Ohio
Comic-Con marks

   

13. Austin Comic Convention

   

14. Anaheim Comic Convention

   

15. [Miami Comic Convention]

   

16. Philadelphia Comic Convention

   

17. Chicago Comic Convention

   

18. Los Angeles Comic Convention

 

Wizard World Digital, Inc.

 

Wizard World Girls

 

69

 

 

SCHEDULE 12(a)

 

See Schedule 5(d) hereof

 

70