Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.38

PROMISSORY NOTE

			
	 	 	 
	Principal Amount:
	 	Scottsdale, Arizona
	$600,000.00
	 	March 27, 2008

1. Promise to Pay. For value received, BRC Group LLC, a California limited
liability company (“Maker”), promises to pay to the order of Quepasa Corporation, a Nevada
corporation (“Holder”), at 7550 East Redfield Road, Suite A, Scottsdale, AZ 85250, or at
such other address as the Holder may designate by written notice to Maker, in lawful money of the
United States of America, all amounts advanced by Holder to Maker under the Loan Agreement (defined
below) and this Note. The proceeds of the credit accommodations evidenced by this Note (the
“Loan”) shall be advanced at the times and in the amounts provided in that certain Loan
Agreement of even date herewith between Maker and Holder (the “Loan Agreement”).

2. Required Payments. If not earlier due and payable, Maker agrees to pay all unpaid
principal and all other amounts payable under the provisions of this Note in full on January 8,
2011 (the “Maturity Date”). Maker may prepay this Note in part or in full at any time
prior to the Maturity Date without any penalty or premium.

3. Application of Payments. Unless otherwise specifically designated in the Loan
Agreement, agreed in writing, or required by applicable law, all payments made by Maker and other
credits shall be applied: (a) first, to reimburse Holder for all fees, costs and expenses payable
by Maker under this Note; and (b) second, to principal. Any payment made by Maker must be received
by Holder in immediately available funds no later than 1:00 p.m. Phoenix time in order to receive
same day credit; any payment received thereafter shall be considered to have been made on the
following business day.

4. Warrant and other Ancillary Documents. In connection with making the Loan
evidenced by this Note, Holder and Maker have entered into that certain Equity Interest Purchase
Warrant of even date herewith, pursuant to which Maker has granted Holder the right to acquire up
to 50% of the total issued and outstanding equity interests of Maker (the “Warrant”) and have also
entered into that certain Right of Purchase and Right of First Refusal Agreement of even date
herewith, granting Holder certain rights with respect to the purchase of Maker’s assets or the
equity interests of Maker (the “ROFR Agreement”). Except as provided herein, Holder’s rights under
the Warrant and the ROFR Agreement are separate and distinct from Holder’s rights under this Note
and the Loan Agreement. The indebtedness evidenced by this Note may, at Holder’s election after
the Maturity Date and prior to the Expiration Date (as defined in the Warrant), be applied to pay
the Exercise Price for the Equity Interest under the Warrant.. Exercise of the Warrant, and the
sole and exclusive ownership in and to the Webpage, Developer Content, Work Product (as each of the
foregoing terms is defined in the Webpage Development and Hosting Agreement between Holder and
Maker of approximate date herewith) and all statistical information obtained through the tracking
and monitoring the Webpage, shall be Holder’s sole remedy and recourse for unpaid amounts under
this Note.

5. Collection Costs. If suit, arbitration or other legal proceeding or any
nonjudicial foreclosure proceeding is instituted or any other action is taken by Holder to enforce
the terms of this Note, Maker promises to pay Holder’s reasonable attorneys’ fees (including
reasonably allocated costs of in-house counsel) and other costs (to be determined by the court or
arbitrator and not by jury, in the case of litigation or arbitration) incurred thereby. Such fees
and costs shall be included in any judgment or arbitration award obtained by Holder.

 

 

 

6. Waivers and Acknowledgments. Except as expressly provided in this Note to the
contrary, Maker waives: (a) demand, notice, diligence, protest, presentment for payment, and
notice of extension, dishonor, protest, demand and nonpayment of this Note; and (b) any release or
discharge by reason of any release or substitution of, or other change in, any security given for
the Note, or the obligation of any other person or entity who or which is now or may become
directly or indirectly liable for all or any portion of the Note.

7. Acceleration.

(a) During the existence of any Event of Default, Holder may, at its option, exercise any one
or more of the remedies described herein, including declaring all unpaid indebtedness then
evidenced by this Note, and reasonable attorneys’ fees which are the obligation of Maker under this
Note to be immediately due and payable. Unless Holder otherwise elects, such acceleration shall
occur automatically upon the earlier of the Maturity Date or expiration of the applicable cure
period set forth in the Note or the Loan Agreement for any curable Event of Default. For the
purpose of this Note, an “Event of Default”, includes: (a) any event described in Section 4.1 of
the Loan Agreement; or (b) Maker’s failure to pay money as required by this Note or the Loan
Agreement (whether or not Holder has given any notice of default or any cure period has expired).

(b) All amounts payable under this Note shall become due and payable in full upon consummation
of an agreement between Maker and any party or parties other than Holder for (a) the sale of all or
substantially all of Maker’s assets, or (b) one or more sales of any equity interest in Maker that
in the aggregate equals 50% or more of the total issued and outstanding equity interests in Maker.

8. Warrant Exercise. At any time after an Event of Default has occurred (whether or
not Holder has given any notice of default or any cure period has expired), Holder, in its sole
discretion, shall have the right to apply any unpaid principal due Holder under this Note to pay
the exercise price for the Equity Interests Holder has the right to purchase under the Warrant.

9. Remedies. Except as provided in Sections 4 and 7(b) hereof, Holder’s sole recourse
and remedy under this Note shall be the exercise of the Warrant.

10. Interest Limit. In no event shall the interest rate payable on this Note exceed
the maximum rate of interest permitted to be charged under applicable law.

11. No Waiver by Holder. Failure of Holder to exercise any option hereunder shall not
constitute a waiver of the right to exercise the same in the event of any subsequent default or in
the event of continuance of any existing default after demand for strict performance hereof.
Without limitation of the foregoing sentence, no acceptance of a past due installment shall be
construed to waive Holder’s right to insist upon prompt payment thereafter or to impose late
charges retroactively or prospectively. Holder may apply any payment of less than the total amount
then due that it receives from Maker (regardless of whether Maker has marked such payment to
indicate that its acceptance will constitute payment in full or an accord and satisfaction) on
account to amounts then owing under this Note, but acceptance and application of such amount will
not cure any existing default, constitute a waiver by Holder or an accord and satisfaction of any
kind, or impair Holder’s ability to exercise any or all of its remedies.

12. Time of Essence. Time is of the essence of this Note.

13. Notices. All demands or notices required or permitted under this Note shall be
given in the manner provided in the Loan Agreement.

 

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14. Governing Law and Venue. This Note is executed, delivered and payable in, and
shall be governed by and construed according to the substantive laws and judicial decisions of, the
State of Arizona, regardless of Arizona conflict of laws principles or the place of business,
residence, location or domicile of Maker, any constituent principal thereof or any guarantor of any
portion of the Note, and applicable federal laws, rules and regulations. Maker agrees that the
laws or procedural rules of any jurisdiction except for Arizona purporting to limit or affect
Holder’s ability to enforce its rights as set forth in this Note are not applicable to the
enforcement of Holder’s rights hereunder. Maker intends and understands that Holder will rely upon
the agreements in the foregoing sentences in accepting this Note, and specifically acknowledges
that Holder may institute an action on this Note and/or any guaranty relating thereto. Maker
acknowledges that Holder may permit Maker to execute this Note outside of Arizona, at the request
of, and as an accommodation to Maker if Maker will be unable to be present in Arizona. Any action
brought to enforce this Note may be commenced and maintained, at Holder’s option, in any state or
federal district court in Arizona, or in any other court having personal jurisdiction over Maker.
Maker irrevocably consents to jurisdiction and venue in such court for such purposes and agrees not
to seek transfer or removal of any action commenced in accordance with the terms of this paragraph.
Maker also waives the right to protest the domestication or collection of any judgment obtained
against Maker with respect to this Note in any jurisdiction where Maker may now or hereafter
maintain assets.

15. Mutual Waiver of Right to Jury Trial. AS A MATERIAL PART OF THE CONSIDERATION FOR
THE MAKING OF THIS NOTE, MAKER (AND PAYEE, BY ACCEPTING THIS NOTE) UNCONDITIONALLY WAIVE ALL RIGHTS
TO TRIAL BY JURY OF ANY PRESENT OR FUTURE CLAIMS, DEMANDS OR CAUSES OF ACTION OF ANY KIND ARISING
UNDER OR RELATING TO THE NOTE. MAKER ACKNOWLEDGES THAT THIS IS A WAIVER OF A LEGAL RIGHT AND
REPRESENTS TO PAYEE THAT THIS WAIVER IS MADE KNOWINGLY AND VOLUNTARILY AFTER CONSULTATION WITH
COUNSEL OF MAKER’S CHOICE. MAKER AND PAYEE AGREE THAT ALL SUCH CLAIMS WILL BE TRIED BEFORE A JUDGE
OF A COURT OF COMPETENT JURISDICTION WITHOUT A JURY.

16. Construction of Instrument. This Note shall apply to the parties hereto according
to the context hereof, without regard to the number or gender of words or expressions used herein.
The headings or captions of paragraphs in this Note are for convenience and reference only, and in
no way define or limit the scope or intent of this Note or the provisions of such paragraphs. As
used in this Note, the terms: (a) “include(s)” or “including” shall mean without limitation by
reason of enumeration; and (b) “business days” shall mean those days (other than Saturdays or
Sundays) upon which banks are generally open in Arizona for the conduct of substantially all of
their business activities, and wire transfers of funds can be made.

IN WITNESS WHEREOF, Maker has executed this Note as of the date first written above.

	 	 	 	 	 
	 	BRC Group LLC, a California limited liability
company

 	 
	 	By:  	/s/
Richard Copeland	 
	 	 	Richard Copeland, Manager 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	
/s/ Brad Rothenberg	 
	 	 	Brad Rothenberg, Manager 	 
	 	 	 	 
	 

MAKER

 

-3-Filed by Bowne Pure Compliance

 

Exhibit 10.39

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAW. THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.
ADDITIONALLY, THE TRANSFER OF THESE SECURITIES IS SUBJECT TO THE RESTRICTIONS SET
FORTH HEREIN AND IN THE COMPANY’S OPERATING AGREEMENT (AS THE SAME MAY BE AMENDED
AND RESTATED FROM TIME TO TIME).

EQUITY INTERESTS PURCHASE WARRANT

No. W- 01

Recitals

A. Quepasa Corporation, a Nevada corporation (“QPSA”), has agreed to loan to BRC Group, LLC, a
California limited liability company (the “Company”), the sum of $600,000 on an interest-free basis
(the “Loan”) to be evidenced by a Promissory Note and Loan Agreement dated as of March 27, 2008
(the “Loan Documents”).

B. To induce QPSA to make the Loan to the Company, the Company has agreed to issue to QPSA a
warrant allowing QPSA to purchase up to 50% of the total issued and outstanding Equity Interests in
the Company.

C. As of the date of this Warrant, the Company has issued and outstanding only Class A
Membership Interests.

D. The terms “Membership Interest” and “Class A Membership Interest” shall have the same
meanings as set forth in the Company’s Operating Agreement.

Agreement

1. Definitions. The capitalized terms set forth in this Warrant have the meanings set
forth in Section 8 below.

2. Warrant.

2.1 Grant of Warrant. The Company hereby agrees that, for good and valuable
consideration, the receipt of which is hereby acknowledged, QPSA, the recipient of this Warrant
(“Holder”), or its assigns or transferees, is entitled to purchase from the Company upon the
occurrence of any event listed in Section 2 of this Warrant, that amount of Equity Interests set
forth in Section 2.3(a) of this Warrant, not to exceed fifty percent (50%) of the total issued and
outstanding Equity Interests (subject to all the adjustments provided herein), for a total purchase
price equal to Exercise Price. So long as the Company has issued and outstanding only Class A Membership Interests, the Company shall issue to Holder, upon exercise of this
Warrant, only Class A Membership Interests in the appropriate percentage, as determined under
Section 2.3 below.

 

 

 

2.2 Exercise of Warrant. The Warrant shall become exercisable in full upon the day
immediately following the Due Date of the Loan if the Loan is not paid in full on the Due Date;
provided that this Warrant shall not be exercisable if prior to that date, the Company has accepted
QPSA’s offer to purchase 100% of the Company’s Equity Interests, or QPSA has exercised its right of
first refusal to purchase the Equity Interests.

2.3 Exercise Price of Warrant; Interests Purchased.

(a) The amount of Equity Interest that may be purchased upon the exercise of this Warrant
shall equal the product obtained by multiplying (i) .50 times (ii) a fraction, the numerator of
which is the total unpaid principal balance of the Loan as of the Exercise Date (disregarding any
imputed interest) and the denominator of which is $600,000 times (iii) the total of all issued and
outstanding Equity Interests in the Company. For example, if upon the Exercise Date the unpaid
principal balance of the Loan is $300,000, upon exercise of the Warrant, QPSA would receive that
amount of Equity Interests which would represent 25% of all issued and outstanding Equity Interests
in the Company.

(b) The Exercise Price at any time shall be the unpaid Loan Principal. Upon exercise of this
Warrant, the unpaid Loan Principal shall be deemed to have been paid in full and the Company shall
have no further liability therefore, and QPSA shall have a basis in the Equity Interest equal to
the Exercise Price.

(c) The foregoing to the contrary notwithstanding, if when the Warrant is exercised the
Company is subject to insolvency, bankruptcy, rehabilitation, conservancy or any similar
proceeding, or any of these, Holder’s Exercise Price of this Warrant shall be $10,000 and the
unpaid principal balance of the Loan shall remain outstanding, subject to a credit of $10,000.00
for payment of the Exercise Price.

(d) Upon exercise of this Warrant, Holder shall, with respect to the Equity Interests acquired
by such exercise, automatically become a member of the Company and shall be entitled to all rights
and benefits of membership in the Company, without the further approval or consent of any manager
or member of the Company.

2.4 Method of Exercise. This Warrant may be exercised by delivery of this Warrant
with the Notice of Exercise duly executed by such Holder, to the Company at its principal office
prior to the Expiration Date. The “Exercise Date” shall mean the date the Exercise Notice is
delivered to the Company.

2.5 Issuance of Equity Interest Upon Exercise. Upon exercise of this Warrant by
Holder, the Company shall deliver to QPSA or its assignee, the Equity Interests and any Other
Securities or other property required to be delivered to the Holder within seven business days
after Holder’s exercise of this Warrant. The Company, at its expense, will cause to be issued in
the name of and delivered to the Holder hereof, a certificate or certificates evidencing the Equity
Interests or Other Securities or property to which such Holder is entitled.

2.6 Expiration of Warrant. This Warrant shall terminate on the earlier of (a) the
last day of the 37th calendar day following the date the Warrant first became
exercisable or (b) upon payment in full of the Loan.

 

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3. Continuing Rights of Warrant Holder.

3.1 Reorganization, Consolidation and Other Transactions. Upon any reorganization,
consolidation, merger, share exchange, or sale of assets, or any dissolution of the Company
following any transaction, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the equity interests, limited liability company interests, shares of
stock, debt, partnership interests, profits interest and any other securities and property
receivable by the Company or its members after the consummation of such reorganization,
consolidation, merger, exchange or other transaction, or the effective date of dissolution
following any such transaction, as the case may be, and the terms and conditions of this Warrant
shall be binding upon the issuers of any such other interests or other securities, including, in
the case of such a transaction, 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.

3.2 No Dilution or Impairment. The Company will not, by amendment of its Articles of
Organization, Operating Agreement, or any other documents or agreements, or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of the Warrant, but will at all times in good faith assist in the carrying out of all such
terms and in the taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder of the Warrant against dilution. Without limiting the generality of the
foregoing, the Company: (a) will not, if applicable, increase the par value of any Equity Interests
receivable on the exercise of the Warrant above the amount payable therefor on such exercise; (b)
will not alter or amend its Articles of Organization or its Operating Agreement as in effect as of
the date of this Warrant without the prior written consent of the Holder; (c) will take all such
action as may be necessary or appropriate in order that the Company may validly and legally issue
fully paid and non-assessable Equity Interests on the exercise of the Warrant from time to time
outstanding and will reserve for future issuance a sufficient number of Equity Interests to allow
this Warrant to be exercised as anticipated herein; and (d) will not transfer all or substantially
all of its properties and assets to any other person or entity (corporate or otherwise), or
consolidate with or merge into any other entity or permit any such entity to consolidate with or
merge into the Company (if the Company is not the surviving entity), unless such other entity shall
expressly assume in writing and will be bound by all the terms of this Warrant.

4. Adjustments for Issuance of Equity Interests and Amount of Outstanding Equity
Interests.

4.1 General. If at any time there shall occur any equity split, equity dividend,
reverse equity split or other subdivision of the Company’s Equity Interests (“Equity Event”), then
the percentage of Equity Interests to be received by the Holder of this Warrant, as a percentage of
all Equity Interests issued and outstanding, shall be appropriately adjusted so that Holder shall have the same proportion of Equity Interests issuable hereunder, at any time, on
a fully diluted basis, up to a maximum Equity Interest of fifty percent (50%) of all Equity
Interests issued and outstanding at any time, on a fully diluted basis, that the Holder could have
purchased prior to the occurrence of such Equity Event, assuming that this Warrant was exercisable
in full at the time of the Equity Event occurred. No adjustment to the Exercise Price shall be
made in connection with any adjustment of the number of shares of Equity Interests receivable upon
exercise of this Warrant, except that the Exercise Price shall be proportionately decreased or
increased upon the occurrence of any equity split, equity dividend, reverse equity split or other
subdivision of the Equity Interests so that the aggregate Exercise Price payable if the Warrant was
exercised in full shall be the same both before and after the Equity Event.

 

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As used herein, “Warrant Equity” means the Equity Interests previously issued pursuant to this
Warrant as of the time of determination, and any capital stock or other securities into which or
for which such Equity Interests shall have been converted or exchanged pursuant to any
recapitalization, reorganization or merger of the Company and any shares of capital stock issued
with respect to the foregoing pursuant to any stock split or stock dividend.

4.2 Other Issuance of Equity Interests. Unless the Holder shall otherwise agree, if
at any time there shall be any increase in amount of Equity Interests outstanding or which the
Company is obligated to issue, or covered by any option, warrant or convertible security which is
outstanding, or which the Company is obligated to issue, and the Equity Interests so issued or
which the Company is obligated to issue are issued or issuable at a price which is less than the
then current fair market value of such Equity Interests, as determined jointly by the Company and
the Holder, then the Equity Interests to be received by the Holder shall be adjusted to that amount
determined by multiplying (a) the maximum Equity Interests purchasable hereunder prior thereto,
(including a Warrant Equity held by the Holder prior thereto by (b) a fraction (i) the numerator of
which shall be the amount of Equity Interests outstanding, including any Equity Interests that the
Company is obligated to issue, plus the maximum number of Equity Interests which are issuable
pursuant to options, warrants or convertible securities which are outstanding or which the Company
is obligated to issue, immediately after such increase, and (ii) the denominator of which shall be
the Equity Interests outstanding, including any Equity Interests that the Company is obligated to
issue, plus the maximum number of Equity Interests which are issuable pursuant to options, warrants
or convertible securities which are outstanding or which the Company is obligated to issue,
immediately prior to such increase. Thereupon, the Exercise Price shall be correspondingly reduced
so that the aggregate Exercise Price for all Equity Interests covered hereby shall remain
unchanged. The provisions of this Section 4.2 shall not apply to any issuance of additional Equity
Interests for which an adjustment is provided under Section 4.1 hereof.

4.3 Other Securities. If any Other Securities shall have been issued, or shall then
be subject to issue upon the conversion or exchange of any Equity Interests (or Other Securities)
of the Company (or any other issuer of Other Securities or any other entity referred to in this
Section 4 hereof) or to subscription, purchase or other acquisition pursuant to any rights or
options granted by the Company (or such other issuer or entity), the Holder of this Warrant shall
be entitled to receive upon exercise hereof, in addition to the Equity Interests, such amount of
Other Securities (in lieu of, or in addition to, Equity Interests) as is determined in accordance
with the terms hereof, treating all references to Equity Interests herein as references to Other
Securities to the extent applicable, and the computations, adjustments and readjustments
provided for in this Section 4 with respect to the Equity Interests issuable upon exercise of this
Warrant shall be made as nearly as possible in the manner so provided and applied to determine the
amount of Other Securities from time to time receivable on the exercise of the Warrant, so as to
provide the holder of the Warrant with the benefits intended by this Section 4 and the other
provisions of this Warrant.

 

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4.4 Determination of Adjustments. In determining whether any adjustment or
readjustment is required under this Section 4, and the extent of any such adjustment, the following
provisions shall apply:

(a) In the case of the issuance of securities of the Company for cash, the amount of
consideration received by the Company for such securities shall be deemed to be the amount of cash
paid therefor, before deducting any discounts, commissions or other expenses allowed, paid or
incurred by the Company for any underwriting or otherwise in connection with the issuance and sale
thereof.

(b) In the case of the issuance of securities of the Company for a consideration in whole or
in part other than cash, the consideration other than cash shall be deemed to have a dollar value
equal to the fair market value of such non-cash consideration, irrespective of any accounting
treatment thereof, as determined by the Managers of the Company, with the approval of the Holder.

(c) In the case of the issuance of Options or Convertible Securities, the following provisions
shall apply:

(1) With respect to Options to purchase Equity Interests, the aggregate maximum amount of
Equity Interests deliverable upon exercise of such Options shall be deemed to have been issued at
the time such Options were issued and for a consideration equal to the consideration (determined in
the manner provided in Section 4.4(a) and (b) hereof), if any, received by the Company for such
Options plus the minimum exercise price provided in such Options for Equity Interests covered
thereby.

(2) With respect to Convertible Securities and Options to purchase Convertible Securities, the
aggregate maximum amount of Equity Interests deliverable upon the conversion or exchange of any
such Convertible Securities and the aggregate maximum amount of Equity Interests issuable upon the
exercise of such Options to purchase of such Convertible Securities shall be deemed to have been
issued at the time such convertible Securities or such Options were issued and for a consideration
equal to the consideration, if any, received by the Company for any such Convertible Securities and
Options, plus the minimum additional consideration, if any, to be received by the Company upon the
conversion or exchange of such Convertible Securities or the exercise of such Options and the
conversion or exchange of the Convertible Securities issuable upon exercise of such Options (the
consideration in each case to be determined in the manner provided in Section 4.4(a) and (b)
hereof).

 

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(3) If any change occurs in the amount of Equity Interests deliverable, or in the
consideration payable to the Company, upon exercise of such Options or upon conversion or exchange of such Convertible Securities, including, but not limited to, a
change resulting from the antidilution provisions thereof, the amount of Equity Interests issuable
upon exercise of this Warrant and the Exercise Price hereunder, to the extent in any way affected
by or computed using such Options or Convertible Securities, shall be recomputed to reflect such
change, but no further adjustment shall be made for the actual issuance of Equity Interests or any
payment of such consideration upon the exercise of any such Options or the conversion or exchange
of such Convertible Securities.

(4) Upon the expiration or termination of any such Options or any such rights to convert or
exchange Convertible Securities, the amount of Equity Interests issuable upon exercise of this
Warrant and the Exercise Price hereunder, to the extent in any way affected by or computed using
such Options or Convertible Securities, shall be recomputed to reflect the issuance of only the
amount of Equity Interests (and Options and Convertible Securities which remain in effect) that
were actually issued upon the exercise of such Options or upon the conversion or exchange of such
Convertible Securities.

(5) The amount of Equity Interests deemed issued and the consideration deemed paid therefor
pursuant to Section 4.4(c)(1) and (2) hereof shall be appropriately adjusted to reflect any change,
termination or expiration

5. Notices. In the event of:

(a) any taking by the Company of a record of the holders of any class of Equity Interests for
the purpose of determining the holders thereof who are entitled to receive any dividend or other
distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of
any class or any other securities or property, or to receive any other right; or

(b) any capital reorganization of the Company, any reclassification or recapitalization of the
equity interests of the Company or any transfer of all or substantially all the assets of the
Company to or any consolidation or merger of the Company with or into any other Person; or

(c) any voluntary or involuntary dissolution, liquidation or winding-up of the Company; or

(d) any proposed issue or grant by the Company of any class of any equity interest or any
other securities, or any right or option to subscribe for, purchase or otherwise acquire any shares
of stock of any class or any other securities (other than the issue of Equity Interests on the
exercise of this Warrant),

then, and in each such event, the Company will mail or cause to be mailed to the Holder of this
Warrant a notice specifying (i) the date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and stating the amount and character of such dividend,
distribution or right, (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up is
anticipated to take place, and the time, if any is to be fixed, as of which the holders of record
of Equity Interests (or Other Securities) shall be entitled to exchange their shares of Equity
Interests

 

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(or Other Securities) for securities or other property deliverable on such reorganization,
reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up and (iii) the amount and character of any equity interest or other securities, or rights
or options with respect thereto, proposed to be issued or granted, the date of such proposed issue
or grant and the persons or class of persons to whom such proposed issue or grant is to be offered
or made. Such notice shall be given in accordance with Section 11 at least 30 days prior to the
date specified in such notice on which any such record or other action is to be taken. The Company
agrees that it will not take any of the action specified regarding clauses (a) through (d) above,
without first obtaining the prior written consent of the Holder.

6. Reservation of Stock Issuable on Exercise of Warrant. The Company will at all
times reserve and keep available, solely for issuance and delivery on the exercise of this Warrant,
Equity Interests equal to the total maximum amount of Equity Interests from time to time issuable
upon exercise of this Warrant, and, from time to time, subject to the terms of this Warrant will
take all steps necessary to amend its Articles of Organization and Operating Agreement to provide
sufficient reserves for the issuance of the Equity Interests upon exercise of this Warrant.

7. Certain Holder Rights. If Holder exercises this Warrant any time after the date
the Warrant first becomes exercisable and acquires 50% of the total issued and outstanding Equity
Interests, Holder shall have the right to elect a majority of the Company’s Managers. The Majority
Members of the Company, by executing this Warrant, agree to the foregoing and hereby grant Holder
an irrevocable proxy, which constitutes a power coupled with an interest, to vote all the interests
of the Majority Members for the election of a majority of the Company’s Board of Directors or all
of the Company’s Managing Members, as such persons may be selected by the Holder. Holder, in
exercising the proxy granted hereby, shall owe no duty to the Majority Members in connection with
the selection of the Company’s directors or Managers, and the Majority Members consent to such
action as the Holder may take in order to protect its interests in and investment in the Company.

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

(a) “Convertible Securities” means and includes any indebtedness or Equity Interests, profits
interests, convertible into, or exchangeable for Equity Interests.

(b) “Due Date” means the earlier of January 8, 2011, or the date the Loan Principal becomes
due and payable under the Loan Documents.

(c) “Equity Event” has the meaning set forth in Section 4.1.

(d) “Equity Interests” means any Membership Interests that are issued by the Company, and
outstanding, including without limitation (i) any Class A Membership Interests, (ii) any class or
series of equity interest in the Company issued and outstanding at any time, as evidenced by the
Company’s Articles of Organization, Operating Agreement and other Company documents in effect from
time to time, and (iii) any Convertible Securities or Other Securities into which such Equity
Interests may be converted from time to time, in each case,

 

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together with all rights associated therewith, including, without limitation, voting rights,
rights to distributions, allocations of profit or loss, profits interests, preferences, priorities,
preferred returns, and any other rights associated with any such Equity Interests. To quantify the
amount of Equity Interest with respect to this Warrant or any other purpose, the Equity Interest
shall be expressed as a percentage of all other Equity Interests then issued and outstanding,
regardless of class or series, treating all Equity Interests as a single class.

(e) “Exercise Date” has the meaning specified in Section 2.4.

(f) “Exercise Price” has the meaning specified in Section 2.3(b).

(g) “Expiration Date” is the date specified in Section 2.6.

(h) “Holder” means the holder or holders of this Warrant from time to time.

(i) “Loan” has the meaning set forth in Recital A.

(j) “Loan Documents” has the meaning set forth in Recital A.

(k) “Loan Principal” means the principal balance of the Loan outstanding at any time as
determined under the Loan Documents, without regard to the imputation of any interest.

(l) “Majority Members” means those persons, or their successors in interest, who individually
or collectively own more than 50% of the Company’s Equity Interests, regardless of class.

(m) “Options” means rights (including contractual rights), options or warrants to subscribe
for, purchase or otherwise acquire Equity Interests or Convertible Securities.

(n) “Other Securities” refers to any equity or profits interests (other than Equity
Interests), including any class or series of common or preferred stock or Equity Interests, however
denominated, and other securities of the Company or any other entity (corporate or otherwise) (i)
which the Holder of this Warrant at any time shall be entitled to receive, or shall have received,
on the exercise of this Warrant, in lieu of or in addition to Equity Interests, or (ii) which at
any time shall be issuable or shall have been issued in exchange for or in replacement of Equity
Interests or Other Securities, in each case pursuant to Section 3 or 4 hereof.

9. Company’s Representations and Warranties. The Company hereby makes the following
representations and warranties to the Holder:

(a) The Company is a duly organized, and validly existing limited liability company, and in
good standing under the laws of the State of California and is qualified to transact business in
each jurisdiction where the Company currently transacts business. The Company holds all
authorizations, certificates of authority, permits, and other consents necessary for the Company to conduct its business, as presently conducted. All limited liability
company action necessary to authorize the Company to issue and deliver this Warrant has been taken
and is in full force and effect, and has not been modified, revoked, or rescinded.

 

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(b) This Warrant is duly issued, outstanding and is binding and enforceable against the
Company and its Members in accordance with its terms. The issuance of this Warrant to Holder, and
Holder’s exercise of this Warrant, does not and will not violate the Company’s Articles of
Organization, Operating Agreement, or any other agreement or obligation of the Company or the
Majority Members or by which the Company or its Majority Members are subject or by which the assets
or properties of either is bound.

(c) No consent by any third party or other person is necessary for the Company to issue, enter
into, and to perform its obligations under this Warrant, whose consent has not already been
obtained and is in full force and effect.

(d) The Company is not insolvent and the issuance of this Warrant or its exercise will not
cause the Company to be in breach of or default under any agreement, covenant, or indenture to
which the Company is a party or to which its assets are subject. The issuance of this Warrant and
the Exercise of the Warrant will not contravene the organizational documents of the Company as they
presently exist or may exist in the future.

10. Remedies. The Company agrees that the remedies at law of the Holder of this
Warrant in the event of any breach or default or threatened breach or default by the Company in the
performance of or compliance with any of the terms of this Warrant are not and will not be
adequate, and that, in addition to any claim for damages, such terms may be specifically enforced
by a decree for the specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.

11. Mailing of Notices. All notices and other communications from the Company to the
holder of this Warrant shall be mailed by first class registered or certified mail, postage
prepaid, or sent by overnight courier (or sent in the form of a telecopy) at such address as may
have been furnished to the Company in writing by such holder or, until any such holder furnishes to
the Company an address, then to, and at the address of, the last holder of this Warrant who has so
furnished an address to the Company.

12. Miscellaneous. If any provision of this Warrant is determined to be invalid,
illegal or unenforceable, or partially invalid, illegal or unenforceable, the provision shall be
enforced to the extent, if any, that it may legally be enforced and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
This Warrant and any term hereof may be changed, waived, discharged or terminated only by a
statement in writing signed by the party against which enforcement of such change, waiver,
discharge or termination is sought.

13. No Assignment. Neither QPSA nor the Company may assign their respective rights or
obligations hereunder, whether voluntarily or by operation of law, without the prior written
consent of the other. A change in ownership of fifty percent (50%) or more of the ownership
interests of QPSA shall be considered an assignment for the purposes of this Section.

 

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Any transfer or assignment in contravention of this provision shall be void. Notwithstanding
the foregoing, the Company shall consent to an assignment by QPSA unless such assignment is to a
party that competes with the Company in the business of producing soccer tournaments.

14. Governing Law. This Warrant shall be governed by and construed in accordance with
the domestic substantive laws (and not the conflict of law rules) of the State of Arizona. The
headings in this Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof.

15. Majority Members. The Majority Members have executed this Warrant for the purpose
of consenting to the issuance of this Warrant and for the purpose of consenting to the Holder’s
admission to the Company as a Class A Member upon exercise of this Warrant, and the Majority
Members agree to be bound by all terms and conditions hereof and agree to cause the Company to
carry out each and every obligation it owes to the Holder under this Warrant.

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, the Company and Majority Members have caused this Warrant to be executed
by the Company’s duly authorized officer and the Company’s corporate seal to be impressed hereon
and attested by the Company’s Secretary.

DATED the 10th day of March, 2008.

	 	 	 	 	 
	 	 	“Company”
	 
	 	 	 	 
	 	 	BRC Group, LLC, a California limited liability company
	 
	 	 	 	 
	 

	 	By:	 	/s/ Richard Copeland 
	 

	 	 	 	 
	 

	 	Name:	 	Richard Copeland 
	 

	 	 	 	 
	 

	 	Its:	 	Manager 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	“Majority Members”
	 
	 	 	 	 
	 

	 	By:	 	/s/ Richard Copeland 
	 

	 	 	 	 
	 

	 	 	 	Signature

Richard Copeland
	 
	 	 	 	 
	 

	 	By:	 	/s/ Brad Rothenberg 
	 

	 	 	 	 
	 

	 	 	 	Signature

Brad Rothenberg

(Corporate Seal)

Attest:

	 	 	 	 	 
	 	 	 
	Name:

	 	 	 	 
	 

	 	 	 	 
	Title:

	 	Secretary	 	 

 

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EXERCISE NOTICE

The undersigned hereby irrevocably elects to exercise this Warrant to purchase hereunder

 _____ 
% of the total issued and outstanding Equity Interests of the Company in consideration
for the forgiveness of $
 _____ 
of the Loan Principal and requests that the certificates for such
shares be issued in the name of the undersigned and delivered to the address specified below.

DATED the
 _____ 
day of
 _____ 
, 20
 _____ 

	 	 	 
	 
	 	 
	 

	 	 
	 

	 	(signature of holder)
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	(address of holder)

 

-12-

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