THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
EXEMPTION FROM REGISTRATION UNDER THE FOREGOING LAWS. ACCORDINGLY, THIS WARRANT
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT (i) AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER OF THIS WARRANT THAT SUCH SALE, TRANSFER OR
OTHER DISPOSITION MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES
ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR (ii) SUCH REGISTRATION.
DME INTERACTIVE HOLDINGS, INC.
WARRANT
TO PURCHASE
SHARES OF COMMON STOCK
For value received, Xxxxxxx Partners, Inc. ("Holder"), is entitled to purchase
from DME INTERACTIVE HOLDINGS, INC., a Delaware corporation (the "Company"), up
to 500,000 fully paid and nonassessable shares of the Company's Common Stock,
$.001 par value per share ("Common Stock") or such greater or lesser number of
such shares as may be determined by application of the anti-dilution provisions
of this warrant, at the price of $2.00 per share, subject to adjustments as
noted below (the "warrant exercise price").
This warrant may be exercised by Holder at any time or from time to time prior
to the close of business on January 3, 2002.
This warrant is subject to the following terms and conditions:
1. Exercise. The rights represented by this warrant may be exercised by the
Holder, in whole or in part, by written election, in the form set forth below,
by the surrender of this warrant (properly endorsed if required) at the
principal office of the Company, by payment to it by cash, certified check or
bank draft of the warrant exercise price for the shares to be purchased and by
delivery of a subscription agreement, an investment letter and/or similar
documents acceptable to the Company demonstrating that the sale of the shares to
be purchased is exempt from registration under the Securities Act of 1933, as
amended, and any state securities law. The shares
1
so purchased shall be deemed to be issued as of the close of business on the
date on which this warrant has been exercised by payment to the Company of the
warrant exercise price. Certificates for the shares of stock so purchased,
bearing an appropriate restrictive legend, shall be delivered to the Holder
within 7 days after the rights represented by this warrant shall have been so
exercised, and, unless this warrant has expired, a new warrant representing the
number of shares, if any, with respect to which this warrant has not been
exercised shall also be delivered to the Holder hereof within such time. No
fractional shares shall be issued upon the exercise of this warrant.
In addition, as an alternative to payment of the exercise price in
accordance with the preceding paragraph, the Holder may elect to effect a
cashless exercise by so indicating on the exercise notice and including a
calculation of the number of shares of Common Stock to be issued upon such
exercise in accordance with the terms hereof (a "Cashless Exercise"). In the
event of a Cashless Exercise, the Holder shall surrender this Warrant for that
number of shares of Common Stock determined by multiplying the number of shares
of Common Stock for which this warrant is being exercise by the differnce
between the "Closing Price", as herein defined minus the exercise price in
effect at such time, divided by the Closing Price. The "Closing Price" for each
day shall be the last reported sale price regular way or, in case no sale takes
place on such day, the average of the closing bid and asked prices regular way
on such day, in either case as reported on the New York Stock Exchange Composite
Tape, or, if the Common Stock is not listed or admitted to trading on such
Exchange, on the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or, if the Common Stock is not listed or
admitted to trading on any national securities exchange, on the NASDAQ National
Market System, or, if the Common Stock is not admitted for quotation on the
NASDAQ National Market System, the average of the high bid and low asked prices
on such day as recorded by the National Association of Securities Dealers, Inc.
through NASDAQ, or, if the National Association of Securities Dealers, Inc.
through NASDAQ shall not have reported any bid and asked prices for the Common
Stock on such day, the average of the bid and asked prices for such day as
furnished by any New York Stock Exchange member firm selected from time to time
by the Company for such purpose, or, if no such bid and asked prices can be
obtained from any such firm, the fair market value of one share of the Common
Stock on such
2
day as determined in good faith by the Board of Directors of the Company.
2. Shares. All shares that may be issued upon the exercise of the rights
represented by this warrant shall, upon issuance, be duly authorized and issued,
fully paid and nonassessable shares. During the period within which the rights
represented by this warrant may be exercised, the Company shall at all times
have authorized and reserved for the purpose of issue or transfer upon exercise
of the subscription rights evidenced by this warrant a sufficient number of
shares of its Common Stock to provide for the exercise of the rights represented
by this warrant.
3. Adjustment. The warrant exercise price shall be subject to adjustment from
time to time as hereinafter provided in this Section 3:
(a) If the Company at any time divides the outstanding shares of the
Common Stock into a greater number of shares (whether pursuant to a stock
split, stock dividend or otherwise), and conversely, if the outstanding
shares of the Common Stock are combined into a smaller number of shares,
the warrant exercise price in effect immediately prior to such division or
combination shall be proportionately adjusted to reflect the reduction or
increase in the value of each such common share.
(b) If any capital reorganization or reclassification of the capital
stock of the Company, or consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets
to another corporation shall be effected in such a way that holders of the
Common Stock shall be entitled to receive stock, securities or assets with
respect to or in exchange for such Common Stock, then, as a condition of
such reorganization, reclassification, consolidation, merger or sale, the
Holder shall have the right to purchase and receive upon the basis and
upon the terms and conditions specified in this warrant and in lieu of the
shares of the Common Stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby, such shares
of stock, other securities or assets as would have been issued or
delivered to the Holder if Holder had exercised this warrant and had
received such shares of common stock immediately prior to such
reorganization, reclassification, consolidation, merger or sale. The
3
Company shall not effect any such consolidation, merger or sale unless
prior to the consummation thereof the successor corporation (if other than
the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument
executed and mailed to the Holder at the last address of the Holder
appearing on the books of the Company the obligation to deliver to the
Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, the Holder may be entitled to purchase.
(c) If the Company takes any other action, or if any other event
occurs, which does not come within the scope of the provisions of Section
3(a) or 3(b), but which should result in an adjustment in the warrant
exercise price and/or the number of shares subject to this warrant in
order to fairly protect the purchase rights of the Holder, an appropriate
adjustment in such purchase rights shall be made by the Company.
(d) Upon each adjustment of the warrant exercise price, the Holder
shall thereafter be entitled to purchase, at the warrant exercise price
resulting from such adjustment, the number of shares obtained by
multiplying the warrant exercise price in effect immediately prior to such
adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment and dividing the product thereof by the warrant
exercise price resulting from such adjustment.
(e) Upon any adjustment of the warrant exercise price, the Company
shall give written notice thereof to the Holder stating the warrant
exercise price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon
the exercise of this warrant, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based.
4. Reservation of Common Stock Issuable on Exercise of Warrants. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of this warrant, all shares of Common Stock from time to time
issuable on the exercise of this warrant.
5. Impairment. The Company will not, by any voluntary action, avoid or seek
to avoid the observance or performance of any of
4
the terms of this 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 against
dilution or other impairment.
6. No Rights as Shareholder. This warrant shall not entitle the Holder to any
voting rights or other rights as a shareholder of the Company.
7. Transfer of Warrant
7.1. Transferability of Warrant. This warrant and all rights hereunder
are transferable, in whole or in part, subject to the provisions of the
Stockholders Agreement, and in any event subject to compliance with state and
federal securities laws, at the principal office of the Company by the holder
hereof in person or by duly authorized attorney, upon surrender of this warrant
properly endorsed. The bearer of this warrant, when endorsed, may be treated by
the Company and all other persons dealing with this warrant as the absolute
owner hereof for any purpose and as the person entitled to exercise the rights
represented by this warrant, or to the transfer hereof on the books of the
Company, any notice to the contrary notwithstanding; but until such transfer on
such books, and unless such purported transfer was in compliance with the terms
and conditions of the Rights Agreement, the Company may treat the registered
owner hereof as the owner for all purposes.
7.2 Warrant Register. The Company will maintain a register (the "Warrant
Register") containing the names and addresses of the Holder or Holders. The
Holder may change his address as shown on the Warrant Register by written notice
to the Company requesting such change. Any notice or written communication
required or permitted to be given to the Holder may be delivered or given by
mail to such Holder as shown on the Warrant Register and at the address shown on
the Warrant Register. Until this warrant is transferred on the Warrant Register
of the Company, the Company may treat the Holder as shown on the Warrant
Register as the absolute owner of this warrant for all purposes, notwithstanding
any notice to the contrary.
7.3 Warrant Agent. The Company may, by written notice to the Holder,
appoint an agent for the purpose of maintaining the Warrant Register referred to
in Section 8.2 above, issuing the Common Stock or other securities then issuable
upon the exercise
5
of this warrant, exchanging this warrant, replacing this warrant, or any or all
of the foregoing. Thereafter, any such registration, issuance, exchange, or
replacement, as the case may be, shall be made at the office of such agent.
7.4 Exchange of Warrant Upon a Transfer. On surrender of this warrant for
exchange, properly endorsed on the Assignment Form and subject to the provisions
of this warrant with respect to compliance with the Act and with the limitations
on assignments and transfers contained in this Section 8, the Company, at its
expense shall issue to or on the order of the Holder or as the Holder may
direct, for the number of shares issuable upon exercise hereof.
7.5 Compliance with Securities Laws.
(a) Holder, by acceptance hereof, acknowledges that this warrant and
the shares of Common Stock to be issued upon exercise hereof are being acquired
solely for the Holder's own account and not as a nominee for any other party,
and for investment, and that the Holder will not offer, sell or otherwise
dispose of this warrant or any shares of Common Stock to be issued upon exercise
hereof except under circumstances that will not result in a violation of the Act
or any state securities laws. Upon exercise of this warrant, the Holder shall,
if requested by the Company, confirm in writing, in a form satisfactory to the
Company, that the shares of Common Stock so purchased are being acquired solely
for the Holder's own account and not as a nominee for any other party, for
investment, and not with a view toward distribution or resale.
(b) This warrant and all shares of Common Stock issued upon exercise
hereof shall be stamped or imprinted with a legend in substantially the
following form (in addition to any legend required by state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR DISPOSED OF WITHOUT COMPLIANCE WITH THE
REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
THEREFROM.
6
7.6 Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
warrant and, in the case of any such loss, theft or destruction of any 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 such warrant, the Company at its expense will
execute and deliver, in lieu thereof, a new warrant of like tenor,
8. Amendments. Any term of this warrant may be amended with the mutual
written consent of the Company and the Holder. Any amendment effected in
accordance with this Section 9 shall be binding upon the Company, the Holder and
any future transferee of the Warrant.
9. Notices. All demands and notices to be given hereunder shall be
delivered or sent by first class mail, postage prepaid; in the case of the
Company, addressed to its corporate headquarters, 00 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, until a new address shall have been substituted by like notice; and
in the case of Holder, addressed to Holder at the address written below, until a
new address shall have been substituted by like notice.
10. Governing Law. This warrant shall be construed and enforced in
accordance with and governed by the laws of the State of New York.
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IN WITNESS WHEREOF, the Company has caused this warrant to be executed and
delivered by a duly authorized officer.
Dated: As of January 5, 2000
DME Interactive Holdings, Inc
By: /S/ Darien Dash
-------------------------------
Darien Dash, President
8
WARRANT EXERCISE
(To be signed only upon exercise of this warrant)
The undersigned, the Holder of the foregoing warrant, hereby irrevocably
elects to exercise the purchase right represented by such warrant for, and to
purchase thereunder, __________ shares of Common Stock of DME Interactive
Holdings, Inc., to which such warrant relates and herewith makes payment of
$__________ therefor in cash, certified check or bank draft and requests that
the certificates for such shares be issued in the name of, and be delivered to
____________________, whose address is set forth below the signature of the
undersigned.
Dated: ___________
-----------------------
Signature
If shares are to be issued other than to Holder:
Social Security or other Tax Identification No.
Please print present name and address
9
WARRANT ASSIGNMENT
(To be signed only upon transfer of this warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _______________ the right represented by the foregoing warrant to purchase
the shares of Common Stock of DME Interactive Holdings, Inc. and appoints
____________________ attorney to transfer such right on the books of DME
Interactive Holdings, Inc., with full power of substitution in the premises.
Dated: ______
---------------------------------
Signature
Social Security or other Tax
Identification No.
---------------------------------
Please print present name and complete address
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