VOID AFTER 5:00 P.M., EASTERN TIME, ON JANUARY 10, 2006
NEITHER THIS WARRANT NOR THE WARRANT STOCK (AS HEREINAFTER DEFINED) HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE
SECURITIES LAWS OF ANY STATE. THIS WARRANT AND THE WARRANT STOCK MAY BE
TRANSFERRED ONLY IN COMPLIANCE WITH THE 1933 ACT AND SUCH LAWS. THIS LEGEND
SHALL BE ENDORSED UPON ANY WARRANT ISSUED IN EXCHANGE FOR THIS WARRANT.
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DCAP GROUP, INC.
(Incorporated under the laws of the State of Delaware)
Warrant
_________ Shares July 10, 2003
FOR VALUE RECEIVED, DCAP GROUP, INC., a Delaware corporation (the
"Company"), hereby certifies that __________________ (the "Holder") is entitled,
subject to the provisions of this Warrant, to purchase from the Company up
to_______________________ (_______) SHARES OF COMMON STOCK, $.01 par value per
share, of the Company ("Common Shares") at a price of ONE DOLLAR AND TWENTY-FIVE
CENTS ($1.25) per share (the "Exercise Price") during the period commencing on
the date hereof and expiring at 5:00 P.M., Eastern time, on January 10, 2006.
The number of Common Shares to be received upon the exercise of this
Warrant may be adjusted from time to time as hereinafter set forth. The Common
Shares deliverable upon such exercise, and as adjusted from time to time, are
hereinafter sometimes referred to as "Warrant Stock."
This Warrant is one of a series of Warrants, identical in form (the
"Warrants"), which in the aggregate, provide for the issuance of up to an
aggregate of 525,000 shares of Common Stock of the Company upon the exercise of
the Warrants.
The Holder agrees with the Company that this Warrant is issued, and all the
rights hereunder shall be held subject to, all of the conditions, limitations
and provisions set forth herein.
1. Exercise of Warrant. This Warrant may be exercised by its presentation
and surrender to the Company at 0000 Xxxxxxxx, Xxxxxxx, Xxx Xxxx 00000 (or such
office or agency of the Company as it may designate in writing to the Holder
hereof), commencing on the date hereof and expiring at 5:00 P.M., Eastern time,
on January 10, 2006, with the Warrant Exercise Form attached hereto duly
executed and accompanied by payment (either in cash or by certified or official
bank check, payable to the order of the Company) of the Exercise Price for the
number of shares specified in such Form. The Company agrees that the Holder
hereof shall be deemed the record
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owner of such Common Shares as of the close of business on the date on which
this Warrant shall have been presented and payment made for such Common Shares
as aforesaid whether or not the Company or its transfer agent is open for
business. Certificates for the Common Shares so purchased shall be delivered to
the Holder hereof within a reasonable time, not exceeding ten (10) business
days, after the rights represented by this Warrant shall have been so exercised.
If this Warrant should be exercised in part only, the Company shall, upon
surrender of this Warrant for cancellation, execute and deliver a new Warrant
evidencing the rights of the Holder hereof to purchase the balance of the shares
purchasable hereunder.
2. Covenants by the Company. The Company covenants and agrees as follows:
2.1 Reservation of Shares. During the period within which the rights
represented by this Warrant may be exercised, the Company shall, at all times,
reserve and keep available out of its authorized capital stock, solely for the
purposes of issuance upon exercise of this Warrant, such number of its Common
Shares as shall be issuable upon the exercise of this Warrant; and if at any
time the number of authorized Common Shares shall not be sufficient to effect
the exercise of this Warrant, the Company will take such corporate action as may
be necessary to increase its authorized but unissued Common Shares to such
number of shares as shall be sufficient for such purpose; the Company shall have
analogous obligations with respect to any other securities or property issuable
upon exercise of this Warrant.
2.2 Valid Issuance, etc. All Common Shares which may be issued upon
exercise of the rights represented by this Warrant included herein will be, upon
payment thereof, validly issued, fully paid, non-assessable and free from all
taxes, liens and charges with respect to the issuance thereof.
2.3 Taxes. All original issue taxes payable in respect of the issuance
of Common Shares upon the exercise of the rights represented by this Warrant
shall be borne by the Company, but in no event shall the Company be responsible
or liable for income taxes or transfer taxes upon the transfer of this Warrant
or the Warrant Stock.
3. Fractional Shares. The Company shall not be required to issue
certificates representing fractions of Common Shares, nor shall it be required
to issue scrip or pay cash in lieu of fractional interests, it being the intent
of the Company and the Holder that all fractional interests shall be eliminated.
4. Exchange or Assignment of Warrant. This Warrant is exchangeable, without
expense, at the option of the Holder, upon presentation and surrender hereof to
the Company for other Warrants of different denominations, entitling the Holder
to purchase in the aggregate the same number of Common Shares purchasable
hereunder. Subject to the provisions of this Warrant and the receipt by the
Company of any required representations and agreements, upon surrender of this
Warrant to the Company with the Warrant Assignment Form annexed hereto duly
executed and funds sufficient to pay any transfer tax, the Company shall,
without additional charge, execute and
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deliver a new Warrant in the name of the assignee named in such instrument of
assignment and this Warrant shall promptly be canceled. In the event of a
partial assignment of this Warrant, the new Warrants issued to the assignee and
the Holder shall make reference to the aggregate number of shares of Warrant
Stock issuable upon exercise of this Warrant.
5. Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any voting or other rights of a stockholder of the Company, either
at law or in equity, and the rights of the Holder are limited to those expressed
in this Warrant.
6. Anti-Dilution Provisions.
6.1 Adjustments for Stock Dividends; Combinations, Etc. (a) In case
the Company shall do any of the following (an "Event"):
(I) declare a dividend or other distribution on its Common Shares
payable in Common Shares of the Company,
(ii) subdivide the outstanding Common Shares pursuant to a stock
split or otherwise,
(iii) combine the outstanding Common Shares into a smaller number
of shares pursuant to a reverse split or otherwise, or
(iv) reclassify its Common Shares,
then the Exercise Price in effect at the time of the record date for such
dividend or other distribution or of the effective date of such subdivision,
combination or reclassification shall be changed to a price determined by
dividing (a) the product of the number of Common Shares outstanding immediately
prior to such Event, multiplied by the Exercise Price in effect immediately
prior to such Event by (b) the number of Common Shares outstanding immediately
after such Event. Each such adjustment of the Exercise Price shall be calculated
to the nearest cent. No such adjustment shall be made in an amount less than
five cents ($.05), but any such amount shall be carried forward and shall be
given effect in connection with the next subsequent adjustment. Such adjustment
shall be made successively whenever any Event listed above shall occur.
(b) Whenever the Exercise Price is adjusted as set forth in Section
6.1 (whether or not the Company then or thereafter elects to issue additional
Warrants in substitution for an adjustment in the number of shares of Warrant
Stock), the number of shares of Warrant Stock specified in each Warrant which
the Holder may purchase shall be adjusted, to the nearest full share, by
multiplying such number of shares of Warrant Stock immediately prior to such
adjustment by a fraction, of which the numerator shall be the Exercise Price
immediately prior to such adjustment and the denominator shall be the Exercise
Price immediately thereafter.
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6.2 Adjustment for Reorganization, Consolidation or Merger. In case of
any reorganization of the Company (or any other entity, the securities of which
are at the time receivable on the exercise of this Warrant) after the date
hereof or in case after such date the Company (or any such other entity) shall
consolidate with or merge with or into another entity, then, and in each such
case, the Holder of this Warrant upon the exercise thereof as provided in
Section l at any time after the consummation of such reorganization,
consolidation or merger, shall be entitled to receive, in lieu of the securities
and property receivable upon the exercise of this Warrant prior to such
consummation, the securities or property to which such Holder would have been
entitled upon such consummation if such Holder had exercised this Warrant
immediately prior thereto, all subject to further adjustment as provided in
Section 6.l; in each such case, the terms of this Warrant shall be applicable to
the securities or property receivable upon the exercise of this Warrant after
such consummation.
7. Restrictions on Exercise.
7.1 Investment Intent. Unless, prior to the exercise of the Warrant,
the issuance of the Warrant Stock has been registered with the Securities and
Exchange Commission pursuant to the 1933 Act, the Warrant Exercise Form shall be
accompanied by the Investment Representation Letter attached hereto, duly
executed by the Holder.
7.2 Listing; Qualification. If, at the time of the exercise of this
Warrant, the Company's Common Shares are listed on a securities exchange or
other self-regulatory body, the Company shall not be obligated to deliver any
shares of Warrant Stock until they have been listed on each such securities
exchange or other self-regulatory body or until there has been qualification
under or compliance with such federal or state laws, rules or regulations as the
Company may deem applicable. The Company shall include the Warrant Stock in any
listing application with any securities exchange or other self-regulatory body
on which it seeks to list its Common Shares and otherwise shall use its best
efforts to obtain such listing, qualification and compliance.
7.3 Limitation on Exercise. Notwithstanding anything to the contrary
contained herein, the number of shares of Common Stock that may be acquired by
the Holder upon any exercise of this Warrant (or otherwise in respect hereof)
shall be limited to the extent necessary to insure that, following such exercise
(or other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its Affiliates (as such term is defined in
Rule 405 promulgated under the 1933 Act) and any other persons or entities whose
beneficial ownership of Common Stock would be aggregated with the Holder's for
purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended,
(the "1934 Act") , does not exceed 9.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the 1934 Act
and the rules and regulations promulgated thereunder. Each delivery of a Warrant
Exercise Form hereunder will constitute a representation by the Holder that it
has evaluated the limitation set forth in this paragraph and determined that
issuance of the full number of shares of Warrant Stock requested in such Warrant
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Exercise Form is permitted under this paragraph. This provision shall not
restrict the number of shares of Common Stock which the Holder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of a merger or other
business combination or reclassification involving the Company as contemplated
under this Warrant. This restriction may not be waived.
8. Restrictions on Transfer; Registration Rights.
8.1 Transfer to Comply with the Securities Act of 1933. Neither this
Warrant nor any Warrant Stock may be sold, assigned, transferred or otherwise
disposed of except as follows: (1) to a person who, in the opinion of counsel
satisfactory to the Company, is a person to whom this Warrant or the Warrant
Stock may legally be transferred without registration and without the delivery
of a current prospectus under the 1933 Act with respect thereto and then only
against receipt of an agreement of such person to comply with the provisions of
this Section 8 with respect to any resale, assignment, transfer or other
disposition of such securities; or (2) to any person upon delivery of a
prospectus then meeting the requirements of the 1933 Act relating to such
securities and the offering thereof for such sale, assignment, transfer or
disposition.
8.2 Legend. Subject to the terms hereof, upon exercise of this Warrant
and the issuance of the Warrant Stock, all certificates representing such
Warrant Stock shall bear on the face or reverse thereof substantially the
following legend:
"The securities which are represented by this certificate have not
been registered under the Securities Act of 1933, and may not be sold,
transferred, hypothecated or otherwise disposed of until a
registration statement with respect thereto is declared effective
under such act, or the Company receives an opinion of counsel for the
Company that an exemption from the registration requirements of such
act is available."
8.3 Registration Rights. Pursuant to a Registration Rights Agreement
of even date among the Company and the Holder, among others, the Holder has been
granted certain registration rights with respect to the resale of the Warrant
Stock.
9. Lost, Stolen or Destroyed Warrants. In the event that the Holder
notifies the Company that this Warrant has been lost, stolen or destroyed and
provides (a) a letter, in form satisfactory to the Company, to the effect that
it will indemnify the Company from any loss incurred by it in connection
therewith, and/or (b) an indemnity bond in such amount as is reasonably required
by the Company, the Company having the option of electing either (a) or (b) or
both, the Company may, in its sole discretion, accept such letter and/or
indemnity bond in lieu of the surrender of this Warrant as required by Section 1
hereof.
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10. Subsequent Holders. Every Holder hereof, by accepting the same, agrees
with any subsequent Holder hereof and with the Company that this Warrant and all
rights hereunder are issued and shall be held subject to all of the terms,
conditions, limitations and provisions set forth in this Warrant, and further
agrees that the Company and its transfer agent, if any, may deem and treat the
registered holder of this Warrant as the absolute owner hereof for all purposes
and shall not be affected by any notice to the contrary.
11. Notices. All notices required hereunder shall be given by first-class
mail, postage prepaid, or overnight mail or courier and, if given by the Holder
addressed to the Company at 0000 Xxxxxxxx, Xxxxxxx, Xxx Xxxx 00000, Xxxxxxxxx:
Chief Executive Officer, or such other address as the Company may designate in
writing to the Holder; and if given by the Company, addressed to the Holder at
the address of the Holder shown on the books of the Company.
12. Applicable Law. This Warrant is issued under, and shall for all
purposes be governed by and construed in accordance with, the laws of the State
of New York, excluding choice of law principles thereof.
Remainder of page intentionally left blank. Signature page follows.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on its
behalf, in its corporate name, by its duly authorized officer, all as of the day
and year first above written.
DCAP GROUP, INC.
By:
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Xxxxx Xxxxxxxxx
Chief Executive Officer
DCAP GROUP, INC.
WARRANT EXERCISE FORM
The undersigned hereby irrevocably elects to exercise the within Warrant
dated July 10, 2003 to the extent of purchasing shares of Common Stock of DCAP
GROUP, INC. The undersigned hereby makes a payment of $ in payment therefor.
HOLDERS:
TO BE COMPLETED BY INDIVIDUAL TO BE COMPLETED BY CORPORATE,
HOLDER PARTNERSHIP, LIMITED LIABILITY
COMPANY OR TRUST HOLDER
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Name(s) of Holder(s) [Please Print] Name of Holder [Please Print]
___________________________________ By:__________________________________
Signature of Holder Authorized Signatory
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Signature of Holder, if jointly held Name and Title of Authorized Signatory
[Please Print]
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Address(es) of Holder(s) Address of Holder
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Social Security Number(s) of Holder(s) Tax Identification Number of Holder
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Date Date
DCAP GROUP, INC.
FORM OF INVESTMENT REPRESENTATION LETTER
DCAP Group, Inc.
0000 Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Gentlemen:
In connection with the acquisition of _______________ shares of Common
Stock (the "Shares") of DCAP GROUP, INC., a Delaware corporation (the
"Company"), by the undersigned from the Company pursuant to the exercise of a
Warrant dated July 10, 2003, the undersigned does hereby represent and warrant
to the Company as follows:
(a) The undersigned represents and warrants that th Shares acquired by it
are being acquired for its own account, for investment purposes and
not with a view to any distribution within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). The
undersigned will not sell, assign, mortgage, pledge, hypothecate,
transfer or otherwise dispose of any of the Shares unless (i) a
registration statement under the Securities Act with respect thereto
is in effect and the prospectus included therein meets the
requirements of Section 10 of the Securities Act, or (ii) the Company
has received a written opinion of its counsel that, after an
investigation of the relevant facts, such counsel is of the opinion
that such proposed sale, assignment, mortgage, pledge, hypothecation,
transfer or disposition does not require registration under the
Securities Act or any state securities law.
(b) The undersigned understands that, except as set forth in a certain
Registration Statement between the Company and the undersigned, among
others, the resale of the Shares is not, and is not being, registered
under the Securities Act and the Shares must be held indefinitely
unless they are subsequently registered thereunder or an exemption
from such registration is available.
(c) The undersigned represents and warrants further that (i) it is an
"accredited investor," as such term is defined in Rule 501(a)
promulgated under the Securities Act, and, either alone or with its
purchaser representative, has such knowledge and experience in
financial and business matters that it is capable of evaluating the
merits and risks of the acquisition of the Shares; (ii) it is able to
bear the economic risks of an investment in the Shares, including,
without limitation, the risk of the loss of part or all of its
investment and the inability to sell or transfer the Shares for an
indefinite period of time; (iii) it has adequate financial means of
providing for current needs and contingencies and has no need for
liquidity in its investment in the Shares; and (iv) it does not have
an overall commitment to investments which are not readily marketable
that is excessive in proportion to net worth and an investment in the
Shares will not cause such overall commitment to become excessive.
(d) The undersigned has reviewed the Company's Annual Report on Form
10-KSB for its latest fiscal year (the "10-KSB") and all other reports
filed by the Company with the Securities and Exchange Commission since
the filing of the 10-KSB and has been afforded the opportunity to
obtain such information regarding the Company as it has reasonably
requested to evaluate the merits and risks of the undersigned's
investment in the Shares. No oral or written representations have been
made or oral information furnished to the undersigned or its advisers
in connection with the investment in the Shares.
(e) The undersigned acknowledges that counsel to th Company will be
relying, and may rely, upon the foregoing in connection with any
opinion of counsel it may give with regard to the issuance of the
Shares by the Company to the undersigned, and any subsequent transfer
of the Shares by the undersigned, and agrees to advise the Company and
its counsel in writing in the event of any change in any of the
foregoing.
Very truly yours,
HOLDERS:
TO BE COMPLETED BY INDIVIDUAL TO BE COMPLETED BY CORPORATE,
HOLDER PARTNERSHIP, LIMITED LIABILITY
COMPANY OR TRUST HOLDER
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Name(s) of Holder(s) [Please Print] Name of Holder [Please Print]
___________________________________ By:__________________________________
Signature of Holder Authorized Signatory
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Signature of Holder, if jointly held Name and Title of Authorized Signatory
[Please Print]
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Date Date
DCAP GROUP, INC.
WARRANT ASSIGNMENT FORM
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto ______________________________ (please type or print name of
assignee) with an address at
______________________________________________________________________ the right
to purchase shares of Common Stock of DCAP GROUP, INC. (the "Company")
represented by this Warrant dated July 10, 2003 to the extent of ____________
shares and does hereby irrevocably constitute and appoint ____________________
attorney to transfer the same on the books of the Company with full power of
substitution in the premises.
HOLDERS:
TO BE COMPLETED BY INDIVIDUAL TO BE COMPLETED BY CORPORATE,
HOLDER PARTNERSHIP, LIMITED LIABILITY
COMPANY OR TRUST HOLDER
----------------------------------- ------------------------------------
Name(s) of Holder(s) [Please Print] Name of Holder [Please Print]
___________________________________ By:__________________________________
Signature of Holder Authorized Signatory
----------------------------------- -------------------------------------
Signature of Holder, if jointly held Name and Title of Authorized Signatory
[Please Print]
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Date Date
