WARRANT
THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF ARE SUBJECT TO A SECURITIES PURCHASE AGREEMENT DATED AS OF
NOVEMBER 25, 1999, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY AND WILL BE FURNISHED TO THE HOLDER ON REQUEST TO THE SECRETARY OF THE
COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY
STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT IN COMPLIANCE
WITH THE SECURITIES ACT OF 1933, AS AMENDED, THE RULES AND REGULATIONS
PROMULGATED THEREUNDER AND ALL APPLICABLE STATE SECURITIES LAWS.
No. 2-UH Dated: November 25, 1999
Warrant
GENESISINTERMEDIA.COM, INC.
This Warrant certifies that Ultimate Holdings, Ltd., a Bermuda Ltd., is the
registered holder of a warrant (the "Warrant") to purchase 700,000 shares of
common stock, par value $.001 per share (the "Common Stock"), of
GenesisIntermedia.com, Inc., a Delaware corporation (the "Company"), at an
exercise price per share of Common Stock issuable upon the exercise of this
Warrant equal to $7.00 per share (the "Exercise Price").
SECTION 1. Exercise; Termination; Redemption.
To exercise this Warrant, the Warrant holder must elect and sign the
exercise election attached to this Warrant certificate and deliver to the
Company (a) this Warrant certificate and (b) cash or a check payable to the
Company for the Exercise Price for the Warrant. The Warrant shall be exercisable
at any time (i) after 61 days following the date the Holder gives to the Company
notice that the Holder intends the Warrant to become exercisable (an "Intent
Notice") and (ii) before November 25, 2004 (the "Termination Date"), provided,
however, that if the Holder has not given the Company an Intent Notice prior to
that date, the Warrant shall become exercisable on the 60th calendar day prior
to the Termination Date.
Notwithstanding the payment provisions set forth in the paragraph above,
the Warrant holder may elect to receive Warrant Shares equal to the value of
this Warrant (or any portion thereof vested but unexercised), through a cashless
exercise, by surrender of this Warrant at the principal office of the Company
together with notice of such election, in which event the Company shall issue to
the Warrant holder that number of Warrant Shares computed using the following
formula:
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X = Y(A-B)
A
Where: X= the number of Warrant Shares to be issued to Warrant holder;
Y= the number of Warrant Shares purchasable under this Warrant
at the time of such calculation;
A= the Fair Market Value of one share of Common Stock; and
B= the Exercise Price at the date of such calculation.
For purposes of this paragraph, the Fair Market Value of one share of
Common Stock shall mean (i) if the Company's Common Stock is listed on any
established stock exchange or national market system, including, without
limitation, the national market quotation system of NASDAQ, the closing price of
one share of the Company's Common Stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system (or the exchange with the
greatest volume of trading in the Company's Common Stock) on the last market
trading day prior to the day of determination, as reported in the Wall Street
Journal or such other source as the Board of Directors of the Company may deem
reliable; (ii) if the Company's Common Stock is quoted on NASDAQ, but not the
national market thereof, or regularly quoted by a recognized securities dealer
but selling prices are not quoted, the mean between the high and low asked
prices for the Company's Common Stock on the last market trading day prior to
the day of determination, as reported in the Wall Street Journal, or (iii) as
otherwise reasonably determined by the Board of Directors of the Company, acting
in good faith.
This Warrant shall not be exercised by any holder hereof after 5:00 p.m.,
Los Angeles time on the Termination Date. To the extent that this Warrant has
not been exercised by the Termination Date at 5:00 p.m., Los Angeles time, this
Warrant shall become void and all rights hereunder and all rights in respect
hereof shall cease as of such time.
This Warrant shall be exercisable at the election of any holder thereof,
either in full or from time to time in part (but in no event for less than one
whole Warrant Share) and, in the event that a certificate evidencing this
Warrant is exercised in respect of fewer than all of the Warrant Shares issuable
on such exercise at any time prior to the Termination Date, a new Warrant
certificate evidencing the remaining Warrant with respect to whole Warrant
Shares issuable upon exercise will be issued. No adjustment shall be made for
any dividends on any Warrant Shares issuable upon exercise of this Warrant.
The Company covenants that all Warrant Shares which may be issued upon
exercise of this Warrant will, upon issue, be fully paid, nonassessable, free of
preemptive rights and free from all taxes, liens, charges and security interests
with respect to the issue thereof.
The Company will pay all documentary stamp taxes attributable to the
issuance of Warrant Shares upon the exercise of this Warrant; provided, however,
that the Company shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involved in the issue of any Warrant
certificates or any certificates for Warrant Shares in a name other than that of
the registered holder of this Warrant certificate surrendered upon the exercise
of this Warrant, and the Company shall not be required to issue or deliver such
Warrant certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
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The Company shall not be required to issue fractional Warrant Shares on the
exercise of this Warrant. If any fraction of a Warrant Share would be issuable
on the exercise of this Warrant (or specified portion hereof), the Company shall
pay an amount in cash equal to the Exercise Price on the day immediately
preceding the date this Warrant certificate is presented for exercise,
multiplied by such fraction.
SECTION 2. Transfer or Exchange.
This Warrant and any Warrant Shares may only be transferred by the holder
in accordance with the registration requirements of the Securities Act of 1933,
as amended (the "Securities Act") or an exemption therefrom.
Subject to compliance with the preceding paragraph, the Company shall from
time to time register the transfer of this Warrant certificate upon the records
to be maintained by it for that purpose, upon surrender hereof accompanied (if
so required by it) by a written instrument or instruments of transfer in form
satisfactory to the Company, duly executed by the registered holder hereof or by
the duly appointed legal representative thereof or by a duly authorized attorney
and an opinion of counsel in form and substance satisfactory to the Company that
such transfer may be effected under the Securities Act. Upon any such
registration of transfer, a new Warrant certificate(s) shall be issued to the
transferee(s) and the surrendered Warrant certificate shall be canceled by the
Company.
This Warrant certificate may be exchanged at the option of the holder
hereof, when surrendered to the Company at its office for another Warrant
certificate or other Warrant certificates of like tenor and representing a
Warrant with respect to a like aggregate number of Warrant Shares. A Warrant
certificate surrendered for exchange shall be canceled by the Company.
Subject to the payment of any taxes as provided herein, upon an exercise of
this Warrant, the Company shall issue and cause to be delivered to or upon the
written order of the holder and in such name or names as the Warrant holder may
designate, a certificate or certificates for the number of full Warrant Shares
issuable upon the exercise of this Warrant. This Warrant shall be deemed to have
been exercised and any person so designated to be named therein shall be deemed
to have become a holder of record of such Warrant Shares as of the date of the
surrender of this Warrant certificate (and payment of the Exercise Price or
cashless exercise election).
The Company may deem and treat the registered holder hereof as the absolute
owner of this Warrant (notwithstanding any notation of ownership or other
writing hereon made by anyone), for the purpose of any exercise hereof, of any
distribution to the holder hereof, and for all other purposes, and the Company
shall not be affected by any notice to the contrary. Nothing contained in this
Warrant certificate shall be construed prior to the date of surrender of the
Warrant certificate for exercise in accordance with the terms hereof as
conferring upon the holder hereof the right to vote or to consent or to receive
notice as stockholders in respect of the meetings of stockholders or the
election of directors of the Company or any other matter, or any rights
whatsoever as stockholders of the Company.
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SECTION 3. Mutilated, Lost, Stolen or Destroyed Warrant Certificate.
In case this Warrant certificate shall be mutilated, lost, stolen or
destroyed, the Company may in its discretion issue in exchange and substitution
for and upon cancellation of the mutilated Warrant certificate, or in lieu of
and substitution for the Warrant certificate lost, stolen or destroyed, a new
Warrant certificate of like tenor and representing an equivalent Warrant, but
only upon receipt of evidence satisfactory to the Company of such loss, theft or
destruction of such Warrant certificate and indemnity, if requested, also
satisfactory to the Company.
SECTION 4. Reservation of Shares for Issuance.
The Company will at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued common
stock, for the purpose of enabling it to satisfy any obligation to issue Warrant
Shares upon exercise of this Warrant, the maximum number of Warrant Shares which
may then be issuable upon the exercise of this Warrant. The Company or, if
appointed, the transfer agent for the common stock and every subsequent transfer
agent for any of the Company's capital securities issuable upon the exercise of
any of the rights of purchase aforesaid will be irrevocably authorized and
directed at all times to reserve such number of authorized shares of common
stock as shall be required for such purpose. The Company will keep a copy of
this Warrant certificate on file with any such transfer agent for any of the
Company's capital securities issuable upon the exercise of the rights of
purchase represented by this Warrant certificate.
SECTION 5. Effect of Subdivision, Reclassification, Merger, Etc.
If the outstanding common stock shall be subdivided into a greater number
of shares of common stock, the Exercise Price in effect at the opening of
business on the day following the day upon which such subdivision becomes
effective shall be proportionately reduced, and, conversely, if the outstanding
common stock shall be combined into a smaller number of shares of common stock,
the Exercise Price in effect at the opening of business on the day following the
day upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.
If any of the following events occur: (i) any reclassification or change of
the outstanding shares of common stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), (ii) any consolidation, merger or
combination of the Company with another corporation or company as a result of
which holders of common stock shall be entitled to receive stock, securities or
other property or assets (including cash) with respect to or in exchange for
such common stock, or (iii) any sale or conveyance of the properties and assets
of the Company as, or substantially as, an entirety to any other corporation or
company as a result of which holders of common stock shall be entitled to
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receive stock, securities or other property or assets (including cash) with
respect to or in exchange for such common stock, then the Company or the
successor or purchasing corporation or company, as the case may be, shall
providing that this Warrant shall be convertible into the kind and amount of
shares of stock and other securities or property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of Warrant Shares
issuable upon exercise of this Warrant (assuming, for such purposes, a
sufficient number of authorized shares of common stock available to issue upon
exercise of the entirety of this Warrant) immediately prior to such
reclassification, change, consolidation, merger, combination, sale or conveyance
assuming such holder of common stock did not exercise his or her rights of
election, if any, as to the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, statutory exchange, sale or
conveyance (provided that, if the kind or amount of securities, cash or other
property receivable upon such consolidation, merger, statutory exchange, sale or
conveyance is not the same for each share of common stock in respect of which
such rights of election have not been exercised ("non-electing share"), then,
for the purposes of paragraph, the kind and amount of securities, cash or other
property receivable upon such consolidation, merger, statutory exchange, sale or
conveyance for each non-electing share shall be deemed to be the kind and amount
so receivable per share of common stock by a plurality of the non-electing
shares). In any such case, the revenue calculation necessary for exercise of
this Warrant shall be calculated on the basis of the business entity or assets
so consolidated, merged, exchanged, sold or conveyed, whether in whole or
incorporated into another business entity, and it shall be the responsibility of
such successor or acquiror entity to perform such calculation, which calculation
shall be conclusive and binding on the holder of this Warrant. If, in the case
of any such reclassification, change, consolidation, merger, combination, sale
or conveyance, the stock or other securities and assets receivable thereupon by
a holder of common stock includes shares of stock or other securities and assets
of a corporation other than the successor or purchasing corporation or company,
as the case may be, in such reclassification, change, consolidation, merger,
combination, sale or conveyance, then an acknowledgment of the obligations under
this paragraph shall be executed by such other corporation or company. The above
provisions of this paragraph shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.
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Upon any adjustment of the Exercise Price pursuant hereto, the Company
shall promptly thereafter cause to be given to the registered holder of this
Warrant certificate at its address appearing on the Warrant register maintained
by the Company written notice of such adjustments by first-class mail, postage
prepaid. Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.
SECTION 6. Miscellaneous.
This Warrant certificate and Warrant shall be deemed to be a contract made
under the law of the State of California and for all purposes shall be construed
in accordance with the internal law of said State.
Nothing in this Warrant certificate shall be construed to give to any
person or company other than the Company and the registered holder of this
Warrant certificate any legal or equitable right, remedy or claim under this
Warrant certificate; but this Warrant certificate shall be for the sole and
exclusive benefit of the Company and the registered holder of this Warrant.
IN WITNESS WHEREOF, GenesisIntermedia.com, Inc., a Delaware corporation,
has caused this Warrant certificate to be signed by its duly authorized officer.
Dated:
GENESISINTERMEDIA.COM, INC., a
Delaware corporation
By: ______________________________
Ramy El-Batrawi, President
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Election for Exercise
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant certificate, to receive ______ Shares of common
stock par value $.001 per share and herewith tenders payment for such Shares in
the amount of $___________ in accordance with the terms of this Warrant
certificate. The undersigned requests that a certificate for such shares be
registered in the name of ___________________, whose address is
___________________________________ and that such shares be delivered to
___________________ whose address is _______________________________________. If
said number of shares is less than all of the shares of common stock purchasable
hereunder, the undersigned requests that a new Warrant certificate representing
the remaining balance of such whole Shares be registered in the name of
_____________________, whose address is _________________________________ and
that such Warrant certificate be delivered to______________ whose address is
________________________________________________.
Signature: ______________________________
Date:
Signature Guaranty:
