THE SECURITIES REPRESENTED HEREBY 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 TRANSFERRED
WITHOUT SUCH REGISTRATION OR EXEMPTION THEREFROM.
STOCK PURCHASE WARRANT
[Form of Contingent Warrants]
This Warrant is issued this __________ day of __________, _____, by
DIPLOMAT DIRECT MARKETING CORPORATION, a Delaware corporation (the "Company"),
to SIRROM CAPITAL CORPORATION d/b/a TANDEM CAPITAL, a Tennessee corporation
(SIRROM CAPITAL CORPORATION and any subsequent assignee or transferee hereof
are hereinafter referred to collectively as "Holder" or "Holders"). Capitalized
terms not defined herein shall have the meanings assigned by the Debenture
Purchase Agreement referred to in Section 1.
Agreement:
1. Issuance of Warrant; Term. For and in consideration of Sirrom
Capital Corporation d/b/a Tandem Capital purchasing from the Company and other
Borrowers a Subordinated Debenture in the original principal amount of Five
Million Dollars ($5,000,000.00) (the "Debenture") pursuant to the terms of a
Debenture Purchase Agreement dated June _______, 1998 (the "Debenture Purchase
Agreement"), and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company hereby grants to
Holder the right to purchase at any time and from time to time, in whole or in
part, on or after [Closing Date Anniversary], [year], up to the number of
Shares of the Company's Common Stock, $.0001 par value (the "Common Stock"),
equal to (A) 200,000, multiplied by (B) the quotient of (x) the principal
amount of Debentures outstanding as of such date, divided by (y) $5,000,000.
The shares of Common Stock issuable upon exercise of this Warrant are
hereinafter referred to as the "Shares." This Warrant shall be exercisable at
any time and from time to time from [issue date], 19____, until ___________
____, 20___ [five years from date of issue].
2. Exercise Price. The exercise price (the "Exercise Price") per share
for which all or any of the Shares may be purchased shall be equal to [the
greater of (i) the Exercise Price (as reset, if applicable) of the Initial
Warrants on the first anniversary of the Closing Date, or (ii) 80% of the
average closing bid price of the Company's Common Stock for the 20 consecutive
trading days preceding [Closing Date Anniversary], [year], and shall be further
adjusted as provided herein.
3. Exercise. This Warrant may be exercised by the Holder hereof as to
all or any increment or increments of 100 Shares (or the balance of the Shares
if less than such number), upon delivery of written notice of intent to
exercise to the Company at the address set forth in the Debenture Purchase
Agreement, or such other address as the Company shall designate in a written
notice to the Holder hereof, together with this Warrant and payment to the
Company of the aggregate Exercise Price of the Shares so purchased. The
Exercise Price shall be payable, at the option of the
Holder, (i) by certified or bank check, (ii) by the surrender of the Debenture
or portion thereof having an outstanding principal balance equal to the
aggregate Exercise Price, or (iii) by the surrender of a portion of this
Warrant where the excess of (A) the Fair Market Value of the Shares subject to
the portion of this Warrant that is surrendered (the "Surrendered Shares"),
over (B) the aggregate Exercise Price of the Surrendered Shares, is equal to
the aggregate Exercise Price for the Shares to be issued. Upon payment of the
Exercise Price, the Holder shall be deemed to be the holder of record of the
Shares, notwithstanding that the stock transfer books of the Company may then
be closed or that certificates representing such Shares may not then be
actually delivered to the Holder. The Company shall as promptly as practicable
thereafter, and in any event within 15 days thereafter, execute and deliver to
the Holder of this Warrant a certificate or certificates for the total number
of whole Shares for which this Warrant is being exercised in such names and
denominations as are requested by such Holder. If this Warrant shall be
exercised with respect to less than all of the Shares, the Holder shall be
entitled upon surrender of the old Warrant to receive a new Warrant covering
the number of Shares in respect of which this Warrant shall not have been
exercised, which new Warrant shall in all other respects be identical to this
Warrant. The Company covenants and agrees that it will pay when due any and all
state and federal issue taxes which may be payable in respect of the issuance
of this Warrant or the issuance of any Shares upon exercise of this Warrant.
4. Covenants and Conditions. The above provisions are subject to the
following:
4.1 Restrictive Legend. Each certificate representing
Shares shall bear the following legend:
THE SECURITIES REPRESENTED HEREBY 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 TRANSFERRED WITHOUT SUCH
REGISTRATION OR EXEMPTION THEREFROM.
4.2 Validity; Reservation of Shares. The Company covenants
and agrees that all Shares which may be issued upon exercise of this Warrant
will, upon issuance and payment therefor pursuant to this Warrant, be validly
issued and outstanding, fully paid and nonassessable, free from all taxes,
liens, charges and preemptive rights, if any, with respect thereto or to the
issuance thereof. The Company shall at all times reserve and keep available for
issuance upon the exercise of this Warrant such number of authorized but
unissued shares of Common Stock as will be sufficient to permit the exercise in
full of this Warrant.
5. Transfer and Replacement of Warrant. Subject to the provisions of
Section 4, this Warrant may be transferred, in whole or in part, but only in
multiples of 10,000 Shares, to any person or business entity, by presentation
of the Warrant to the Company with written instructions for such transfer;
provided that the transferee is an accredited investor as defined in Regulation
D of the Securities Act of 1933, and such transfer is in compliance with all
applicable federal and state
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securities laws, provided that no transfer may be made to a competitor of the
Company without the Company's prior written consent. Upon such presentation for
transfer, the Company shall promptly execute and deliver a new Warrant or
Warrants in the form hereof in the name of the transferee or transferees and in
the denominations specified in such instructions. Upon receipt by the Company
of evidence reasonably satisfactory to it of the loss, theft or destruction of
this Warrant, and of indemnity or security reasonably satisfactory to it, or
upon surrender of this Warrant if mutilated, the Company will make and deliver
a new Warrant of like tenor, bearing the restrictive legend set forth above, in
lieu of this Warrant. This Warrant shall be promptly canceled by the Company
upon the surrender hereof in connection with any transfer or replacement. The
Company shall pay all expenses incurred by it in connection with the
preparation, issuance and delivery of Warrants under this Section.
6. Warrant Holder Not Shareholder; Rights Offering; Preemptive Rights.
Except as otherwise provided herein, this Warrant does not confer upon the
Holder, as such, any right whatsoever as a shareholder of the Company.
Notwithstanding the foregoing, if the Company should offer to all of the
Company's shareholders the right to purchase any securities of the Company,
then all shares of Common Stock that are then issuable upon exercise of this
Warrant shall be deemed to be outstanding and owned by the Holder and the
Holder shall be entitled to participate in such rights offering. The Company
shall not grant any preemptive rights with respect to any of its Common Stock
without the prior written consent of the Holder.
7. Adjustment of Number of Shares and Exercise Price.
7.1 Recapitalizations -- Adjustment of Number of Shares. If
all or any portion of this Warrant shall be exercised subsequent to any
transaction in which the Company shall (i) pay a stock dividend or otherwise
make a distribution or distributions on shares of its Common Stock payable in
shares of its capital stock (whether payable in shares of its Common Stock or
of capital stock of any other class), (ii) subdivide outstanding shares of
Common Stock into a larger number of shares, (iii) combine outstanding shares
of Common Stock into a smaller number of shares, (iv) issue by reclassification
of shares of Common Stock any shares of capital stock of the Company, or (v)
otherwise change its capital structure, occurring after the date hereof, as a
result of which shares of Common Stock shall be changed into the same or a
different number of shares of the same or another class or classes of
securities of the Company, then the Holder exercising this Warrant shall
receive, for the aggregate price paid upon such exercise, the aggregate number
and class of shares and such other securities which such Holder would have
received if this Warrant had been exercised immediately prior to the record
date for such transaction.
7.2 Mergers, Etc. -- Adjustment of Number of Shares. If all
or any portion of this Warrant shall be exercised subsequent to any merger,
consolidation, exchange of shares, separation, reorganization, or liquidation
of the Company, or other similar event, occurring after the date hereof, as a
result of which Shares of Common Stock shall be changed into the same or a
different number of shares of the same or another class or classes of
securities of the Company or another entity, or the holders of Common Stock are
entitled to receive cash or other property, then the Holder
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exercising this Warrant shall receive, for the aggregate price
paid upon such exercise, the aggregate number and class of shares, cash or
other property which such Holder would have received if this Warrant had been
exercised immediately prior to such merger, consolidation, exchange of shares,
separation, reorganization or liquidation, or other similar event.
7.3 Adjustment of Exercise Price Upon Issuance of Shares,
Warrants, Rights, Etc.
(a) Initial Exercise Price. The initial Exercise
Price shall be equal to the greater of (i) the Exercise Price (as reset, if
applicable) of the Initial Warrants on the first anniversary of the Closing
Date, or (ii) 80% of the average closing bid price of the Company's Common
Stock for the 20 consecutive trading days preceding [Closing Date Anniversary],
[year], and shall be further adjusted as provided herein.
(b) Recapitalizations. If the Company, at any time
prior to the expiration of this Warrant, shall (i) pay a stock dividend or
otherwise make a distribution or distributions on shares of its Common Stock
payable in shares of its capital stock (whether payable in shares of its Common
Stock or of capital stock of any class), (ii) subdivide outstanding shares of
Common Stock into a larger number of shares, (iii) combine outstanding shares
of Common Stock into a smaller number of shares, (iv) issue by reclassification
of shares of Common Stock any shares of capital stock of the Company, or (v)
otherwise change its capital structure, then the Exercise Price then in effect
shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock of the Company outstanding before such event and of
which the denominator shall be the number of shares of Common Stock outstanding
after such event. Such adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or reclassification.
(c) Distributions of Warrants or Rights, Issuance of
Stock or Warrants at Less Than Fair Market Value or Exercise Price. If the
Company, at any time prior to the expiration of this Warrant, shall (i) issue
rights or warrants to all holders of Common Stock entitling them to subscribe
for or purchase shares of Common Stock at a price per share less than the
lesser of the Fair Market Value of Common Stock or the Exercise Price then in
effect at the record date mentioned below, or (ii) issue additional Common
Stock, or warrants, options, or other securities convertible into Common Stock,
at a price or exercise or conversion price per share less than the lesser of
the Fair Market Value of the Common Stock or the Exercise Price then in effect
at the date of issuance or grant, the Exercise Price then in effect shall be
adjusted to equal (x) the sum of (A) the total number of shares of Common Stock
issuable upon exercise of this Warrant immediately prior to such issuance or
grant, multiplied by the Exercise Price then in effect, plus (B) the aggregate
consideration to be paid for such Common Stock or other securities (upon
issuance and/or exercise or conversion), divided by (y) the sum of (C) the
total number of shares of Common Stock issuable upon exercise of this Warrant
immediately prior to such issuance or grant, plus (D) the number of shares of
Common Stock or common stock equivalents issued or granted. Provided, that no
such adjustment shall be made which has the effect of increasing the Exercise
Price. Further provided, that the
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adjustment provided by this Section 7.3(c) shall not apply to issuance of (i)
securities pursuant to options, warrants, or conversion rights outstanding on
the date this Warrant is issued, (ii) up to a maximum of 100,000 shares of
Common Stock pursuant to the Company's 1992 Stock Option Plan, August 1996
Stock Option Plan, November 1996 Stock Option Plan and the 1998 Stock Option
Plan, and (iii) up to a maximum of 475,000 shares of Common Stock in settlement
of ▇▇▇▇▇ v. Diplomat Corporation, New York Supreme Court, No. 98/601194. Such
adjustment shall be made whenever such rights, warrants, Common Stock, or
securities are issued, and shall become effective immediately after (i) the
record date for the determination of stockholders entitled to receive such
rights or warrants, or (ii) the issuance of such Common Stock or common stock
equivalents. Provided, that upon the expiration of any right or warrant to
purchase or convert into Common Stock the issuance of which resulted in an
adjustment in the Exercise Price pursuant to this Section 7.3(c), if such right
or warrant shall expire and shall not have been exercised, the Exercise Price
shall immediately upon such expiration be recomputed and effective immediately
upon such expiration be increased to the price which it would have been (but
reflecting any other adjustments in the Exercise Price made pursuant to the
provisions of this Section 7 after the issuance of such rights or warrants) had
the adjustment of the Exercise Price made upon the issuance of such rights or
warrants been made on the basis of offering for subscription or purchase only
that number of shares of Common Stock actually purchased or obtained upon the
exercise of such rights or warrants actually exercised.
(d) [Reserved]
(e) Distributions of Other Property. If the Company,
at any time prior to the expiration of this Warrant, shall distribute to all
holders of Common Stock (and not to holders of Warrants on an as-exercised
basis) evidences of its indebtedness, or any of its assets, or rights or
warrants to subscribe for or purchase any security (excluding those referred to
in Section 7.3(c) or Section 7.3(d) above), the Exercise Price at which this
Warrant shall thereafter be exercisable shall be determined by multiplying the
Exercise Price in effect prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which (x)
the denominator shall be the per share Fair Market Value of Common Stock
determined as of the record date mentioned above, and of which (y) the
numerator shall be such per share Fair Market Value of the Common Stock on such
record date less the then fair market value at such record date of the portion
of such evidence of indebtedness, assets, or rights or warrants so distributed
applicable to one outstanding share of Common Stock, as determined by the Board
of Directors of the Company in good faith; provided, however that in the event
of a distribution exceeding ten percent of the net assets of the Company, then
such fair market value shall be determined by a nationally recognized or major
regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may be the firm that regularly
examines the financial statements of the Company) (an "Appraiser") selected in
good faith by the Holders of majority in interest of the Warrants, at the
Holders' sole expense; and provided, further, that the Company, after receipt
of the determination by such Appraiser shall have the right to select an
additional Appraiser, at the Company's sole expense, in which case the fair
market value shall be equal to the average of the determination by each such
Appraiser. Provided, that no such adjustment shall be made which has
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the effect of increasing the Exercise Price. In either case the adjustments
shall be described in a statement provided to all Holders of Warrants. Such
adjustment shall be made whenever any such distribution is made and shall
become effective immediately after the record date mentioned above.
7.4 Other Adjustments, Etc.
(a) Rounding. All calculations under this Section 7
shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be.
(b) Notice of Adjustments. Whenever the Exercise
Price is adjusted pursuant to this Section 7, the Company shall promptly mail
to each holder of Warrants, a notice setting forth the Exercise Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment.
(c) Exercise After Reclassification, Merger, Share
Exchange, or Sale of Assets. In case of any reclassification of the Common
Stock, any consolidation or merger of the Company with or into another person,
any sale or transfer of all or substantially all of the assets of the Company,
or any compulsory share exchange pursuant to which share exchange the Common
Stock is converted into other securities, cash or property, then the holders of
Warrants shall have the right thereafter to purchase upon exercise of such
Warrants only the kind and amount of shares of stock and other securities and
property receivable upon or deemed to be held following such reclassification,
consolidation, merger, sale, transfer, or share exchange by a holder of the
number of shares of the Common Stock which the holder of this Warrant would
have received upon exercise of this Warrant immediately prior to such
reclassification, consolidation, merger, sale, transfer, or share exchange. The
terms of any such consolidation, merger, sale transfer or share exchange shall
include such terms so as to continue to give to the holder of this Warrant the
right to receive the securities or property set forth in this Section 7.4(c)
upon any exercise following such consolidation, merger, sale, transfer, or
share exchange. This provision shall similarly apply to successive
reclassifications, consolidations, mergers, sales, transfers, or share
exchanges.
(d) Procedure for Other Adjustments. In case at any
time conditions shall arise by reason of action taken by the Company which in
the opinion of the Board of Directors of the Company are not adequately covered
by the other provisions hereof and which might materially and adversely affect
the rights of the holders of Warrants (different than or distinguished from the
effect generally on the rights of holders of any securities of the Company) or
in case at any time any such conditions are expected to arise in the opinion of
the Board of Directors of the Company by reason of any action contemplated by
the Company, an Appraiser selected by the Holders of more than 50% of the
Warrants, at the Holders' sole expense, shall give its opinion as to the
adjustment, if any (not inconsistent with the standards established in this
Section 7), of the Exercise Price (including, if necessary, any adjustment as
to the securities which may be acquired upon exercise) and any distribution
which is or would be required to preserve without diluting the rights of the
holders of the Warrants; provided, however, that the Company, after receipt of
the determination by such Appraiser, shall have the right to select an
additional Appraiser, at the Company's sole expense,
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in which case the adjustment shall be equal to the average of the
adjustments recommended by each such Appraiser. The Board of Directors of the
Company shall make the adjustment recommended forthwith upon the receipt of
such opinion or opinions or the taking of any such action contemplated, as the
case may be; provided, however, that no such adjustment of the Exercise Price
shall be made which in the opinion of the Appraiser(s) giving the aforesaid
opinion or opinions would result in an increase of the Exercise Price then in
effect.
(e) No Double Counting. Notwithstanding anything to
the contrary contained in this Warrant, to the extent that any adjustment is
made under the terms of this Section 7 to the Exercise Price or the number of
shares issuable hereunder, no further adjustment shall be made with respect to
the recapitalization, issuance of securities, or distribution requiring
adjustment. No adjustment shall be made with respect to the issuance of Common
Stock upon the exercise of rights for which an adjustment was made under
Section 7.4(d), or for any securities issued in connection with the Debenture
Purchase Agreement or the exercise of any such securities.
(f) Definition of Fair Market Value. "Fair Market
Value" per share of common stock means (i) in the case of a security listed or
admitted to trading on any national securities exchange, the last reported sale
price, regular way (as determined in accordance with the practices of such
exchange), on each day, or if no sale takes place on any day, the last reported
sale price, regular way) as determined in accordance with the practices of such
exchange) on the immediately preceding trading day (and in the case of a
security traded on more than one national securities exchange, at such price
upon the exchange on which the volume of trading during the last calendar year
was the greatest), (ii) in the case of a security not then listed or admitted
to trading on any national securities exchange, the last reported sale price on
such day, or if no sale takes place on such day, the average of the closing bid
and asked prices on such day, as reported by a reputable quotation service
designated by the Company, (iii) in the case of a security not then listed or
admitted to trading on any securities exchange and as to which no such reported
sale price or bid and asked prices are available, the average of the reported
high bid and low asked prices on such day, as reported by a reputable quotation
service, or The Wall Street Journal, or if there are no bids and asked prices
on such day, the average of the high bid and low asked prices, as so reported,
on the most recent day (not more than 30 days prior to the date in question)
for which prices have been so reported, and (iv) in the case of a security
determined by the Company's Board of Directors as not having an active quoted
market or in the case of other property, if the Common Stock is no longer
publicly traded the fair market value of a share of Common Stock or other
property as determined by an Appraiser (as defined in Section 7.3(e) above)
selected in good faith by the Holders of more than 50% of the Warrants, at the
Holders' sole expense; provided, however, that the Company, after receipt of
the determination by such Appraiser, shall have the right to select an
additional Appraiser, at the Company's sole expense, in which case, the fair
market value shall be equal to the average of the determinations by each such
Appraiser.
8. Certain Notices. If at any time the Company shall propose to (i)
declare any cash dividend upon its Common Stock; (ii) declare any dividend upon
its Common Stock payable in stock or make any special dividend or other
distribution to the holders of its Common Stock; (iii) offer for
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subscription to the holders of any of its Common Stock any additional shares of
stock in any class or other rights; (iv) reorganize, or reclassify the capital
stock of the Company, or consolidate, merge or otherwise combine with, or sell
all or substantially all of its assets to another corporation; (v) voluntarily
or involuntarily dissolve, liquidate or wind up the affairs of the Company; or
(vi) redeem or purchase any shares of its capital stock or securities
convertible into its capital stock, then the Company shall give to the Holder
of this Warrant, by certified or registered mail, (i) at least 10 days' prior
written notice of the date on which the books of the Company shall close or a
record shall be taken for such dividend, distribution or subscription rights or
for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, and (ii) in the case of such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at least
15 days' prior written notice of the date when the same shall take place. Any
notice required by clause (i) shall also specify, in the case of any such
dividend, distribution or subscription rights, the date on which the holders of
Common Stock shall be entitled thereto, and any notice required by clause (ii)
shall specify the date on which the holders of Common Stock shall be entitled
to exchange their Common Stock for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, as the case may be.
9. Article and Section Headings. Numbered and titled article and
section headings are for convenience only and shall not be construed as
amplifying or limiting any of the provisions of this Warrant.
10. Notice. Any and all notices, elections or demands permitted or
required to be made under this Warrant shall be in writing, signed by the party
giving such notice, election or demand and shall be delivered personally,
telecopied, telexed, or sent by certified mail or overnight via nationally
recognized courier service, to the other party at the address set forth below,
or at such other address as may be supplied in writing and of which receipt has
been acknowledged in writing. The date of personal delivery or telecopy; or the
date two business days after the date of mailing, or the date of the next
business day after delivery to a courier service, as the case may be, shall be
deemed to be the date of such notice, election or demand.
To the Holder: Sirrom Capital Corporation d/b/a Tandem Capital
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: C. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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To the Company: Diplomat Corporation
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Gersten, Savage, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
11. Severability. If any provision of this Warrant or the application
thereof to any person or circumstances shall be invalid or unenforceable to any
extent, the remainder of this Warrant and the application of such provisions to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
12. Entire Agreement. This Warrant between the Company and Holder
represents the entire agreement between the parties concerning the subject
matter hereof, and all oral discussions and prior agreement are merged herein.
13. Governing Law and Amendments. This Warrant shall be construed and
enforced under the laws of the State of New York applicable to contracts to be
wholly performed in such State. No amendment or modification hereof shall be
effective except in a writing executed by each of the parties hereto.
14. Counterparts. This Warrant may be executed in any number of
counterparts and by different parties to this Warrant in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same Warrant.
15. Jurisdiction and Venue. The Company hereby consents to
jurisdiction, service of process, and venue in the courts of the State of
Tennessee or the State of New York, for the purpose of any action arising out
of any of its obligations under this Warrant, and expressly waives jury trial
and any and all objections it may have as to jurisdiction, service of process,
and venue in such courts.
16. Equity Participation. This Warrant is issued in connection with
the Debenture Purchase Agreement. It is intended that this Warrant constitute
an equity participation under and pursuant to T.C.A. ss.▇▇-▇▇-▇▇▇, et. seq. and
that equity participation be permitted under said statutes and not constitute
interest on the Debenture. If under any circumstances whatsoever, fulfillment
of any obligation of this Warrant, the Debenture Purchase Agreement, or any
other agreement or document executed in connection with the Debenture Purchase
Agreement, shall violate the lawful limit of any applicable usury statute or
any other applicable law with regard to obligations of like character and
amount, then the obligation to be fulfilled shall be reduced to such lawful
limit, such
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that in no event shall there occur, under this Warrant, the Debenture Purchase
Agreement, or any other document or instrument executed in connection with the
Debenture Purchase Agreement, any violation of such lawful limit, but such
obligation shall be fulfilled to the lawful limit. If any sum is collected in
excess of the lawful limit, such excess shall be applied to reduce the
principal amount of the Debenture.
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IN WITNESS WHEREOF, the parties hereto have executed this Stock
Purchase Warrant this ____________ day of _______________, ____.
COMPANY: DIPLOMAT DIRECT MARKETING CORPORATION
By:
------------------------------------------
Title:
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HOLDER: SIRROM CAPITAL CORPORATION
d/b/a TANDEM CAPITAL
By:
------------------------------------------
Title:
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