exv10w3



 






Exhibit 10.3



THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER
THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR DIRT MOTOR SPORTS, INC. SHALL HAVE
RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO DIRT MOTOR SPORTS, INC. THAT REGISTRATION
OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES
LAWS IS NOT REQUIRED.




WARRANT TO PURCHASE




SHARES OF COMMON STOCK




OF




DIRT MOTOR SPORTS, INC.




Expires October 27, 2012




			
	No.:
	 	Number of Shares:                     
	Date of Issuance:                     , ___	 	 






     FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the undersigned, Dirt
Motor Sports, Inc., a Delaware corporation (together with its successors and assigns, the
“Issuer”), hereby certifies that ___. or its registered assigns is entitled to
subscribe for and purchase, during the Term (as hereinafter defined), up to ___(___)
shares (subject to adjustment as hereinafter provided) of the duly authorized, validly issued,
fully paid and non-assessable Common Stock of the Issuer, at an exercise price per share equal to
the Warrant Price then in effect, subject, however, to the provisions and upon the terms and
conditions hereinafter set forth. Capitalized terms used in this Warrant and not otherwise defined
herein shall have the respective meanings specified in Section 9 hereof.



     1. Term. The term of this Warrant shall commence on ___, ___and shall
expire at 5:00 p.m., eastern time, on October 27, 2012 (such period being the “Term”).



     2. Method of Exercise Payment; Issuance of New Warrant; Transfer and Exchange.



     (a) Time of Exercise. The purchase rights represented by this Warrant may be
exercised in whole or in part during the Term.



     (b) Method of Exercise. The Holder hereof may exercise this Warrant, in whole or in
part, by the surrender of this Warrant (with the exercise form attached hereto duly executed) at
the principal office of the Issuer, and by the payment to the Issuer of an amount of consideration



 









 







therefor equal to the Warrant Price in effect on the date of such exercise multiplied by the
number of shares of Warrant Stock with respect to which this Warrant is then being exercised,
payable at such Holder’s election (i) by certified or official bank check or by wire transfer to an
account designated by the Issuer, (ii) by “cashless exercise” in accordance with the provisions of
subsection (c) of this Section 2, but only when a registration statement under the Securities Act
providing for the resale of the Warrant Stock is not then in effect, or (iii) by a combination of
the foregoing methods of payment selected by the Holder of this Warrant.



     (c) Cashless Exercise. Notwithstanding any provisions herein to the contrary and
commencing one (1) year following the Original Issue Date, if (i) the Per Share Market Value of one
share of Common Stock is greater than the Warrant Price (at the date of calculation as set forth
below) and (ii) a registration statement under the Securities Act providing for the resale of the
Warrant Stock is not then in effect, in lieu of exercising this Warrant by payment of cash, the
Holder may exercise this Warrant by a cashless exercise and shall receive the number of shares of
Common Stock equal to an amount (as determined below) by surrender of this Warrant at the principal
office of the Issuer together with the properly endorsed Notice of Exercise in which event the
Issuer shall issue to the Holder a number of shares of Common Stock computed using the following
formula:



	 	 	 	 
	 

	 	X = Y- (A)(Y)
	 	 
	 

	 	B     	 	 






	 	 	 	 	 	 	 
	Where

	 	X
	 	=
	 	the number of shares of Common Stock to be issued to the Holder.
	 
	 	 	 	 	 	 
	 

	 	Y
	 	=
	 	the number of shares of Common Stock purchasable upon
exercise of all of the Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being exercised.
	 
	 	 	 	 	 	 
	 

	 	A
	 	=
	 	the Warrant Price.
	 
	 	 	 	 	 	 
	 

	 	B
	 	=
	 	the Per Share Market Value of one share of Common Stock.






     (d) Issuance of Stock Certificates. In the event of any exercise of the rights
represented by this Warrant in accordance with and subject to the terms and conditions hereof, (i)
certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise
and delivered to the Holder hereof within a reasonable time, not exceeding three (3) Trading Days
after such exercise or, at the request of the Holder (provided that a registration statement under
the Securities Act providing for the resale of the Warrant Stock is then in effect and the Holder
provides to Issuer a representation letter stating that it will comply with all applicable
securities laws in connection with the sale, including, without limitation, the prospectus delivery
requirements), issued and delivered to the Depository Trust Company (“DTC”) account on the
Holder’s behalf via the Deposit Withdrawal Agent Commission System (“DWAC”) within a
reasonable time, not exceeding three (3) Trading Days after such exercise, and the Holder hereof
shall be deemed for all purposes to be the holder of the shares of Warrant Stock so purchased as of
the date of such exercise and (ii) unless this Warrant has expired, a new Warrant representing the
number of shares of Warrant Stock, if any, with respect to which this Warrant shall not then



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have been exercised (less any amount thereof which shall have been canceled in payment or
partial payment of the Warrant Price as hereinabove provided) shall also be issued to the Holder
hereof at the Issuer’s expense within a reasonable time, not exceeding seven (7) Trading Days after
such exercise.



     (e) Transferability of Warrant. Subject to Section 2(g), this Warrant may be
transferred by a Holder without the consent of the Issuer. If transferred pursuant to this
paragraph and subject to the provisions of subsection (g) of this Section 2, this Warrant may be
transferred on the books of the Issuer by the Holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant at the principal office of the Issuer, properly endorsed
(by the Holder executing an assignment in the form attached hereto) and upon payment of any
necessary transfer tax or other governmental charge imposed upon such transfer. This Warrant is
exchangeable at the principal office of the Issuer for Warrants for the purchase of the same
aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase
such number of shares of Warrant Stock as the Holder hereof shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and
shall be identical with this Warrant except as to the number of shares of Warrant Stock issuable
pursuant thereto.



     (f) Continuing Rights of Holder. The Issuer will, at the time of or at any time after
each exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing the
extent, if any, of its continuing obligation to afford to such Holder all rights to which such
Holder shall continue to be entitled after such exercise in accordance with the terms of this
Warrant, provided that if any such Holder shall fail to make any such request, the failure
shall not affect the continuing obligation of the Issuer to afford such rights to such Holder.



(g) Compliance with Securities Laws.





     (i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant or
the shares of Warrant 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
Warrant Stock to be issued upon exercise hereof except pursuant to an effective registration
statement, or an exemption from registration, under the Securities Act and any applicable
state securities laws.




     (ii) Except as provided in paragraph (iii) below, this Warrant and all certificates
representing shares of Warrant Stock issued upon exercise hereof shall be stamped or
imprinted with a legend in substantially the following form:




THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND MAY
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS



3









 







REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE
SECURITIES LAWS OR DIRT MOTOR SPORTS, INC. SHALL HAVE RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO DIRT MOTOR SPORTS,
INC. THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT
AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.




     (iii) The Issuer agrees to reissue this Warrant or certificates representing any of the
Warrant Stock, without the legend set forth above if at such time, prior to making any
transfer of any such securities, the Holder shall give written notice to the Issuer
describing the manner and terms of such transfer and removal as the Issuer may reasonably
request. Such proposed transfer and removal will not be effected until: (a) either (i) the
Issuer has received an opinion of counsel reasonably satisfactory to the Issuer, to the
effect that the registration of such securities under the Securities Act is not required in
connection with such proposed transfer, (ii) a registration statement under the Securities
Act covering such proposed disposition has been filed by the Issuer with the Securities and
Exchange Commission and has become effective under the Securities Act and the holder has
provided to Issuer a representation letter stating that it will comply with any prospectus
delivery requirements, (iii) the Issuer has received other evidence reasonably satisfactory
to the Issuer that such registration and qualification under the Securities Act and state
securities laws are not required, or (iv) the Holder provides the Issuer with reasonable
assurances that such security can be sold pursuant to Rule 144 under the Securities Act; and
(b) either (i) the Issuer has received an opinion of counsel reasonably satisfactory to the
Issuer, to the effect that registration or qualification under the securities or “blue sky”
laws of any state is not required in connection with such proposed disposition, or (ii)
compliance with applicable state securities or “blue sky” laws has been effected or a valid
exemption exists with respect thereto. The Issuer will respond to any such notice from a
holder within five (5) business days. In the case of any proposed transfer under this
Section 2(g), the Issuer will use reasonable efforts to comply with any such applicable
state securities or “blue sky” laws, but shall in no event be required, (x) to qualify to do
business in any state where it is not then qualified, or (y) to take any action that would
subject it to tax or to the general service of process in any state where it is not then
subject. The restrictions on transfer contained in this Section 2(g) shall be in addition
to, and not by way of limitation of, any other restrictions on transfer contained in any
other section of this Warrant. Whenever a certificate representing the Warrant Stock is
required to be issued to a the Holder without a legend, in lieu of delivering physical
certificates representing the Warrant Stock (provided that a registration statement under
the Securities Act providing for the resale of the Warrant Stock is then in effect and the
Holder complies with all applicable securities laws in connection with the sale, including,
without limitation, the prospectus delivery requirements), the Issuer shall cause its
transfer agent to electronically transmit the Warrant Stock to the Holder by crediting the
account of the Holder’s Prime Broker with DTC through its DWAC system (to the extent not
inconsistent with any provisions of this Warrant).



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     (h) In no event may the Holder exercise this Warrant in whole or in part unless the Holder is
an “accredited investor” as defined in Regulation D under the Securities Act.



     3. Stock Fully Paid; Reservation and Listing of Shares; Covenants.



     (a) Stock Fully Paid. The Issuer represents, warrants, covenants and agrees that all
shares of Warrant Stock which may be issued upon the exercise of this Warrant or otherwise
hereunder will, when issued in accordance with the terms of this Warrant, be duly authorized,
validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by
or through the Issuer. The Issuer further covenants and agrees that during the period within which
this Warrant may be exercised, the Issuer will at all times have authorized and reserved for the
purpose of the issue upon exercise of this Warrant a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.



     (b) Reservation. If any shares of Common Stock required to be reserved for issuance
upon exercise of this Warrant or as otherwise provided hereunder require registration or
qualification with any governmental authority under any federal or state law before such shares may
be so issued, the Issuer will in good faith use its reasonable best efforts as expeditiously as
possible at its expense to cause such shares to be duly registered or qualified. If the Issuer
shall list any shares of Common Stock on any securities exchange or market it will, at its expense,
list thereon, maintain and increase when necessary such listing, of, all shares of Warrant Stock
from time to time issued upon exercise of this Warrant or as otherwise provided hereunder (provided
that such Warrant Stock has been registered pursuant to a registration statement under the
Securities Act then in effect), and, to the extent permissible under the applicable securities
exchange rules, all unissued shares of Warrant Stock which are at any time issuable hereunder, so
long as any shares of Common Stock shall be so listed. The Issuer will also so list on each
securities exchange or market, and will maintain such listing of, any other securities which the
Holder of this Warrant shall be entitled to receive upon the exercise of this Warrant if at the
time any securities of the same class shall be listed on such securities exchange or market by the
Issuer.



     (c) Covenants. The Issuer shall not by any action including, without limitation,
amending the Articles of Incorporation or the by-laws of the Issuer, or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other
action, avoid or seek to avoid the observance or performance of any of 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 actions as may be necessary or appropriate to protect the rights of the Holder hereof
against dilution (to the extent specifically provided herein) or impairment. Without limiting the
generality of the foregoing, the Issuer will (i) not permit the par value, if any, of its Common
Stock to exceed the then effective Warrant Price, (ii) not amend or modify any provision of the
Articles of Incorporation or by-laws of the Issuer in any manner that would adversely affect the
rights of the Holders of the Warrants in their capacity as Holders of the Warrants, (iii) take all
such action as may be reasonably necessary in order that the Issuer may validly and legally issue
fully paid and nonassessable shares of Common Stock, free and clear of any liens, claims,
encumbrances and restrictions (other than as provided herein) upon the



5









 







exercise of this Warrant, and (iv) use its reasonable best efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof
as may be reasonably necessary to enable the Issuer to perform its obligations under this Warrant.



     (d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence satisfactory to
the Issuer of the ownership of and the loss, theft, destruction or mutilation of any Warrant and,
in the case of any such loss, theft or destruction, upon receipt of indemnity or security
satisfactory to the Issuer or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same
number of shares of Common Stock.



     4. Adjustment of Warrant Price. The price at which shares of Warrant Stock may be
purchased upon exercise of this Warrant shall be subject to adjustment from time to time as set
forth in this Section 4. The Issuer shall give the Holder notice of any event described below which
requires an adjustment pursuant to this Section 4 in accordance with Section 5.



     (a) Recapitalization, Reorganization, Reclassification, Consolidation, Merger or Sale.




     (i) In case the Issuer after the Original Issue Date shall do any of the following
(each, a “Triggering Event”): (a) consolidate or merge with or into another
corporation where the holders of outstanding Voting Stock prior to such merger or
consolidation do not own over 50% of the outstanding Voting Stock of the merged or
consolidated entity immediately after such merger or consolidation, or (b) sell all or
substantially all of its properties or assets to any other Person, or (c) change the Common
Stock to the same or different number of shares of any class or classes of stock, whether by
reclassification, exchange, substitution or otherwise (other than by way of a stock split or
combination of shares or stock dividends or distributions provided for in Section 4(b) or
Section 4(c)), or (d) effect a capital reorganization (other than by way of a stock split or
combination of shares or stock dividends or distributions provided for in Section 4(b) or
Section 4(c)), then, and in the case of each such Triggering Event, proper provision shall
be made so that, upon the basis and the terms and in the manner provided in this Warrant,
the Holder of this Warrant shall be entitled upon the exercise hereof at any time after the
consummation of such Triggering Event, to the extent this Warrant is not exercised prior to
such Triggering Event, to receive at the Warrant Price in effect at the time immediately
prior to the consummation of such Triggering Event in lieu of the Common Stock issuable upon
such exercise of this Warrant prior to such Triggering Event, the securities, cash and
property to which such Holder would have been entitled upon the consummation of such
Triggering Event if such Holder had exercised the rights represented by this Warrant
immediately prior thereto, subject to adjustments (subsequent to such corporate action) as
nearly equivalent as possible to the adjustments provided for elsewhere in this Section 4.




     (ii) Notwithstanding anything contained in this Warrant to the contrary, a Triggering
Event shall not be deemed to have occurred if, prior to the consummation thereof, each
Person (other than the Issuer) which may be required to deliver any



6









 







securities, cash or property upon the exercise of this Warrant as provided herein shall
assume, by written instrument delivered to, and reasonably satisfactory to, the Holder of
this Warrant, (A) the obligations of the Issuer under this Warrant (and if the Issuer shall
survive the consummation of such Triggering Event, such assumption shall be in addition to,
and shall not release the Issuer from, any continuing obligations of the Issuer under this
Warrant) and (B) the obligation to deliver to such Holder such shares of securities, cash or
property as, in accordance with the foregoing provisions of this subsection (a), such Holder
shall be entitled to receive, and such Person shall have similarly delivered to such Holder
a written acknowledgement executed by the President or Chief Financial Officer of the
Company, stating that this Warrant shall thereafter continue in full force and effect and
the terms hereof (including, without limitation, all of the provisions of this subsection
(a)) shall be applicable to the securities, cash or property which such Person may be
required to deliver upon any exercise of this Warrant or the exercise of any rights pursuant
hereto.



          (b) Stock Dividends, Subdivisions and Combinations. If at any time the Issuer shall:





          (i) make or issue or set a record date for the holders of its Common Stock for the
purpose of entitling them to receive a dividend payable in, or other distribution of, shares
of Common Stock,




          (ii) subdivide its outstanding shares of Common Stock into a larger number of shares of
Common Stock, or




          (iii) combine its outstanding shares of Common Stock into a smaller number of shares of
Common Stock,


then (1) the number of shares of Common Stock for which this Warrant is exercisable immediately
after the occurrence of any such event shall be adjusted to equal the number of shares of Common
Stock which a record holder of the same number of shares of Common Stock for which this Warrant is
exercisable immediately prior to the occurrence of such event would own or be entitled to receive
after the happening of such event, and (2) the Warrant Price then in effect shall be adjusted to
equal (A) the Warrant Price then in effect multiplied by the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to the adjustment divided by (B) the number of
shares of Common Stock for which this Warrant is exercisable immediately after such adjustment.



Notwithstanding the foregoing, if such record date shall have been fixed and such dividend is not
fully paid or if such distribution is not fully made on the date fixed therefor, the Warrant Price
shall be adjusted pursuant to this paragraph as of the time of actual payment of such dividends or
distributions.




     (c) Certain Other Distributions. If at any time the Issuer shall make or issue or set
a record date for the determination of the holders of its Common Stock for the purpose of entitling
them to receive any dividend or other distribution of:



7









 






          (i) cash (other than a cash dividend payable out of earnings or earned surplus legally
available for the payment of dividends under the laws of the jurisdiction of incorporation
of the Issuer),




          (ii) any evidences of its indebtedness, any shares of stock of any class or any other
securities or property of any nature whatsoever (other than cash, Common Stock Equivalents
or Additional Shares of Common Stock), or




          (iii) any warrants or other rights to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities or property of any
nature whatsoever (other than cash, Common Stock Equivalents or Additional Shares of Common
Stock),


then (1) the number of shares of Common Stock for which this Warrant is exercisable shall be
adjusted to equal the product of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such adjustment multiplied by a fraction (A) the numerator of
which shall be the Per Share Market Value of Common Stock at the date of taking such record and (B)
the denominator of which shall be such Per Share Market Value minus the amount allocable to one
share of Common Stock of any such cash so distributable and of the fair value (as determined in
good faith by the Board of Directors of the Issuer and supported by an opinion from an investment
banking firm of recognized national standing acceptable to (but not affiliated with) the Holder) of
any and all such evidences of indebtedness, shares of stock, other securities or property or
warrants or other subscription or purchase rights so distributable, and (2) the Warrant Price then
in effect shall be adjusted to equal (A) the Warrant Price then in effect multiplied by the number
of shares of Common Stock for which this Warrant is exercisable immediately prior to the adjustment
divided by (B) the number of shares of Common Stock for which this Warrant is exercisable
immediately after such adjustment. A reclassification of the 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) into shares of
Common Stock and shares of any other class of stock shall be deemed a distribution by the Issuer to
the holders of its Common Stock of such shares of such other class of stock within the meaning of
this Section 4(c) and, if the outstanding shares of Common Stock shall be changed into a larger or
smaller number of shares of Common Stock as a part of such reclassification, such change shall be
deemed a subdivision or combination, as the case may be, of the outstanding shares of Common Stock
within the meaning of Section 4(b).



Notwithstanding the foregoing, if such record date shall have been fixed and such dividend is not
fully paid or if such distribution is not fully made on the date fixed therefor, the Warrant Price
shall be adjusted pursuant to this Section 4(c) as of the time of actual payment of such dividends
or distributions.




     (d) Issuance of Additional Shares of Common Stock.



          (i) In the event the Issuer shall at any time following the Original Issue Date through and
including the completion of a Qualified Financing issue any Additional Shares of Common Stock in a
transaction that does not include warrants (otherwise than as provided in the



8









 







foregoing subsections (a) through (c) of this Section 4), at a price per share less than the
Warrant Price then in effect or without consideration, then the Warrant Price upon each such
issuance shall be adjusted to that price determined by multiplying the Warrant Price then in effect
by a fraction:




     (A) the numerator of which shall be equal to the sum of (x) the number of
 shares of Outstanding Common Stock immediately prior to the issuance of such
Additional Shares of Common Stock plus (y) the number of shares of Common
Stock (rounded to the nearest whole share) which the aggregate consideration for the
total number of such Additional Shares of Common Stock so issued would purchase at a
price per share equal to the Warrant Price then in effect, and




     (B) the denominator of which shall be equal to the number of shares of
Outstanding Common Stock immediately after the issuance of such Additional Shares of
Common Stock.



          (ii) In the event the Issuer shall at any time following the Original Issue Date and including
and through the completion of a Qualified Financing issue any Additional Shares of Common Stock in
a transaction that includes the issuance of warrants (otherwise than as provided in the foregoing
subsections (a) through (c) of this Section 4), and the exercise price of such warrants is less
than the Warrant Price then in effect (the “New Warrants Exercise Price”), then the Warrant Price
upon each such issuance shall be adjusted to the applicable New Warrants Exercise Price.




          (iii) In the event the Issuer following completion of a Qualified Financing issues any
Additional Shares of Common Stock (otherwise than as provided in the foregoing subsections (a)
through (c) of this Section 4), at a price per share less than the Warrant Price then in effect or
without consideration, then the Warrant Price upon each such issuance shall be adjusted to that
price determined by multiplying the Warrant Price then in effect by a fraction:





     (A) the numerator of which shall be equal to the sum of (x) the number of
 shares of Outstanding Common Stock immediately prior to the issuance of such
Additional Shares of Common Stock plus (y) the number of shares of Common
Stock (rounded to the nearest whole share) which the aggregate consideration for the
total number of such Additional Shares of Common Stock so issued would purchase at a
price per share equal to the Warrant Price then in effect, and




     (B) the denominator of which shall be equal to the number of shares of
Outstanding Common Stock immediately after the issuance of such Additional Shares of
Common Stock.



          (iv) No adjustment of the number of shares of Common Stock for which this Warrant shall be
exercisable shall be made under paragraphs (i), (ii) or (iii) of Section 4(d) upon the issuance of
any Additional Shares of Common Stock which are issued pursuant to the


9









 







exercise of any Common Stock Equivalents, if any such adjustment shall previously have been made
upon the issuance of such Common Stock Equivalents (or upon the issuance of any warrant or other
rights therefor) pursuant to Section 4(e).




     (e) Issuance of Common Stock Equivalents. If at any time the Issuer shall issue or
sell any Common Stock Equivalents, whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the aggregate price per share for which Common Stock is issuable upon
such conversion or exchange plus the consideration received by the Issuer for issuance of such
Common Stock Equivalent divided by the number of shares of Common Stock issuable pursuant to such
Common Stock Equivalent (the “Aggregate Per Common Share Price”) shall be less than the
Warrant Price then in effect, or if, after any such issuance of Common Stock Equivalents, the price
per share for which Additional Shares of Common Stock may be issuable thereafter is amended or
adjusted, and such price as so amended shall make the Aggregate Per Common Share Price be less than
the Warrant Price in effect at the time of such amendment or adjustment, then the Warrant Price
upon each such issuance or amendment shall be adjusted as provided in Section 4(d). No further
adjustment of the Warrant Price then in effect shall be made under this Section 4(e) upon the
issuance of any Common Stock Equivalents which are issued pursuant to the exercise of any warrants
or other subscription or purchase rights therefor, if any such adjustment shall previously have
been made upon the issuance of such warrants or other rights pursuant to this Section 4(e). No
further adjustments of the Warrant Price then in effect shall be made upon the actual issue of such
Common Stock upon conversion or exchange of such Common Stock Equivalents.



     (f) Superseding Adjustment. If, at any time after any adjustment of the number of
shares of Common Stock for which this Warrant is exercisable and the Warrant Price then in effect
shall have been made pursuant to Section 4(e) as the result of any issuance of Common Stock
Equivalents, and (i) such Common Stock Equivalents, or the right of conversion or exchange in such
Common Stock Equivalents, shall expire, and all or a portion of such or the right of conversion or
exchange with respect to all or a portion of such Common Stock Equivalents, as the case may be,
shall not have been exercised, or (ii) the consideration per share for which shares of Common Stock
are issuable pursuant to such Common Stock Equivalents shall be increased, then such previous
adjustment shall be rescinded and annulled and the Additional Shares of Common Stock which were
deemed to have been issued by virtue of the computation made in connection with the adjustment so
rescinded and annulled shall no longer be deemed to have been issued by virtue of such computation.
Upon the occurrence of an event set forth in this Section 4(g) above, there shall be a
recomputation made of the effect of such Common Stock Equivalents on the basis of: (i) treating the
number of Additional Shares of Common Stock theretofore actually issued or issuable pursuant to the
previous exercise of Common Stock Equivalents or any such right of conversion or exchange, as
having been issued on the date or dates of any such exercise and for the consideration actually
received and receivable therefor, and (ii) treating any such Common Stock Equivalents which then
remain outstanding as having been granted or issued immediately after the time of such increase of
the consideration per share for which Additional Shares of Common Stock are issuable under such
Common Stock Equivalents; whereupon a new adjustment of the number of shares of Common Stock for
which this Warrant is exercisable and the Warrant Price then in effect shall be made, which new
adjustment shall supersede the previous adjustment so rescinded and annulled.



10









 





     (h) Purchase of Common Stock by the Issuer. If the Issuer at any time while this
Warrant is outstanding shall, directly or indirectly through a Subsidiary or otherwise, purchase,
redeem or otherwise acquire any shares of Common Stock at a price per share greater than the Per
Share Market Value, then the Warrant Price upon each such purchase, redemption or acquisition shall
be adjusted to that price determined by multiplying such Warrant Price by a fraction (i) the
numerator of which shall be the number of shares of Outstanding Common Stock immediately prior to
such purchase, redemption or acquisition minus the number of shares of Common Stock which the
aggregate consideration for the total number of such shares of Common Stock so purchased, redeemed
or acquired would purchase at the Per Share Market Value; and (ii) the denominator of which shall
be the number of shares of Outstanding Common Stock immediately after such purchase, redemption or
acquisition. For the purposes of this subsection (h), the date as of which the Per Share Market
Price shall be computed shall be the earlier of (x) the date on which the Issuer shall enter into a
firm contract for the purchase, redemption or acquisition of such Common Stock, or (y) the date of
actual purchase, redemption or acquisition of such Common Stock. For the purposes of this
subsection (h), a purchase, redemption or acquisition of a Common Stock Equivalent shall be deemed
to be a purchase of the underlying Common Stock, and the computation herein required shall be made
on the basis of the full exercise, conversion or exchange of such Common Stock Equivalent on the
date as of which such computation is required hereby to be made, whether or not such Common Stock
Equivalent is actually exercisable, convertible or exchangeable on such date.



     (i) Other Provisions applicable to Adjustments under this Section. The following
provisions shall be applicable to the making of adjustments of the number of shares of Common Stock
for which this Warrant is exercisable and the Warrant Price then in effect provided for in this
Section 4:



          (i) Computation of Consideration. To the extent that any Additional Shares of Common
Stock or any Common Stock Equivalents (or any warrants or other rights therefor) shall be issued
for cash consideration, the consideration received by the Issuer therefor shall be the amount of
the cash received by the Issuer therefor, or, if such Additional Shares of Common Stock or Common
Stock Equivalents are offered by the Issuer for subscription, the subscription price, or, if such
Additional Shares of Common Stock or Common Stock Equivalents are sold to underwriters or dealers
for public offering without a subscription offering, the initial public offering price (in any such
case subtracting any amounts paid or receivable for accrued interest or accrued dividends and
without taking into account any compensation, discounts or expenses paid or incurred by the Issuer
for and in the underwriting of, or otherwise in connection with, the issuance thereof). In
connection with any merger or consolidation in which the Issuer is the surviving corporation (other
than any consolidation or merger in which the previously outstanding shares of Common Stock of the
Issuer shall be changed to or exchanged for the stock or other securities of another corporation),
the amount of consideration therefore shall be, deemed to be the fair value, as determined
reasonably and in good faith by the Board, of such portion of the assets and business of the
nonsurviving corporation as the Board may determine to be attributable to such shares of Common
Stock or Common Stock Equivalents, as the case may be. The consideration for any Additional Shares
of Common Stock issuable pursuant to any warrants or other rights to subscribe for or purchase the
same shall be the consideration received


11









 








by the Issuer for issuing such warrants or other rights plus the additional consideration payable
to the Issuer upon exercise of such warrants or other rights. The consideration for any Additional
Shares of Common Stock issuable pursuant to the terms of any Common Stock Equivalents shall be the
consideration received by the Issuer for issuing warrants or other rights to subscribe for or
purchase such Common Stock Equivalents, plus the consideration paid or payable to the Issuer in
respect of the subscription for or purchase of such Common Stock Equivalents, plus the additional
consideration, if any, payable to the Issuer upon the exercise of the right of conversion or
exchange in such Common Stock Equivalents. In the event of any consolidation or merger of the
Issuer in which the Issuer is not the surviving corporation or in which the previously outstanding
shares of Common Stock of the Issuer shall be changed into or exchanged for the stock or other
securities of another corporation, or in the event of any sale of all or substantially all of the
assets of the Issuer for stock or other securities of any corporation, the Issuer shall be deemed
to have issued a number of shares of its Common Stock for stock or securities or other property of
the other corporation computed on the basis of the actual exchange ratio on which the transaction
was predicated, and for a consideration equal to the fair market value on the date of such
transaction of all such stock or securities or other property of the other corporation. In the
event any consideration received by the Issuer for any securities consists of property other than
cash, the fair market value thereof at the time of issuance or as otherwise applicable shall be as
determined in good faith by the Board. In the event Common Stock is issued with other shares or
securities or other assets of the Issuer for consideration which covers both, the consideration
computed as provided in this Section 4(i)(i) shall be allocated among such securities and assets as
determined in good faith by the Board.




          (ii) When Adjustments to Be Made. The adjustments required by this Section 4 shall be
made whenever and as often as any specified event requiring an adjustment shall occur, except that
any adjustment of the number of shares of Common Stock for which this Warrant is exercisable that
would otherwise be required may be postponed (except in the case of a subdivision or combination of
shares of the Common Stock, as provided for in Section 4(b)) up to, but not beyond the date of
exercise if such adjustment either by itself or with other adjustments not previously made adds or
subtracts less than one percent (1%) of the shares of Common Stock for which this Warrant is
exercisable immediately prior to the making of such adjustment. Any adjustment representing a
change of less than such minimum amount (except as aforesaid) which is postponed shall be carried
forward and made as soon as such adjustment, together with other adjustments required by this
Section 4 and not previously made, would result in a minimum adjustment or on the date of exercise.
For the purpose of any adjustment, any specified event shall be deemed to have occurred at the
close of business on the date of its occurrence.




          (iii) Fractional Interests. In computing adjustments under this Section 4, fractional
interests in Common Stock shall be taken into account to the nearest one one-hundredth
(1/100th) of a share.




          (iv) When Adjustment Not Required. If the Issuer shall take a record of the holders
of its Common Stock for the purpose of entitling them to receive a dividend or distribution or
subscription or purchase rights and shall, thereafter and before the distribution to stockholders
thereof, legally abandon its plan to pay or deliver such dividend, distribution,


12









 







 subscription or purchase rights, then thereafter no adjustment shall be required by reason of
the taking of such record and any such adjustment previously made in respect thereof shall be
rescinded and annulled.




     (j) Form of Warrant after Adjustments. The form of this Warrant need not be changed
because of any adjustments in the Warrant Price or the number and kind of Securities purchasable
upon the exercise of this Warrant.



     (k) Escrow of Warrant Stock. If after any property becomes distributable pursuant to
this Section 4 by reason of the taking of any record of the holders of Common Stock, but prior to
the occurrence of the event for which such record is taken, and the Holder exercises this Warrant,
any shares of Common Stock issuable upon exercise by reason of such adjustment shall be deemed the
last shares of Common Stock for which this Warrant is exercised (notwithstanding any other
provision to the contrary herein) and such shares or other property shall be held in escrow for the
Holder by the Issuer to be issued to the Holder upon and to the extent that the event actually
takes place, upon payment of the current Warrant Price. Notwithstanding any other provision to the
contrary herein, if the event for which such record was taken fails to occur or is rescinded, then
such escrowed shares shall be cancelled by the Issuer and escrowed property returned.



     (l) Adjustment of Terms. In the event that Issuer issues warrants in a Qualified
Financing with warrant price adjustment or other terms more favorable to the holder of such
warrants then the terms set forth in this Warrant, then the terms of this Warrant shall be
automatically deemed to be modified to such more favorable terms, and Issuer shall give the Holder
written notification thereof.



     5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share Number shall be
adjusted pursuant to Section 4 hereof (for purposes of this Section 5, each an “adjustment”), the
Issuer shall cause its Chief Financial Officer to prepare and execute a certificate setting forth,
in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method
by which such adjustment was calculated (including a description of the basis on which the Board
made any determination hereunder), and the Warrant Price and Warrant Share Number after giving
effect to such adjustment, and shall cause copies of such certificate to be delivered to the Holder
of this Warrant promptly after each adjustment. Any dispute between the Issuer and the Holder of
this Warrant with respect to the matters set forth in such certificate may at the option of the
Holder of this Warrant be submitted to the Issuer’s independent, outside accountant. The Issuer
shall use its best efforts to cause the accountant to perform the calculations and notify the
Issuer and the Holder of the results no later than five (5) business days from the time it receives
the disputed calculation. Such accountant’s calculation shall be binding upon all parties absent
manifest error. The reasonable expenses of such accountant in making such determination shall be
paid by the Issuer, in the event the Holder’s calculation was correct, or by the Holder, in the
event the Issuer’s calculation was correct, or equally by the Issuer and the Holder in the event
that neither the Issuer’s or the Holder’s calculation was correct.



13









 





     6. Fractional Shares. No fractional shares of Warrant Stock will be issued in
connection with any exercise hereof, but in lieu of such fractional shares, the Issuer shall make a
cash payment therefor equal in amount to the product of the applicable fraction multiplied by the
Per Share Market Value then in effect.



     7. Ownership Cap and Certain Exercise Restrictions. (a) Notwithstanding anything to
the contrary set forth in this Warrant, at no time may a Holder of this Warrant exercise this
Warrant if the number of shares of Common Stock to be issued pursuant to such exercise would cause
the number of shares of Common Stock owned by the Holder at such time to exceed, when aggregated
with all other shares of Common Stock owned by such Holder at such time, the number of shares of
Common Stock which would result in such Holder beneficially owning (as determined in accordance
with Section 13(d) of the Exchange Act and the rules thereunder) in excess of 4.9% of all of the
Common Stock outstanding at such time; provided, however, that upon the Holder of
this Warrant providing the Issuer with sixty-one (61) days notice (pursuant to Section 13 hereof)
(the “Waiver Notice”) that such Holder would like to waive this Section 7(a) with regard to
any or all shares of Common Stock issuable upon exercise of this Warrant, this Section 7(a) will be
of no force or effect with regard to all or a portion of the Warrant referenced in the Waiver
Notice; provided, further, that this provision shall be of no further force or
effect during the sixty-one (61) days immediately preceding the expiration of the term of this
Warrant.



          (b) Notwithstanding anything to the contrary set forth in this Warrant, at no time may a
Holder of this Warrant exercise this Warrant if the number of shares of Common Stock to be issued
pursuant to such exercise would cause the number of shares of Common Stock owned by the Holder at
such time to exceed, when aggregated with all other shares of Common Stock owned by such Holder at
such time, the number of shares of Common Stock which would result in such Holder beneficially
owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules
thereunder) in excess of 9.9% of all of the Common Stock outstanding at such time;
provided, however, that upon a holder of this Warrant providing the Issuer with a
Waiver Notice that such holder would like to waive this Section 7(b) with regard to any or all
shares of Common Stock issuable upon exercise of this Warrant, this Section 7(b) shall be of no
force or effect with regard to those shares of Warrant Stock referenced in the Waiver Notice;
provided, further, that this provision shall be of no further force or effect
during the sixty-one (61) days immediately preceding the expiration of the term of this Warrant.




     8. Intentionally Omitted.



     9. Definitions. For the purposes of this Warrant, the following terms have the
following meanings:




     “Additional Shares of Common Stock” means all shares of Common Stock issued by
the Issuer after the Original Issue Date, and all shares of Other Common, if any, issued by
the Issuer after the Original Issue Date, except: (i) securities issued pursuant to a bona
fide firm underwritten public offering of the Issuer’s securities, (ii) securities issued
pursuant to the conversion or exercise of convertible or excercisable securities issued or
outstanding on or prior to the date hereof, (iii) the Warrant Stock, (iv) the payment of any
dividends on the Series B Preferred Stock of the Issuer or on the Series C



14









 







Preferred Stock of the Issuer, (v) securities issued (other than for cash) in connection
with a merger, acquisition or consolidation of the Issuer, (vi) securities issued in
connection with strategic license agreements and other partnering arrangements so long as
such issuances are not for the purpose of raising capital, (vii) the issuance of Common
Stock or the issuance or grants of options to purchase Common Stock pursuant to the Issuer’s
stock option plans and employee stock purchase plans outstanding on the date hereof, and
(viii) any warrants issued to the placement agents in connection with this Warrant (and
other similar warrants) in connection with other financial services rendered to Issuer.




     “Articles of Incorporation” means the Articles of Incorporation of the Issuer
as in effect on the Original Issue Date, and as hereafter from time to time amended,
modified, supplemented or restated in accordance with the terms hereof and thereof and
pursuant to applicable law.




     “Board” shall mean the Board of Directors of the Issuer.




     “Capital Stock” means and includes (i) any and all shares, interests,
participations or other equivalents of or interests in (however designated) corporate stock,
including, without limitation, shares of preferred or preference stock, (ii) all partnership
interests (whether general or limited) in any Person which is a partnership, (iii) all
membership interests or limited liability company interests in any limited liability
company, and (iv) all equity or ownership interests in any Person of any other type.




     “Common Stock” means the Common Stock, par value $.0001 per share, of the
Issuer and any other Capital Stock into which such stock may hereafter be changed.




     “Common Stock Equivalent” means any Convertible Security or warrant, option or
other right to subscribe for or purchase any Additional Shares of Common Stock or any
Convertible Security.




     “Governmental Authority” means any governmental, regulatory or self-regulatory
entity, department, body, official, authority, commission, board, agency or instrumentality,
whether federal, state or local, and whether domestic or foreign.




     “Holders” mean the Persons who shall from time to time own any Warrant. The
term “Holder” means one of the Holders.




     “Independent Appraiser” means 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
Issuer) that is regularly engaged in the business of appraising the Capital Stock or assets
of corporations or other entities as going concerns, and which is not affiliated with either
the Issuer or the Holder of any Warrant.




     “Issuer” means Dirt Motor Sports, Inc., a Delaware corporation, and its
successors.



15









 





          “Majority Holders” means at any time the Holders of Warrants exercisable for a
majority of the shares of Warrant Stock issuable under the Warrants at the time outstanding.




          “Nasdaq” means the Nasdaq SmallCap Market.




          “Original Issue Date” means ___, ___.




          “OTC Bulletin Board” means the over-the-counter electronic bulletin board.




          “Other Common” means any other Capital Stock of the Issuer of any class which
shall be authorized at any time after the date of this Warrant (other than Common Stock) and
which shall have the right to participate in the distribution of earnings and assets of the
Issuer without limitation as to amount.




          “Outstanding Common Stock” means, at any given time, the aggregate amount of
outstanding shares of Common Stock, assuming full exercise, conversion or exchange (as
applicable) of all options, warrants and other Securities which are convertible into or
exercisable or exchangeable for, and any right to subscribe for, shares of Common Stock that
are outstanding at such time.




          “Person” means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint venture,
Governmental Authority or other entity of whatever nature.




          “Per Share Market Value” means on any particular date (a) the closing bid price
per share of the Common Stock on such date on Nasdaq or another registered national stock
exchange on which the Common Stock is then listed, or if there is no such price on such
date, then the closing bid price on such exchange or quotation system on the date nearest
preceding such date, or (b) if the Common Stock is not listed then on Nasdaq or any
registered national stock exchange, the closing bid price for a share of Common Stock in the
over-the-counter market, as reported by the OTC Bulletin Board or in the National Quotation
Bureau Incorporated or similar organization or agency succeeding to its functions of
reporting prices) at the close of business on such date, or (c) if the Common Stock is not
then reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or
similar organization or agency succeeding to its functions of reporting prices), then the
average of the “Pink Sheet” quotes for the relevant conversion period, as determined in good
faith by the holder, or (d) if the Common Stock is not then publicly traded the fair market
value of a share of Common Stock as determined by an Independent Appraiser selected in good
faith by the Majority Holders; provided, however, that the Issuer, after
receipt of the determination by such Independent Appraiser, shall have the right to select
an additional Independent Appraiser, in which case, the fair market value shall be equal to
the average of the determinations by each such Independent Appraiser; and provided,
further that all determinations of the Per Share Market Value shall be appropriately
adjusted for any stock dividends, stock splits or other similar transactions during such
period. The determination of fair market value


16









 







 by an Independent Appraiser shall be based upon the fair market value of the Issuer
determined on a going concern basis as between a willing buyer and a willing seller and
taking into account all relevant factors determinative of value, and shall be final and
binding on all parties. In determining the fair market value of any shares of Common Stock,
no consideration shall be given to any restrictions on transfer of the Common Stock imposed
by agreement or by federal or state securities laws, or to the existence or absence of, or
any limitations on, voting rights.




          “Qualified Financing” means an equity or equity linked financing undertaken by
Issuer after the date of this Warrant which raises gross proceeds (excluding the issuance of
any promissory notes) of at least Nine Million dollars (U.S. $9,000,000) for Issuer.




          “Securities” means any debt or equity securities of the Issuer, whether now or
hereafter authorized, any instrument convertible into or exchangeable for Securities or a
Security, and any option, warrant or other right to purchase or acquire any Security.
“Security” means one of the Securities.




          “Securities Act” means the Securities Act of 1933, as amended, or any similar
federal statute then in effect.




          “Subsidiary” means any corporation at least 50% of whose outstanding Voting
Stock shall at the time be owned directly or indirectly by the Issuer or by one or more of
its Subsidiaries, or by the Issuer and one or more of its Subsidiaries.




          “Term” has the meaning specified in Section 1 hereof.




          “Trading Day” means (a) a day on which the Common Stock is traded on Nasdaq, or
(b) if the Common Stock is not listed on Nasdaq, a day on which the Common Stock is traded
on any other registered national stock exchange, or (c) if the Common Stock is not traded on
any other registered national stock exchange, a day on which the Common Stock is traded on
the OTC Bulletin Board, or (d) if the Common Stock is not traded on the OTC Bulletin Board,
a day on which the Common Stock is quoted in the over-the-counter market as reported by the
National Quotation Bureau Incorporated (or any similar organization or agency succeeding its
functions of reporting prices); provided, however, that in the event that
the Common Stock is not listed or quoted as set forth in (a), (b) and (c) hereof, then
Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal
holiday or a day on which banking institutions in the State of New York are authorized or
required by law or other government action to close.




          “Voting Stock” means, as applied to the Capital Stock of any corporation,
Capital Stock of any class or classes (however designated) having ordinary voting power for
the election of a majority of the members of the Board of Directors (or other governing
body) of such corporation, other than Capital Stock having such power only by reason of the
happening of a contingency.




17









 








          “Warrants” means this Warrant, and any other warrants of like tenor issued in
substitution or exchange for any thereof pursuant to the provisions of Section 2(c), 2(d) or
2(e) hereof or of any of such other Warrants.




          “Warrant Price” initially means U.S. $4.50; provided, however, if Issuer issues
any warrants in the Qualified Financing which have a warrant price of less than U.S. $4.50
per share (the “QF Warrant Price Adjustment”), then the Warrant Price shall
automatically be deemed to be such lower warrant price, and Issuer shall give Holder written
notice of such QF Warrant Price Adjustment. In addition, the Warrant Price may be adjusted
from time to time as shall result from the adjustments specified in this Warrant, including
Section 4 hereto.




          “Warrant Share Number” means at any time the aggregate number of shares of
Warrant Stock which may at such time be purchased upon exercise of this Warrant, after
giving effect to all prior adjustments and increases to such number made or required to be
made under the terms hereof.




          “Warrant Stock” means Common Stock issuable upon exercise of any Warrant or
Warrants or otherwise issuable pursuant to any Warrant or Warrants.




     10. Other Notices. In case at any time:




	 	(A)	 	the Issuer shall make any
distributions to the holders of Common Stock; or
	 
	 	(B)	 	the Issuer shall authorize the
granting to all holders of its Common Stock of rights to
subscribe for or purchase any shares of Capital Stock of any
class or other rights; or
	 
	 	(C)	 	there shall be any
reclassification of the Capital Stock of the Issuer; or
	 
	 	(D)	 	there shall be any capital
reorganization by the Issuer; or
	 
	 	(E)	 	there shall be any (i)
consolidation or merger involving the Issuer or (ii) sale,
transfer or other disposition of all or substantially all of the
Issuer’s property, assets or business (except a merger or other
reorganization in which the Issuer shall be the surviving
corporation and its shares of Capital Stock shall continue to be
outstanding and unchanged and except a consolidation, merger,
sale, transfer or other disposition involving a wholly-owned
Subsidiary); or
	 
	 	(F)	 	there shall be a voluntary or
involuntary dissolution, liquidation or winding-up of the Issuer
or any partial




18









 






	 	 	 	liquidation of the Issuer or distribution to holders of
Common Stock;




then, in each of such cases, the Issuer shall give written notice to the Holder of the date on
which (i) the books of the Issuer shall close or a record shall be taken for such dividend,
distribution or subscription rights or (ii) such reorganization, reclassification, consolidation,
merger, disposition, dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock of record shall
participate in such dividend, distribution or subscription rights, or shall be entitled to exchange
their certificates for Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or
winding-up, as the case may be. Such notice shall be given at least twenty (20) days prior to the
record date or effective date for the event specified in such notice.




     11. Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant
may be amended, or compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), by a written instrument or written instruments executed
by the Issuer and the Majority Holders; provided, however, that no such amendment
or waiver shall reduce the Warrant Share Number, increase the Warrant Price, shorten the period
during which this Warrant may be exercised or modify any provision of this Section 11 without the
consent of the Holder of this Warrant.



     12. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY OF ITS PRINCIPLES OF CONFLICTS OF
LAW WHICH WOULD RESULT IN THE APPLICATION OF THE SUBSTANTIVE LAW OF ANOTHER JURISDICTION.



     13. Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earlier of (i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified for notice prior to 5:00 p.m., eastern time,
on a Trading Day, (ii) the Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number specified for notice
later than 5:00 p.m., eastern time, on any date and earlier than 11:59 p.m., eastern time, on such
date, (iii) the Trading Day following the date of mailing, if sent by overnight delivery by
nationally recognized overnight courier service or (iv) actual receipt by the party to whom such
notice is required to be given. The addresses for such communications shall be with respect to the
Holder of this Warrant or of Warrant Stock issued pursuant hereto, addressed to such Holder at its
last known address or facsimile number appearing on the books of the Issuer maintained for such
purposes, or with respect to the Issuer, addressed to:



	 	 	 
	 

	 	Dirt Motor Sports, Inc.
	 

	 	2500 McGee Drive, Suite 147
	 

	 	Norman, Oklahoma 73072
	 

	 	Attention: Paul Kruger and Brian Carter
	 

	 	Tel. No.: (405) 360-5047

	 

	 	Fax No.: (405) 360-5354






19









 






Copies of notices to the Issuer shall be sent to Jackson Walker L.L.P., 2435 N. Central Expressway,
Suite 600, Richardson, Texas, 75080, Attention: Richard F. Dahlson, Telephone No.: (972) 744-2996,
Facsimile No.: (972) 744-2990. Copies of notices to the Holder shall be sent to:
                                                            . Any party hereto may from time to time change its address
for notices by giving at least ten (10) days written notice of such changed address to the other
party hereto.




     14. Warrant Agent. The Issuer may, by written notice to each Holder of this Warrant,
appoint an agent having an office in New York, New York for the purpose of issuing shares of
Warrant Stock on the exercise of this Warrant pursuant to subsection (b) of Section 2 hereof,
exchanging this Warrant pursuant to subsection (d) of Section 2 hereof or replacing this Warrant
pursuant to subsection (d) of Section 3 hereof, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.



     15. Remedies. The Issuer stipulates that the remedies at law of the Holder of this
Warrant in the event of any default or threatened default by the Issuer in the performance of or
compliance with any of the terms of this Warrant are not and will not be adequate and that, to the
fullest extent permitted by law, 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.



     16. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure
to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof
and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall
be enforceable by any such Holder or Holder of Warrant Stock.



     17. Modification and Severability. If, in any action before any court or agency
legally empowered to enforce any provision contained herein, any provision hereof is found to be
unenforceable, then such provision shall be deemed modified to the extent necessary to make it
enforceable by such court or agency. If any such provision is not enforceable as set forth in the
preceding sentence, the unenforceability of such provision shall not affect the other provisions of
this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been
contained herein.



     18. Headings. The headings of the Sections of this Warrant are for convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.



20









 





     IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year first above
written.



	 	 	 	 	 	 	 
	 	 	DIRT MOTOR SPORTS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 







21









 








EXERCISE FORM




DIRT MOTOR SPORTS, INC.



The undersigned                     , pursuant to the provisions of the within Warrant, hereby elects to
purchase ___shares of Common Stock of Dirt Motor Sports, Inc. covered by the within Warrant.




	 	 	 	 	 
	Dated:                                         

	 	Signature
	 	                                                            
	 
	 	 	 	 
	 

	 	Address
	 	                                        
	 
	 	 	 	 
	 

	 	 	 	                                        





Number of shares of Common Stock beneficially owned or deemed beneficially owned by the Holder on
the date of Exercise:                                         




ASSIGNMENT



FOR VALUE RECEIVED,                      hereby sells, assigns and transfers unto                     
the within Warrant and all rights evidenced thereby and does irrevocably constitute and appoint
                    , attorney, to transfer the said Warrant on the books of the within named corporation.




	 	 	 	 	 
	Dated:                                         

	 	Signature
	 	                                                            
	 
	 	 	 	 
	 

	 	Address
	 	                                        
	 
	 	 	 	 
	 

	 	 	 	                                        






PARTIAL ASSIGNMENT



FOR VALUE RECEIVED,                      hereby sells, assigns and transfers unto                     
the right to purchase ___shares of Warrant Stock evidenced by the within Warrant together
with all rights therein, and does irrevocably constitute and appoint                     , attorney,
to transfer that part of the said Warrant on the books of the within named corporation.




	 	 	 	 	 
	Dated:                                         

	 	Signature
	 	                                                            
	 
	 	 	 	 
	 

	 	Address
	 	                                        
	 
	 	 	 	 
	 

	 	 	 	                                        






FOR USE BY THE ISSUER ONLY:



This Warrant No. W-___canceled (or transferred or exchanged) this ___day of                     , ___,
shares of Common Stock issued therefor in the name of                     , Warrant No. W-___issued
for ___shares of Common Stock in the name of                     .





22