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                                                                    EXHIBIT 10.7

NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.

                             STOCK PURCHASE WARRANT

         THIS STOCK PURCHASE WARRANT CERTIFIES THAT, for the agreed upon value
of $10.00 and for other good and valuable consideration, LAZARD FRERES & CO. LLC
or its registered successors and assigns (collectively, the "Holder"), is
entitled to purchase fully paid and nonassessable shares of the $.001 par value
per share common stock (the "Common Stock") of SOURCE MEDIA, INC., a Delaware
corporation (the "Company") at $20.00 per share (the "Exercise Price") all as
set forth herein and as adjusted pursuant to Article 2 of this Warrant, subject
to the provisions and upon the terms and conditions set forth in this Warrant.
This Warrant allows the Holder to purchase 450,000 shares of Common Stock,
subject to adjustment as provided herein, and the shares so subject to purchase
hereunder shall be referred to herein as the "Warrant Shares". In addition to
the representations and warranties of the Company contained in Article 3 of this
Warrant, the Company represents and warrants to the Holder that neither the
issuance of this Warrant nor the performance by the Company of its obligations
hereunder violates or will violate any of the provisions of the Common Stock and
Warrants Purchase Agreement, dated as of July 29, 1999 (the "Purchase
Agreement") between the Company and Insight Interactive, LLC ("Insight"), the
Contribution Agreement dated as of July 29, 1999 ("Contribution Agreement")
among Insight, the Company and NewCo, LLC ("NewCo") and the Operating Agreement
("Operating Agreement") which will be executed and delivered at the Closing of
the Contribution Agreement and which was made and entered into by and between
the Company and Insight, pursuant to which the Company and Insight have agreed
to form, capitalize and thereafter manage NewCo to conduct certain specified
businesses previously conducted separately. Capitalized terms used herein but
not otherwise defined herein shall have the meanings set forth for such terms in
the Purchase Agreement. The amount and kind of securities receivable pursuant to
the rights granted hereunder are subject to adjustment pursuant to the
provisions contained in this Warrant.

         This Warrant is subject to the following provisions:

                                    ARTICLE 1
                                    EXERCISE

         1.1 Method of Exercise. The Holder may exercise this Warrant in whole
or in part at any time and from time to time after the date of issuance up to
and including the fifth anniversary of the date of issuance (the "Expiration
Date"); provided, however, that until (a) April 1, 2004, the Holder may exercise
only such portion of this Warrant that would entitle the Holder to own up to
forty-five percent (45%) of the Common Stock of the Company, on a Fully Diluted
basis and (b) June 24, 2000 the Holder may exercise only such portion of this
Warrant that would entitle the Holder to own up to 24.99% of the

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outstanding Common Stock of the Company. Deferral of the exercise of a portion
of this Warrant shall not affect or limit in any manner the anti-dilution
provisions of Article 2, which shall apply as if this Warrant were exercisable
at any time. Between April 1, 2004 and the Expiration Date, the Holder may
exercise this Warrant in whole or in part without restriction. The Holder may
exercise this Warrant by delivering a duly executed Notice of Exercise in
substantially the form attached as Appendix 1, to the principal office of the
Company. The Holder shall also deliver to the Company a check for the aggregate
Exercise Price for the Warrant Shares being purchased.

         1.2 [Intentionally Omitted]

         1.3 Share Coverage. The number of Warrant Shares for which this Warrant
may be exercised shall be 450,000 shares of Common Stock, subject to adjustment
as provided herein.

         1.4 Fair Market Value. The fair market value of the Warrant Shares for
purposes of Section 2.1.1(a) below shall be the higher of (i) the average
closing price of the Warrant Shares reported for the five (5) Trading Days
immediately before the Holder delivers its Notice of Exercise to the Company, or
the date of the issuance of additional shares under Section 2.1.1(a) below, as
applicable; or (ii) the average closing price of the Warrant Shares reported for
the thirty (30) Trading Days immediately before the Holder delivers its Notice
of Exercise, or the date of the issuance of additional shares under Section
2.1.1(a) below, as applicable. The reported closing price for each day shall be
the reported closing price (and if no sales take place on any day, such day
shall not be a Trading Day), as reported in the principal consolidated or
composite transaction reporting system on the principal national securities
exchange on which such security is listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on the Nasdaq
National Market or, if such security is not quoted on the Nasdaq National
Market, the average of the closing bid and asked prices on such day in the
over-the-counter market as reported by Nasdaq. As used herein, the term "Trading
Day" means a day on which the New York Stock Exchange, each national securities
exchange on which the Warrant Shares is listed and the Nasdaq National Market
are open for business. If the Warrant Shares are not then traded in a public
market, the Board of Directors of the Company shall propose the fair market
value in its reasonable good faith judgment. The foregoing notwithstanding, if
the Holder advises the Board of Directors in writing that the Holder disagrees
with such proposed fair market value, then each of the Company and the Holder
shall select a reputable investment banking firm, and the two firms so selected
shall promptly agree upon a third reputable investment banking firm, and the
three firms shall undertake such valuation. If the valuation of such investment
banking firms is greater than that determined by the Board of Directors, then
all fees and expenses of such investment banking firms shall be paid by the
Company. In all other circumstances, such fees and expenses shall be paid by the
Holder.

         1.5 Delivery of Certificate and New Warrant. In the event of any
exercise of this Warrant, in whole or in part, certificates for the Warrant
Shares so purchased representing the aggregate number of shares specified in the
Notice of Exercise, shall be delivered to the Holder within a reasonable time,
not exceeding seven business days, after this Warrant shall have been so
exercised. If this Warrant shall have been exercised only in part, then, unless
this Warrant has expired, the Company shall, at its expense, at the time of
delivery of said certificates representing the Warrant Shares, deliver to the
Holder a new Warrant representing the Warrant Shares not so exercised. The
Company will pay all taxes and other expenses in connection with the
preparation, execution and delivery of the certificates except that, in the case
such certificates are to be registered in a name or names other than the Holder,
the Holder will pay any and all stock transfer taxes associated with such
transfer.

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         1.6 Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver in lieu of this Warrant, a
new warrant of like tenor.

                                    ARTICLE 2
                        ADJUSTMENT TO THE WARRANT SHARES

         2.1 Antidilution Provisions. The intent of this Article 2 is to insure
appropriate adjustment to the Exercise Price and/or number of Warrant Shares to
be acquired in the event of the exercise of this Warrant, in the event of future
issuances of capital stock or securities into which this Warrant may ultimately
be convertible in the instances described below, to the end that the provisions
set forth herein (including adjustments to the Exercise Price) shall be made to
provide the Holder the right to receive essentially the same proportion of
shares of capital stock (in relation to all shares of capital stock outstanding)
on the date of conversion, redemption or other exchange as the Holder would have
been entitled to had it initially been issued shares of Common Stock on the date
hereof. Simultaneously with each adjustment to the Exercise Price set forth in
this Article 2, an appropriate adjustment in the number of Warrant Shares
obtainable upon the exercise of this Warrant shall be made so that the holder of
this Warrant shall receive the same number and kind of securities and other
property such holder would have been entitled to receive had this Warrant been
exercised and converted into Warrant Shares immediately prior to the event or
occurrence giving rise to the adjustment to the Exercise Price.

             2.1.1 Adjustments for Diluting Issuances.

              (a) In the event the Company shall issue additional shares of
         capital stock without consideration or for a consideration per share
         which is less than both the Exercise Price for the Warrant Shares and
         the fair market value for the Warrant Shares as determined pursuant to
         Section 1.4 above, then and in each such event, the Exercise Price
         shall be reduced, concurrently with such issue of shares, to an amount
         equal to the quotient of: (a) the sum of (i) the number of shares of
         Common Stock outstanding (on a Fully Diluted basis) immediately prior
         to such issuance multiplied by the Exercise Price plus (ii) the
         aggregate consideration received by the Company upon such issuance,
         divided by (b) the number of shares of Common Stock outstanding (on a
         Fully Diluted basis) immediately after such issuance. For purposes of
         this Section 2.1, the consideration received by the Company for the
         issue of any additional shares of capital stock shall be computed as
         follows: (i) insofar as such consideration consists of cash, such
         consideration shall consist of the aggregate amount of cash received by
         the Company excluding amounts paid or payable for accrued interest or
         accrued dividends, and without deduction of any expenses incurred or
         underwriting commissions or concessions paid or allowed by the Company;
         (ii) insofar as such consideration consists of property other than
         cash, such consideration shall be computed at the fair market value
         thereof at the time of such issue, as determined in good faith by the
         Board of Directors of the Company, except where such consideration
         consists of securities, in which case the amount of consideration
         received by the Company shall be the fair market value thereof
         (determined as provided in Section 1.4 hereof) as of the date of
         receipt, but in each such case without deduction therefrom of any
         expenses incurred or any underwriting commissions or concessions paid
         or allowed by the Company in connection therewith. In computing the
         market price of a note or other obligation that is not listed or
         admitted to trading on any securities exchange or quoted in the

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         Nasdaq Stock Market or reported by the National Quotation Bureau, Inc.,
         or a similar reporting organization, the total consideration to be
         received by the Company thereunder (including interest) shall be
         discounted to present value at the prime rate announced or published in
         The Wall Street Journal under the caption "Money Rate" in effect at the
         time the note or obligation is deemed to have been issued; and (iii) in
         the event additional Shares of capital stock are issued together with
         other securities or other assets of the Company for consideration which
         covers both, such consideration shall be the proportion of such
         consideration so received, computed as determined in good faith by the
         Board of Directors of the Company.

              (b) Treatment of Options and Convertible Securities.

                  (i) In the event the Company should ever grant rights to
              subscribe for or purchase, or any options for the purchase of any
              shares of its capital stock or securities convertible into or
              exchangeable for capital stock (such rights and options herein
              referred to as "Options", and such convertible or exchangeable
              securities herein referred to as "Convertible Securities"),
              whether or not such Options or rights to convert or exchange any
              such Convertible Securities are immediately exercisable, and the
              price per share for which capital stock is issuable upon the
              exercise of such Option or upon the conversion or exchange of such
              Convertible Securities shall be less than the Exercise Price in
              effect immediately prior to the time of the granting of such
              Options, then the total maximum number of shares of capital stock
              issuable upon the exercise of such Options or upon the conversion
              or exchange of the total maximum amount of such Convertible
              Securities issuable upon the exercise of such Options shall (as of
              the date of granting of such Options) be deemed to be outstanding
              and to have been issued and sold for such price per share and the
              Exercise Price shall be reduced to the extent required by Section
              2.1.1(a). For purposes of this Section 2.1.1(b)(i), the price per
              share for which such capital stock is issuable shall be determined
              by dividing (x) the total amount, if any, received or receivable
              by the Company as consideration for the granting of such Options,
              plus the minimum aggregate amount of additional consideration
              payable to the Company upon the exercise of such Options, plus, in
              the case of any such Options which relate to Convertible
              Securities, the minimum aggregate amount of additional
              consideration, if any, other than such Convertible Securities,
              payable to the Company upon the conversion or exchange of such
              Convertible Securities, by (y) the total maximum number of shares
              of capital stock issuable upon the exercise of such Options or
              upon the conversion or exchange of all such Convertible Securities
              issuable upon the exercise of such Options. No further adjustments
              of the Exercise Price shall be made upon the actual issue of such
              capital stock or of such Convertible Securities upon the exercise
              of such Options or upon the actual issue of such capital stock
              upon the conversion or exchange of such Convertible Securities.

                  (ii) If at any time the Company shall issue or sell
              Convertible Securities, whether or not the rights to convert or
              exchange such Convertible Securities are immediately exercisable,
              and the price per share for which capital stock is issuable upon
              the conversion or exchange of such Convertible Securities shall be
              less than the Exercise Price in effect immediately prior to the
              time of the issue or sale of such Convertible Securities, then the
              total maximum number of shares of capital stock issuable upon the
              conversion or exchange of all such Convertible Securities shall
              (as of the date of the issue or sale of such Convertible
              Securities) be deemed to be outstanding and to have been

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              issued and sold for such price per share and the Exercise Price
              shall be reduced to the extent required by Section 2.1.1(a),
              provided that (a) except as provided in Section 2.1.1(b)(vi)
              hereof, no further adjustments of the Exercise Price shall be made
              upon the actual issue of such capital stock upon the conversion or
              exchange of such Convertible Securities and (b) if any such issue
              or sale of such Convertible Securities is made upon exercise of
              any Options for which adjustments of the Exercise Price have been
              or are to be made pursuant to other provisions of this Section
              2.1.1, no further adjustment of the Exercise Price shall be made
              by reason of such issue or sale. For purposes of this Section
              2.1.1(b)(ii), the price per share for which capital stock is
              issuable shall be determined by dividing (x) the total amount
              received or receivable by the Company as consideration for the
              issue or sale of such Convertible Securities, plus the minimum
              aggregate amount of additional consideration, if any, other than
              such Convertible Securities, payable to the Company upon the
              conversion or exchange thereof, by (y) the total maximum number of
              shares of capital stock issuable upon the conversion or exchange
              of all such Convertible Securities.

                  (iii) If at any time the Company shall pay a dividend or make
              any other distribution upon the capital stock payable in capital
              stock or Convertible Securities, any capital stock or Convertible
              Securities, as the case may be, issuable in payment of such
              dividend or distribution shall be deemed to have been issued
              without consideration, and the Exercise Price shall be reduced as
              if the Company had subdivided the outstanding shares of capital
              stock into a greater number of shares as provided in Section 2.2
              hereof.

                  (iv) In case at any time the Company shall take a record of
              the holders of capital stock for the purpose of entitling them (a)
              to receive a dividend or other distribution payable in capital
              stock or Convertible Securities, or (b) to subscribe for or
              purchase capital stock or Convertible Securities, then such record
              date shall be deemed to be the date of the issue or sale of such
              capital stock or Convertible Securities.

                  (v) If the purchase price provided for in any Option referred
              to in Section 2.1.1(b)(i) hereof, or the price at which any
              Convertible Securities referred to in Sections 2.1.1(b)(i) or
              (iii) hereof are convertible into or exchangeable for capital
              stock, shall change at any time (whether by reason of provisions
              designed to protect against dilution or otherwise), the Exercise
              Price then in effect hereunder shall forthwith be increased or
              decreased to such Exercise Price as would have obtained had the
              adjustments made upon the issuance of such Options or Convertible
              Securities been made upon the basis of (a) the issuance of the
              number of shares of capital stock theretofore actually delivered
              upon the exercise of such Options or upon the conversion or
              exchange of such Convertible Securities, and the total
              consideration received therefor, and (b) the number of shares of
              capital stock to be issued for the consideration, if any, received
              by the Company therefor and to be received on the basis of such
              changed price.

                  (vi) If any adjustment has been made in the Exercise Price
              because of the issuance of Options or Convertible Securities and
              if any of such Options or rights to convert or exchange such
              Convertible Securities expire or otherwise terminate, then the
              Exercise Price shall be readjusted to eliminate the adjustments
              previously made in

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              connection with the Options or rights to convert or exchange
              Convertible Securities which have expired or terminated.

                  (vii) The number of shares of capital stock outstanding at any
              given time shall not include shares owned or held by or for the
              account of the Company, and the disposition of any such treasury
              shares shall be considered an issue or sale of capital stock.

                  (viii) Anything in Section 2.1.1 hereof to the contrary
              notwithstanding, the Company shall not be required to make any
              adjustment of the Exercise Price in the case of (A) the issuance
              of the Warrants or any other warrant issued to the Holder, (B) the
              issuance of shares of Common Stock upon exercise of the Warrants
              or any other warrant issued to the Holder, (C) the granting of
              stock options by the Company or any of its subsidiaries pursuant
              to the option plans identified on Schedule 4.3 to the Purchase
              Agreement (a copy of which is attached to this Warrant as Appendix
              2), provided that the exercise price of such stock options is at
              least equal to the fair market value of such shares of capital
              stock (as determined by the appropriate plan) on the date such
              stock options are granted, (D) the issuance of shares of capital
              stock upon the exercise of the stock options referred to in clause
              (C) above, and (E) the issuance of shares of capital stock upon
              the exercise, conversion, or exchange of the securities which are
              set forth on Schedule 4.3 of the Purchase Agreement, all of which
              were issued prior to or simultaneously with the date of the
              original issue of this Warrant.

         2.2. Adjustment for Subdivisions and Combinations. In the event at any
time the Company shall, by subdivision, stock split, reverse stock split,
dividend, combination or reclassification of any shares of its capital stock or
otherwise change any of the securities then issuable upon the exercise of this
Warrant into the same or a different number of securities of any class or
classes, this Warrant shall thereafter be exercisable, for the same period as
the remaining duration of the period during which this Warrant is exercisable,
for the same number and kind of securities which the holder hereof would have
received had this Warrant been exercised and converted into Warrant Shares
immediately prior to such change, whether by subdivision, stock split, reverse
stock split, dividend, combination or reclassification of any shares of its
capital stock or otherwise. In the event at any time the Company shall, by
subdivision, dividend, stock split, reclassification or otherwise, change the
outstanding shares of capital stock into a greater number of shares, the
Exercise Price in effect immediately prior to such subdivision shall be
proportionately reduced, and conversely, in case the outstanding shares of
capital stock shall be combined into a smaller number of shares, by reverse
stock split, combination, reclassification or otherwise, the Exercise Price in
effect immediately prior to such combination shall be proportionately increased.
An adjustment made pursuant to this Section 2.2 shall become effective
immediately after the effective date of such subdivision or combination.

         2.3. Adjustment for Dividends and Distributions. If at any time the
Company shall pay a dividend or make a distribution to all holders of capital
stock, as such, which dividend or distribution is payable otherwise than in cash
out of earnings or earned surplus and otherwise than in capital stock,
Convertible Securities, or Options, then thereafter the Holder of this Warrant,
upon the exercise of this Warrant, shall be entitled to receive the number of
shares of Common Stock being purchased upon such exercise and, in addition
thereto and without further payment, the stock and other securities and property
(including cash) which such Holder would have received by way of dividends or
distributions (otherwise than in cash out of earnings or earned surplus or in
capital stock, Convertible Securities, or Options) as

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if continuously, since the date of the original issue of this Warrant, such
Holder (a) had been the record holder of the number of shares of Common Stock
then being purchased, and (b) had retained all dividends and distributions in
stock or other securities (other than capital stock, Convertible Securities, or
Options) which would have been paid in respect of such Common Stock or in
respect of any stock or other securities which would have been paid as dividends
or distributions on such Common Stock.

         2.4 Repurchase on Sale, Merger, or Consolidation of the Company.

             2.4.1 Acquisition. For the purpose of this Warrant, "Acquisition"
means any sale, license, or other disposition of all or substantially all of the
assets of the Company, or any reorganization, consolidation, or merger of the
Company where the holders of the Company's securities before the transaction
beneficially own less than fifty percent (50%) of the outstanding voting
securities of the surviving entity after the transaction.

             2.4.2 Assumption of Warrant. If such Acquisition shall be effected
in such a way that the holders of Common Stock (or any other securities of the
Company then issuable upon the exercise of this Warrant) shall be entitled to
receive stock or other securities or property (including cash) with respect to
or in exchange for Common Stock (or such other securities), then lawful and
adequate provision shall be made whereby the Holder of this Warrant shall
thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions specified in this Warrant, and in lieu of the shares of
Common Stock (or such other securities) immediately theretofore purchasable and
receivable upon the exercise hereof, such stock or other securities or property
(including cash) as may be issuable or payable with respect to or in exchange
for a number of outstanding shares of Common Stock (or such other securities)
equal to the number of shares of Common Stock (or such other securities)
immediately theretofore purchasable and receivable upon the exercise of this
Warrant, had such Acquisition not taken place. In any such case appropriate
provision shall be made with respect to the rights and interests of the Holder
to the end that the provisions hereof (including, without limitation, the
provisions for adjustments of the Exercise Price and of the number of Warrant
Shares purchasable upon exercise hereof) shall thereafter be applicable, as
nearly as reasonably may be, in relation to the stock or other securities or
property thereafter deliverable upon the exercise hereof. In the event of a
consolidation or merger of the Company with or into another corporation or
entity as a result of which a greater or lesser number of shares of common stock
of the surviving corporation or entity are issuable to holders of capital stock
in respect of the number of shares of capital stock outstanding immediately
prior to such consolidation or merger, then the Exercise Price in effect
immediately prior to such consolidation or merger shall be adjusted in the same
manner as though there were a subdivision or combination of the outstanding
shares of capital stock.

         2.5 Reclassification, Exchange or Substitution. Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, the Holder shall be entitled to receive, upon
exercise or conversion of this Warrant, the number and kind of securities and
property that the Holder would have received for the Warrant Shares if this
Warrant had been exercised immediately before such reclassification, exchange,
substitution, or other event. Such an event shall include any automatic
conversion of the outstanding or issuable securities of the Company of the same
class or series as the Warrant Shares to Common Stock pursuant to the terms of
the Company's Certificate of Incorporation upon the closing of a new registered
public offering of the Company's Common Stock. The Company or its successor
shall promptly issue to the Holder a new Warrant for such new securities or
other property. The new Warrant shall provide for adjustments which shall be as
nearly equivalent as may be practicable

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to the adjustments provided for in this Article 2 including, without limitation,
adjustments to the Exercise Price and to the number of securities or property
issuable upon exercise of the new Warrant. The provisions of this Section 2.5
shall similarly apply to successive reclassifications, exchanges, substitutions,
or other events.

         2.6 Record Date Adjustments. In any case in which this Article 2
requires that a downward adjustment of the Exercise Price shall become effective
immediately after a record date for an event, the Company may defer until the
occurrence of such event (a) issuing to the Holder of this Warrant (exercised
after such record date and before the occurrence of such event) the additional
Warrant Shares issuable upon such exercise by reason of the adjustment required
by such event over and above the Warrant Shares issuable upon such exercise
before giving effect to such adjustment and (b) paying to such Holder any amount
in cash in lieu of a fractional share pursuant to Section 2.8 hereof.

         2.7 Minimum Adjustment of Exercise Price. No adjustment of the Exercise
Price shall be made in an amount less than $.05 per share in effect at the time
such adjustment is otherwise required to be made, but any such lesser adjustment
shall be carried forward and shall be made at the time and together with the
next subsequent adjustment which, together with any adjustments so carried
forward, shall amount to not less than $.05 per share. In case at any time the
Company shall issue capital stock by way of dividend on capital stock or
subdivide or combine the outstanding shares of capital stock, said amount of
$.05 per share (as theretofore increased or decreased, if the said amount shall
have been adjusted in accordance with the provisions of this Section 2.7) shall
forthwith be proportionately increased in the case of such a combination or
decreased in the case of such a subdivision or stock dividend so as
appropriately to reflect the same.

         2.8 Fractional Shares. No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Warrant Shares to be
issued shall be rounded down to the nearest whole Share. If a fractional share
interest arises upon any exercise or conversion of the Warrant, the Company
shall eliminate such fractional share interest by paying the Holder an amount
computed by multiplying the fractional interest by the last reported sale price
of the Common Stock on the trading day immediately preceding the date of
exercise.

         2.9 Certificate as to Adjustments. Upon each adjustment of the Exercise
Price, the Company, at its expense, shall promptly compute such adjustment, and
furnish the Holder with a certificate of its Chief Financial Officer setting
forth such adjustment, and the corresponding adjustment in the number of Warrant
shares obtainable upon the exercise of this Warrant, and the facts upon which
such adjustments are based. The Company shall, upon written request, furnish the
Holder a certificate setting forth the Exercise Price in effect upon the date
thereof and the series of adjustments leading to such Exercise Price.

         2.10 Certain Events. If any event occurs of the type contemplated by
the provisions of this Article 2 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Company's Board of Directors shall make an appropriate adjustment in the number
of Warrant Shares obtainable upon exercise of this Warrant and in the Exercise
Price so as to protect the rights of the Holder of this Warrant; provided that
no such adjustment shall decrease the number of Warrant Shares obtainable as
otherwise determined pursuant to this Article 2.

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         2.11 Purchase Rights. If at any time the Company grants, issues or
sells any rights to purchase stock, warrants, securities or other property pro
rata to the record holders of any class of stock (the "Purchase Rights") then
the Holder of this Warrant shall be entitled to obtain, upon the same terms on
which the holders of Common Stock are to receive such Purchase Rights, the
aggregate Purchase Rights which such Holder could have acquired if such Holder
had held the number of Warrant Shares acquirable upon complete exercise of this
Warrant immediately before the date on which a record is taken for the grant,
issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of Common Stock are to be determined for the
grant, issue or sale of such Purchase Rights.

                                    ARTICLE 3
                  REPRESENTATIONS AND COVENANTS OF THE COMPANY

         The Company hereby represents and warrants to the Holder as follows:

         3.1 Title to Warrant Shares. All Warrant Shares which may be issued
upon the exercise of the rights represented by this Warrant, and all securities,
if any, issuable upon conversion of the Warrant Shares, shall, upon issuance be
duly authorized, validly issued, fully paid and nonassessable, and free of any
liens and encumbrances.

         3.2 Reservation of Shares. During the period which this Warrant may be
exercised, the Company will at all times have authorized and reserved for
issuance a sufficient number of shares of Common Stock to cover such exercise.

         3.3 No Impairment. The Company shall not, by amendment of its
Certificate of Incorporation or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue, or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed under this Warrant by the Company, but
shall at all times in good faith assist in carrying out all the provisions of
this Warrant and in taking all such action as may be necessary or appropriate to
protect the Holder's rights under this Warrant against impairment. If the
Company takes any action affecting the Shares or its Common Stock other than as
provided for above that adversely affects the Holder's rights under this
Warrant, then the Company shall make appropriate adjustment to the Exercise
Price and/or the number of Warrant Shares to carry out the intent of Article 2
as set forth in Section 2.1.

         3.4 Notice of Certain Events. If the Company proposes at any time to
(a) declare any dividend or distribution upon its Common Stock, whether in cash,
property, stock or other securities and whether or not a regular cash dividend;
(b) offer for subscription pro rata to the holders of any class or series of
stock any additional shares of stock of any class or series or other rights; (c)
effect any reclassification or recapitalization of Common Stock; or (d) merge or
consolidate with or into any other corporation, or sell, lease, license, or
convey all or substantially all of its assets, or to liquidate, dissolve or wind
up, then, in connection with each such event, the Company shall give the Holder:
(1) at least twenty (20) days prior written notice of the date on which a record
will be taken for such dividend, distribution, or subscription rights (and
specifying the date on which the holders of Common Stock will be entitled
thereto) or for determining rights to vote, if any, in respect of the matters
referred to in (c) and (d) above; and (2) in the case of the matters referred to
in (c) and (d) above at least twenty (20) days prior written notice of the date
when the same will take place (and specifying the date on which the holders of
Common Stock will be

                                        9

<PAGE>   10

entitled to exchange their Common Stock for securities or other property
deliverable upon the occurrence of such event).

         3.5 Registration under the Securities Act of 1933.

             3.5.1 Piggyback Rights. In the event that the Company files a
         registration statement under the Securities Act of 1933, as amended
         (the "Act") which relates to an offering of securities of the Company
         by the Company or any holder of securities (except in connection with
         an offering to or by employees), such registration statement and the
         prospectus included therein shall also, at the written request to the
         Company by the Holder, include and relate to, and meet the requirements
         of the Act with respect to, the public offering of such Warrant Shares
         as the Holder indicates it intends to exercise and offer under the
         registration statement for sale and sell, so as to permit the public
         sale thereof in compliance with the Act, and any related qualifications
         under blue sky laws or other compliance or any underwriting involved
         therein shall also relate thereto. The Company shall use its best
         efforts to effect such registration, any such qualification, any such
         compliance and any such underwriting as soon as practicable. The
         Company shall give prompt written notice to the Holder of its intention
         to file a registration statement under the Act relating to an offering
         of the aforesaid securities of the Company, but in no event less than
         twenty-five (25) days prior to the filing of such registration
         statement, and the written request provided for in the first sentence
         of this Section shall be made by the Holder ten (10) or more days prior
         to the date specified in the notice as the date on which it is intended
         to file such registration statement. Neither the delivery of such
         notice by the Company nor of such request pursuant to this Section
         3.5.1 by the Holder shall in any way obligate the Company to file any
         such registration statement and, notwithstanding the filing of such
         registration statement, the Company may, at any time prior to the
         effective date thereof, determine not to offer the securities to which
         such registration statement relates, without liability to the Holder,
         except that the Company shall pay such expenses as are contemplated to
         be paid by it under Section 3.5.3 and by the Holder pursuant to Section
         3.5.3(d). Provided, that, anything above in this Section 3.5.1 to the
         contrary notwithstanding, the inclusion of Warrant Shares in any such
         registration will require the approval of the underwriters, if any, but
         which approval shall not be unreasonably withheld, and such inclusion
         shall be conditioned upon the provision by the Holder to the Company of
         all information regarding the Holder reasonably required to be included
         in the registration statement under applicable law and the rules and
         regulations promulgated by the Securities and Exchange Commission (the
         "SEC") pursuant to the Act. The "piggy-back" registration rights
         granted hereunder shall terminate five (5) years from the date hereof.

             3.5.2 Demand Registration Rights. (a) In addition, upon written
         notice at any time before the Expiration Date, upon written request
         from a holder or holders of fifty percent (50%) or more of the
         securities issued or issuable upon exercise of this Warrant, the
         Company, as promptly as possible after the receipt of such notice,
         shall file a new registration statement under the Act with respect to
         the Warrant Shares covered by such notice and use its best efforts to
         effect such registration, all qualifications under blue sky laws and
         all other compliance as soon as practicable. Within ten (10) days after
         receiving any such notice, the Company shall give notice to any other
         Holders of the Warrant Shares issued or issuable pursuant to this
         Warrant, advising that the Company is proceeding with such registration
         statement to include therein Warrant Shares of such Holders. The
         Company shall not be obligated to any such other Holder unless such
         other Holder shall accept such offer by notice in writing to the
         Company within ten (10) days thereafter.

                                       10
<PAGE>   11

         The Company shall be required to effect two (2) registrations of
         Warrant Shares pursuant to this Section 3.5.2. The Holder agrees to
         become subject to a customary lock-up agreement, for a reasonable
         period of time, if required by the underwriter of a public offering by
         the Company during the period in which the Holder is entitled to
         registration of the Warrant Shares under this Section 3.5.2; provided,
         however, that the Expiration Date shall be extended by the effective
         period of any such lock-up agreement. The Company may postpone, one
         time, for up to ninety (90) days the registration of Warrant Shares
         pursuant to this Section 3.5.2 if its Board of Directors determines in
         good faith that such registration would have a material adverse effect
         on a significant transaction proposed by the Company; provided,
         however, that the Expiration Date shall be extended by the period of
         any such postponement. The distribution of Warrant Shares covered by
         the request of a Holder pursuant to this Section 3.5.2 shall be
         effected by means of the method of distribution selected by such
         Holder. If such distribution is effected by means of an underwriting,
         the Company shall enter into an underwriting agreement in customary
         form with a managing underwriter of nationally recognized standing
         selected for such underwriting by the Holder and approved by the
         Company, which approval shall not be unreasonably withheld.
         Notwithstanding any other provision of this Section 3.5.2, if the
         managing underwriter advises the Holder in writing that marketing
         factors require limitation of the number of shares to be underwritten,
         then the underwriters may exclude shares requested to be included in
         such registration. The number of shares to be included in the
         registration and underwriting shall be allocated first among the
         Holders who requested registration pursuant to this Section 3.5.2 and
         then among other Holders who have requested registration of securities
         in such registration and underwriting in proportion as nearly as
         practicable to the respective amounts of securities of the Company held
         by such Holders at the time of filing the registration statement. No
         securities excluded from the underwriting by reason of the managing
         underwriter's marketing limitation shall be included in such
         registration. If any Holder disapproves of the terms of the
         underwriting, such Holder may elect to withdraw therefrom by written
         notice to the Company, the managing underwriter and the Holder
         requesting such registration pursuant to this Section 3.5.2 and the
         securities so withdrawn shall also be withdrawn from registration. If
         the distribution of the Warrant Shares is being effected by means of an
         underwriting and if the managing underwriter has not limited the number
         of securities to be underwritten, the Company may include securities
         for its own account in such registration if the managing underwriter so
         agrees and may include securities for the account of holders of
         securities other than Holders of the Warrant Shares issued or issuable
         upon exercise of this Warrant. The inclusion of such securities by the
         Company or such other holders shall be on the same terms as the
         registration of Warrant Shares held by the Holders requesting
         registration pursuant to this Section 3.5.2. In the event that the
         underwriters exclude some of the securities to be registered, the
         securities to be sold for the account of the Company and any other
         holders shall be excluded in their entirety prior to the exclusion of
         any Warrant Shares issued or issuable pursuant to this Warrant.

                  (b) If the Company is a registrant for purposes of the Act
         which is entitled to use Form S-3 (or any successor form to Form S-3)
         to register securities for any registration requested pursuant to
         Section 3.5.2, at the request of a holder pursuant to Section 3.5.2,
         the Company shall use its best efforts to cause the shares to be
         registered on Form S-3.

                  (c) A holder requesting registration pursuant to Section 3.5.2
         shall have the right to cancel a proposed registration pursuant to
         Section 3.5.2 when, in its discretion, market conditions are so
         unfavorable as to be seriously detrimental to an offering pursuant to
         such registration. For

                                       11
<PAGE>   12

         the avoidance of doubt, such cancellation of a registration shall not
         be counted as one of the two (2) registrations pursuant to Section
         3.5.2, subject to the condition that the canceling Holder shall
         promptly reimburse the Company for its expenses reasonably incurred in
         connection with the cancelled registration, unless such registration
         was cancelled after having been deferred, postponed or interrupted by
         the Company pursuant to Section 3.5.2, in which case, such expense
         reimbursement shall not be required.

                  3.5.3 Agreements Related to Registrations. In each instance in
         which pursuant to Sections 3.5.1 and 3.5.2 of this Section, the Company
         shall take any action to permit a public offering or sale or other
         distribution of the Warrant Shares, the Company shall:

                           (a) Supply to the Holders of Warrant Shares intending
                  to make a public distribution of their Warrant Shares a
                  reasonable number of copies of the preliminary, final and
                  other prospectus in conformity with requirements of the Act
                  and the rules and regulations promulgated thereunder and such
                  other documents as the Holders shall reasonably request.

                           (b) In regard to a registration under Section 3.5.2
                  only, cooperate in taking such action as may be necessary to
                  register or qualify the Warrant Shares under such other
                  securities acts or blue sky laws of such jurisdictions as the
                  Holders shall reasonably request and to do any and all other
                  acts and things which may be necessary or advisable to enable
                  the Holders of such Warrant Shares to consummate such proposed
                  sale or other disposition of the Warrant Shares in any such
                  jurisdiction.

                           (c) Keep effective all such registrations under the
                  Act and cooperate in taking such action as may be necessary to
                  facilitate a public sale or other disposition of such Warrant
                  Shares by such Holders.

                           (d) Pay all expenses of any registration under
                  Section 3.5.2. Each registration under Section 3.5.1 shall be
                  at the Company's expense, except for the direct, incremental
                  costs attributable to the "piggy-backed" Warrant Shares, which
                  shall be paid by the Holders thereof. The Company shall not be
                  required to pay any underwriting discount or commission or
                  applicable transfer taxes relating to the disposition of the
                  Warrant Shares.

                           (e) Indemnify and hold harmless each Holder with
                  respect to which registration, qualification or compliance has
                  been effected pursuant to this Agreement and any underwriter,
                  within the meaning of the Act who may purchase from or sell
                  for any Holder any Warrant Shares, and each of their
                  respective officers, directors, partners and such Holder's
                  legal counsel and independent accountants, if any, and such
                  person controlling such persons, within the meaning of the
                  Act, from and against any and all losses, claims, damages,
                  expenses and liabilities (including, but not limited to, legal
                  fees and expenses and any and all expenses whatsoever
                  reasonably incurred in investigating, preparing, defending or
                  settling any claim (including, but not limited to, legal fees
                  and expenses)) arising from or based on (i) any untrue
                  statement (or alleged untrue statement) of

                                       12
<PAGE>   13

                  a material fact contained in any registration statement
                  furnished pursuant to clause (a) of this Section, or any
                  prospectus included therein or any amendment or supplement
                  thereto, (ii) any omission (or alleged omission) to state
                  therein a material fact required to be stated therein or
                  necessary to make the statements therein not misleading
                  (unless such untrue statement (or alleged untrue statement) or
                  omission (or alleged omission) was based upon and in
                  conformity with information furnished in writing, or required
                  to be furnished, to the Company by the Holder or underwriter
                  expressly for use therein), or (iii) any violation by the
                  Company of any rule or regulation promulgated under the Act or
                  any state securities law applicable to the Company and
                  relating to action or inaction by the Company in connection
                  with any such registration, qualification or compliance.

                           (f) Each Holder which has securities included in any
                  registration pursuant to this Agreement shall indemnify and
                  hold harmless the Company and any underwriter, within the
                  meaning of the Act, and each of their respective officers,
                  directors, partners, legal counsel and independent
                  accountants, and each person controlling such persons within
                  the meaning of the Act, from and against any and all losses,
                  claims, damages, expenses and liabilities (including, but not
                  limited to, legal fees and expenses and any and all expenses
                  whatsoever reasonably incurred in investigating, preparing,
                  defending or settling any claim (including, but not limited
                  to, legal fees and expenses)) arising from or based on (i) any
                  untrue statement (or alleged untrue statement) of a material
                  fact contained in any registration statement furnished
                  pursuant to clause (a) of this Section or any prospectus
                  included therein or any amendment or supplement thereto, or
                  (ii) any omission (or alleged omission) to state therein a
                  material fact required to be stated therein or necessary to
                  make the statements therein not misleading, provided, that the
                  indemnity by such Holder shall be limited to liability based
                  upon information furnished in writing, or required to be
                  furnished, to the Company by such Holder expressly for use
                  therein. The indemnity agreement of the Company herein shall
                  not inure to the benefit of any such underwriter (or to the
                  benefit of any person who controls such underwriter) on
                  account of any losses, claims, damages, liabilities (or
                  actions or proceedings in respect thereof) arising from the
                  sale of any of such Warrant Shares by such underwriter to any
                  person if such underwriter failed to send or give a copy of
                  the prospectus furnished pursuant to clause (a) of this
                  Section, to such person with or prior to the written
                  confirmation of the sale involved. The obligation of any
                  Holder pursuant to this Section 3.5.3(f) shall be limited to
                  an amount equal to the net proceeds to such Holder from
                  securities sold in such registration pursuant to this
                  Agreement.

                           (g) Each party entitled to indemnification hereunder
                  (the "Indemnifying Party") shall give notice to the party
                  required to provide indemnification (the "Indemnifying Party")
                  promptly after such Indemnified Party has actual knowledge of
                  any claim as to which indemnity may be sought, and shall
                  permit the Indemnifying Party to assume the defense of any
                  such claim or any litigation resulting therefrom, provided
                  that counsel for the Indemnifying Party, who shall conduct the
                  defense of such claim or litigation, shall be approved by the

                                       13
<PAGE>   14

                  Indemnified Party (whose approval shall not be unreasonably
                  withheld). The Indemnified Party may participate in such
                  defense at such party's expense; provided, however, that the
                  Indemnifying Party shall bear the expense of such defense of
                  the Indemnified Party if representation of both parties by the
                  same counsel would be inappropriate due to actual or potential
                  conflicts of interest. The failure of any Indemnified Party to
                  give notice as provided herein shall not relieve the
                  Indemnifying Party of its obligations under this Agreement,
                  unless and to the extent such failure is prejudicial to the
                  ability of the Indemnifying Party to defend the action. No
                  Indemnifying Party, in the defense of any such claim or
                  litigation shall, except with the consent of each Indemnified
                  Party, consent to entry of any judgment or enter into any
                  settlement which does not include as an unconditional term
                  thereof the giving by the claimant or plaintiff to such
                  Indemnified Party of a release from all liability in respect
                  of such claim or litigation.

                           (h) If the indemnification provided for in paragraphs
                  (e) and (f) above is unavailable or insufficient to hold
                  harmless an Indemnified Party, then each Indemnifying Party
                  shall contribute to the amount paid or payable by such
                  Indemnified Party as a result of the expenses, claims, losses,
                  damages or liabilities (or actions or proceedings in respect
                  thereof) referred to in such paragraphs in such proportion as
                  is appropriate to reflect the relative fault of the Company,
                  on the one hand, and the holders of securities registered
                  pursuant hereto, on the other hand, in connection with the
                  statement or omissions which resulted in such losses, claims,
                  damages, expenses and liabilities, as well as any other
                  relevant equitable considerations. The relative fault shall be
                  determined by reference to, among other things, whether the
                  untrue or alleged untrue statement of a material fact or the
                  omission or alleged omission to state a material fact relates
                  to information supplied by the Company or any such holder and
                  the parties' relative intent, knowledge, access to information
                  and opportunity to correct or prevent such untrue statement or
                  omission. The Company and the Holder agree that it would not
                  be just and equitable if contributions pursuant to this
                  paragraph (h) were to be determined by pro rata allocation or
                  by any other method of allocation which does not take account
                  of the equitable consideration referred to in this paragraph.
                  No person guilty of fraudulent misrepresentation (within the
                  meaning of Section 11(f) of the Act) shall be entitled to
                  contribution from any person who was not guilty of such
                  fraudulent misrepresentation.

                           (i) In addition, in connection with any registration
                  requested pursuant hereto, the Company shall:

                                    (1) prepare and file with the SEC pursuant
                           to the Act such amendments and supplements to such
                           registration statement and prospectus included
                           therein as may be necessary to effect and maintain
                           the effectiveness of such registration statement for
                           a period of 180 days or such longer period as may be
                           required in order to complete the distribution of the
                           securities covered thereby and furnish to the Holders
                           of such securities copies of any such supplement or
                           amendment prior to it being used and/or filed with
                           the SEC and comply with the

                                       14
<PAGE>   15

                           provisions of the Act with respect to the disposition
                           of all securities to be included in such registration
                           statement.

                                    (2) provide the Holders, any underwriters in
                           connection therewith, one counsel for such
                           underwriters and one counsel for the Holders the
                           opportunity to participate in the preparation of such
                           registration statement and each amendment and
                           supplement thereto.

                                    (3) for a reasonable period prior to the
                           filing of the registration statement and throughout
                           the period specified in paragraph (1) above, make
                           available for inspection by the parties specified in
                           paragraph (2) above such financial and other
                           information and books and records of the Company, and
                           cause the officers, directors, employees and
                           representatives of the Company to respond to such
                           inquiries as shall be reasonably necessary to conduct
                           a reasonable investigation of the Company within the
                           meaning of the Act.

                                    (4) promptly notify the holders of
                           securities included in such registration statement
                           and the managing underwriter in connection therewith
                           (and confirm such advice in writing) (A) when such
                           registration statement or the prospectus included
                           therein or any prospectus amendment or supplement or
                           post- effective amendment has been filed, and, with
                           respect to such registration statement or any
                           post-effective amendment, when the same has become
                           effective, (B) of any comments by the SEC and by the
                           blue sky or securities commissioner or regulator of
                           any state with respect thereto or any request by the
                           SEC for amendments or supplements to such
                           registration statement or the prospectus or for
                           additional information, (C) of the issuance by the
                           SEC of any stop order suspending the effectiveness of
                           such registration statement or the initiation of any
                           proceedings for that purpose, (D) of the receipt by
                           the Company of any notification with respect to the
                           suspension of the qualification of the securities for
                           sale in any jurisdiction or the initiation of any
                           proceeding for such purpose, or (E) if it shall be
                           the case, at any time when a prospectus is required
                           to be delivered under the Act, that such registration
                           statement, prospectus, or any document incorporated
                           by reference, in any of the foregoing contains an
                           untrue statement of a material fact or omits to state
                           a material fact required to be stated therein or
                           necessary to make the statements therein not
                           misleading in light of the circumstances then
                           existing, in which case such Holders of securities
                           covered by such registration statement shall suspend
                           sales of such securities until they have been advised
                           by the Company that an appropriate prospectus
                           amendment or supplement or post-effective amendment
                           has been filed; provided, however, that in such
                           instance the Company shall use its best efforts to
                           promptly file such prospectus amendment or supplement
                           or post-effective amendment and the period during
                           which such holders shall be so required to suspend
                           sales hereunder shall not exceed 30 days.

                                    (5) use its best efforts to obtain the
                           withdrawal of any order suspending the effectiveness
                           of such registration statement or any post-effective
                           amendment thereto at the earliest practicable date.

                                       15
<PAGE>   16

                                    (6) enter into one or more underwriting
                           agreements, engagement letters, agency agreements,
                           "best efforts" underwriting agreements, lock-up
                           agreements or similar agreements, as appropriate, and
                           take such other actions in connection therewith as
                           the Holders of securities registered pursuant hereto
                           shall reasonably request in order to expedite or
                           facilitate the disposition of such securities.

                                    (7) whether or not an agreement of the type
                           referred to in the preceding paragraph is entered
                           into and whether or not any portion of the offering
                           contemplated by such registration statement is an
                           underwritten offering, (A) make such representations
                           and warranties to the Holders of securities
                           registered pursuant hereto and any underwriters
                           thereof, in form, substance and scope as are
                           customarily made in connection with any offering of
                           equity securities pursuant to any appropriate
                           agreement and/or to a registration statement filed on
                           the form applicable to such registration statement,
                           (B) obtain an opinion of counsel to the Company in
                           customary form and covering such matters of the type
                           customarily covered by such an opinion as the
                           managing underwriters and Holders of securities
                           registered pursuant hereto may reasonably request,
                           (C) obtain a "cold" comfort letter or letters from
                           the independent certified public accountants of the
                           Company addressed to the Holders and the
                           underwriters, if any, dated the effective date of
                           such registration statement , the effective date of
                           any prospectus supplement to the prospectus included
                           in such registration statement or post-effective
                           amendment to such registration statement and the date
                           of any consummation of the sale of securities
                           pursuant hereto, such letter or letters to be in
                           customary form and covering such matters of the type
                           customarily covered by letters of such type, (D)
                           deliver such documents and certificates as may
                           reasonably be requested by the holders of securities
                           covered by such registration statement and the
                           managing underwriter, if any, and (E) undertake such
                           obligations relating to expense reimbursement,
                           indemnification and contribution as are provided
                           herein.

                                    (8) otherwise use its best efforts to comply
                           with all applicable rules and regulations of the SEC
                           and otherwise take all actions as may reasonably be
                           necessary to accomplish the intentions and purposes
                           of this Section 3.5.

         3.6 Additional Covenants. The Company and Holder understand that the
possibility exists that in connection with the exercise (including certain
partial exercises) of this Warrant, each of the Company and Holder may be
required to make certain filings under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 ("HSR"). The Company covenants that it shall file with
the Federal Trade Commission and the Department of Justice the notification
form, together with all necessary materials and information, to attempt to
secure the expiration or termination of all applicable waiting period(s)
relating to any or all exercises of the Warrant hereunder as required on its
part under HSR (each an "HSR Warrant Consent"), in the event the Company is
notified by the Holder that the Holder has been advised by its counsel of the
necessity of making such filings. The Company agrees and covenants that it shall
use good faith commercially reasonable efforts to obtain the HSR Warrant Consent
to allow the Holder to exercise the Warrant, and shall inform the Holder of all
material developments in the Company's efforts to obtain the HSR Warrant
Consent, and that simultaneously with the transmittal to third parties or to
governmental

                                       16
<PAGE>   17

agencies, it shall provide the Holder with copies of all correspondence, filings
or other written documentation related to efforts to obtain the HSR Warrant
Consent. If, notwithstanding the Company's satisfaction of its obligations
above, the Company fails to obtain the HSR Warrant Consent, then the Company
shall issue Warrant Shares in the maximum number of shares permissible without
obtaining HSR consent and in lieu of issuing the remaining Warrant Shares in
Common Stock (meaning those that cannot be issued without HSR Consent), the
Company shall issue an equivalent number of shares of a new class of non-voting
common stock of the Company ("Non-Voting Stock") which shall be identical in all
respects to the Common Stock, except that shares of Non-Voting Stock shall not
have the right to vote on any matters presented to the Company's stockholders,
unless otherwise required by law; and by their terms the Non-Voting Stock shall
automatically, without notice or any other further action on the part of either
the Company or the Holder, be converted into shares of Common Stock if they are
transferred by the Holder. Thus, if HSR Warrant Consent shall not have been
obtained, the Holder shall continue to have the right to exercise this Warrant,
as otherwise allowed in accordance with the terms hereof; provided, that upon
such exercise, in lieu of receiving Warrant Shares, the Holder shall receive an
equal number of shares of Non-Voting Stock, to the extent of the affected
Warrant Shares (i.e., if a portion of the Warrant Shares can then be issued
without HSR Warrant Consent, the Non-Voting Stock shall be issued only with
respect to the remainder of the Warrant Shares then exercised as evidenced by
this Warrant). The Amendment of the Restated Certificate of Incorporation of the
Company adopted pursuant to Section 3.4 of the Purchase Agreement and which is
attached thereto as Exhibit B-1 authorized a number of shares of Non-Voting
Stock equal to or greater than the number of Warrant Shares.

         The intent of this Section 3.6 is to place the Holder in the position
most nearly identical to the position that the Holder would have been in upon
such exercise if either the HSR Warrant Consent was not necessary or had been
obtained. The Company covenants that, at the cost and expense of the Holder, it
will use commercially reasonable efforts and continue to take all reasonable
steps to attempt to secure for the Holder the Warrant Shares or equivalents
which deliver to the Holder the voting rights and economic benefits incident to
the shares of Common Stock, which efforts shall include, but not be limited to,
appealing any decision of the Federal Trade Commission and/or Justice Department
which denies consent to the exercise in question if, in the opinion of counsel
to the Holder, there is a reasonable basis for such appeal. In the event the
Company is unable to issue the Non-Voting Stock as contemplated herein, the
Company covenants that it will use commercially reasonable efforts to secure for
the Holder the benefits set forth herein.

                                    ARTICLE 4
                                  MISCELLANEOUS

         4.1 Term. This Warrant is exercisable, in whole or in part, at any time
and from time to time on or before the Expiration Date set forth above.

         4.2 Legends. This Warrant shall be imprinted with a legend in
substantially the following form:

NEITHER THIS SECURITY NOR THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF
UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT
REQUIRED.

                                       17

<PAGE>   18

         4.3 Compliance with Securities Laws on Transfer. This Warrant may not
be transferred or assigned by the Company. This Warrant may not be transferred
or assigned by the Holder in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, as reasonably
requested by the Company). The Company shall not require the Holder to provide
an opinion of counsel if the transfer is to (a) an Affiliate of the Holder; (b)
the respective successors of the Holder in a merger or consolidation; (c) the
purchaser of all or substantially all of the assets of Holder; (d) the
shareholders of the Holder in the event the Holder is liquidated or dissolved;
or (e) any other person or entity with respect to whom such transfer has been
approved by the Company. If requested by the Company, and if the transfer is
other than a circumstance described above, the Holder shall provide a reasonable
opinion of counsel in connection with the transfer of the Warrant Shares
pursuant to Rule 144.

         4.4 Transfer Procedure. Subject to the provisions of Section 4.3, the
Holder may transfer all or part of this Warrant or the Warrant Shares issuable
upon exercise of this Warrant (or the securities issuable, directly or
indirectly, upon conversion of the Warrant Shares, if any).

         4.5 Notices. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at the applicable address set forth in Appendix 3 or as may have been
thereafter furnished to the Company or the Holder, as the case may be, in
writing by the Company or such the Holder from time to time.

         4.6 Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.

         4.7 Attorneys Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorney's fees.

         4.8 Governing Law; Jurisdiction and Venue. This Warrant shall be
governed by, construed and enforced in accordance with the internal laws of the
State of Delaware, excluding the conflict of laws provisions thereof that would
otherwise require the application of the law of any other jurisdiction. The
Company acknowledges and agrees that the state and federal courts sitting in the
State of Delaware shall have jurisdiction in any matter arising out of this
Warrant, and the Company hereby consents to such jurisdiction and agrees that
the venue of any such matter shall also be proper in such state and federal
courts sitting in the State of Delaware.

         Dated November 17, 1999

                                              SOURCE MEDIA, INC.

                                              By: /s/ Stephen W. Palley
                                                  ------------------------------
                                                  Name:   Stephen W. Palley
                                                  Title:  President and Chief
                                                          Executive Officer

                                       18<PAGE>   1
                                                                  EXHIBIT 10.15

                                    EMPLOYMENT AGREEMENT, dated as of June 17,
                                    1999, by and between IT NETWORK, INC., a
                                    Delaware corporation ("Company"), and
                                    HOWARD GROSS (the "Employee").

     Company desires to engage Employee to perform services for Company, and
Employee desires to perform such services, on the terms and conditions set forth
below:

     NOW, THEREFORE, the parties agree as follows:

     1. EMPLOYMENT. The Company hereby employs Employee as its President and
Chief Operating Officer, and Employee hereby accepts such employment, upon the
terms and conditions hereinafter set forth.

     2. TERM. The term (the "Term") of employment of Employee pursuant to this
Agreement shall commence on the date hereof and shall terminate on the second
anniversary of the date hereof. The Term shall automatically be renewed for
successive one year periods unless either party gives the other written notice
to the contrary at least 30 days prior to the end of the Term or any such
renewal thereof.

     3. DUTIES AND SERVICES. Employee shall devote his full time and best
efforts to the business and affairs of the Company, and perform, in a competent
manner, such executive and managerial functions and duties commensurate with his
position as President and Chief Operating Officer of the Company, as the Board
of Directors of the Company (the "Board") may reasonably prescribe from time to
time. Such functions and duties shall include responsibility for and the
authority to make all personnel decisions for the Company, subject to approval
of the Chief Executive Officer of Source Media, Inc., the ultimate parent
company of the Company ("Source Media"), or the Board. The Employee shall report
directly to the Chief Executive Officer of Source Media and the Board. Employee
agrees to serve as a member of the Board if elected or appointed and to serve as
a director and officer of any corporation which is a subsidiary of the Company
if elected by the stockholders or the board of directors of such subsidiary. The
parties acknowledge that it is anticipated that the Employee will spend Monday
through Thursday of each week at the Company's offices in Dallas, Texas until
approximately four months from the date hereof. Thereafter, the Employee may
reduce the time spent at the Company's principal place of business by half if
reasonably practical to do so. The Company will not require Employee to relocate
his home from Acton, MA.

                                        1

<PAGE>   2

     4. COMPENSATION.

         A. BASE SALARY. For all services to be rendered by Employee hereunder,
the Company shall pay Employee an annual base salary of $180,000. The Company
shall pay Employee's salary in accordance with the Company's standard payroll
practices as in effect from time to time, with appropriate deductions required
by applicable laws, rules and regulations.

         B. DISCRETIONARY BONUS. On an annual basis, the Board shall consider a
bonus payment to Employee based on his performance, and the Company's results of
operations during each calendar year or portion thereof, during his employment
with the Company. The total bonus shall be up to twenty-five percent (25%) of
the Employee's then annual base salary. Such annual bonus shall be based equally
upon Employee's performance and upon the achievement of certain amounts of the
Company's earnings before interest, taxes, depreciation and amortization as
agreed to in writing between the Employee and the Company in advance of each
year. The timing of the bonus payment shall be in the sole and absolute
discretion of the Board of Directors.

         C. STOCK OPTION PARTICIPATION. Employee shall receive a ten-year option
to purchase 125,000 shares of the common stock, par value $.001 per share, of
Source Media, Inc., the ultimate parent company of the Company, pursuant to the
Stock Option Agreement in the form attached hereto as Exhibit A. Additional
stock options may be granted by the board of directors of Source Media from time
to time.

     5. EXPENSES. The Company shall reimburse Employee for all reasonable,
ordinary and necessary expenses incurred on behalf of the Company by Employee.
The Company acknowledges that such expenses may include, without limitation,
reasonable costs associated with (A) travel to and from the Company's offices in
Dallas, Texas, (B) operating costs of Employee's office in Acton, MA, generally
consisting of expenses related to telephone line and ISP access charges,
operating supplies and a cellular phone plan, (C) the apartment furnished to
Employee by the Company pursuant to Section 6(B) including the cost of utilities
and a cleaning service, (D) first class upgrade stickers for business air
travel, (E) automobile expenses in and around Dallas, Texas and (F) meal
expenses not to exceed the lesser of the amount set forth in the Company's
guidelines or $75.00 per week. Employee shall submit to the Company an expense
report and receipts or other verification of expenses to be reimbursed in
accordance with the Company's standard policies.

     6. BENEFITS.

         A. INSURANCE AND RETIREMENT PLANS. Employee shall be entitled to such
insurance and retirement plan benefits as are generally available to other
senior management employees of the Company, pursuant to Company policy in effect
from time to time, such as health insurance, disability and life insurance, and
the right to participate in any retirement plans maintained by the Company. The
Employee may, in lieu of participating in the Company's PPO medical plan, elect
reimbursement by the Company for the cost of a disability policy (or other

                                        2
<PAGE>   3

benefits Employee may choose) in an amount not to exceed the lesser of (i) the
full cost to the Company of family coverage under the Company's PPO medical plan
and (ii) $10,000.

         B. ACCOMMODATIONS. The Company shall rent during the Term a furnished
apartment for the Employee in the Dallas, Texas area. Such apartment shall be
selected by the Employee in his reasonable discretion subject to approval by the
Chief Executive Officer of Source Media or the Board.

     7. VACATION AND PERSONAL DAYS. Employee shall be entitled to twenty (20)
business days of paid vacation during each calendar year (pro-rated for periods
shorter than a calendar year). Vacation days shall be taken in accordance with
the Company's published guidelines.

     8. TERMINATION PROVISIONS.

         A. TERMINATION FOR CAUSE. Notwithstanding the provisions of Section 2
above, the Company, on two days prior written notice, may terminate the
employment of Employee for any of the following reasons (for "cause"), without
the payment of any compensation to Employee, except accrued salary and vacation
pay due for the period prior to the date of termination of employment:

           (i) Employee shall be convicted of a felony;

           (ii) Commission of theft from or fraud against the Company or any
willful misconduct by the Employee that is materially injurious to the financial
condition or business reputation of the Company, including by reason of material
breach by the Employee of the provisions of this Agreement.

         B. TERMINATION BY COMPANY OTHER THAN FOR CAUSE, DEATH OR DISABILITY.

           (i) If the employment of Employee is terminated by the Company other
than for cause, death or disability, the Company shall pay to Employee as
severance compensation, in equal monthly installments, (a) the base salary
payments that Employee would have earned if he had continued his employment
until the end of the initial Term, and (b) an amount equal to any accrued and
unpaid vacation days on the date of termination of employment. Such payments
shall cease in the event Employee obtains other employment at compensation
greater than or equal to Employee's compensation (including bonuses) from the
Company, following termination of employment. In the event Employee obtains
other employment at lesser compensation than specified above, then the Company
shall pay Employee the difference between said compensation and the compensation
otherwise payable under this section.

           (ii) Until the date Employee obtains other employment and receives
activated coverage as specified below, or the end of the Term, whichever occurs
first, the Company

                                        3

<PAGE>   4

will continue life, medical, dental and disability coverage substantially
identical to the coverage maintained by the Company for Employee and his
dependents prior to termination of his employment, except to the extent such
coverage may be changed in its application to all Company employees on a
nondiscriminatory basis.

         C. TERMINATION ON ACCOUNT OF DISABILITY OR DEATH.

           (i) In the event Employee shall, during the term of this Agreement,
become physically or mentally disabled so that he is unable, or can reasonably
be expected to be unable, to perform his duties hereunder for a period of
seventy-five (75) consecutive days, or ninety (90) non-consecutive days within
any twelve (12) month period, the Company shall have the right to terminate
Employee's employment, provided that (a) the Company provides the Employee with
not less than five (5) days prior written notice of the termination of his
employment and (b) the Company makes the payments to Employee referred to in
clause (ii) below. Any determination of disability shall be made by a physician
selected by the Company and reasonably acceptable to the Employee.

           (ii) In the event the Company terminates the Employee's employment
for disability as set forth in clause (i) above ("Disability Termination"),
Employee shall be entitled to receive, in monthly installments, the base salary
Employee would have received in the following six months had his employment
continued for six months past the date of Disability Termination less any
amounts Employee receives from insurance payments under any Company-provided
insurance plan on account of such disability. All payments made pursuant to this
paragraph shall be made in accordance with the Company's standard payroll
practices as in effect from time to time, with appropriate deductions required
by applicable laws, rules and regulations. In addition, the Company, at its
expense, for a period of six months following the date of Disability
Termination, will continue medical and dental insurance coverage substantially
identical to the coverage maintained by the Company for Employee and his
dependents prior to termination of employment, except to the extent such
coverage may be changed in its application to all Company employees on a
non-discriminatory basis.

           (iii) In the event of the death of Employee, the Company shall pay
the estate of the Employee or his legal representative the accrued salary and
vacation pay due for the period prior to the date of Employee's death.

         D. TERMINATION BY THE EMPLOYEE.

           (i) Notwithstanding the provisions of Section 2 above, the Employee
will be considered to have resigned his employment for "good reason" if the
Company, without the express written consent of the Employee, materially
breaches this Agreement.

           (ii) In the event that the Employee resigns from his employment for
good reason, the Company shall be obligated to provide the Employee with the
severance payments and

                                        4
<PAGE>   5

insurance coverage as required if the Company had terminated the Employee other
than for cause pursuant to Section 8(B) above.

           (iii) In the event that the Employee resigns from his employment
without good reason, the Company shall be obligated to provide the Employee with
the payments as required if the Company had terminated the Employee for cause
pursuant to Section 8(A) above.

     9. REPRESENTATIONS AND WARRANTIES. Employee represents and warrants that
Employee is not subject to or a party to any agreement, contract, covenant,
order or other restriction which in any way prohibits, restricts or impairs
Employee's ability to enter into this Agreement and carry out his duties and
obligations hereunder. Each party hereto represents and warrants to the other
that (A) it has the full legal right and power and all authority and approvals
required to enter into, execute and deliver this Agreement and to perform fully
all of his or its obligations hereunder; and (B) this Agreement has been duly
executed and delivered by it and constitutes a valid and binding obligation of
such party, enforceable in accordance with its terms.

     10. NON-COMPETITION AND SECRECY.

         A. NO COMPETING EMPLOYMENT. For so long as Employee is employed by the
Company and for a period of the lesser of (i) twelve (12) months after
termination of employment and (ii) the expiration of the Term, Employee shall
not, directly or indirectly, own an interest in, manage, operate, join, control,
lend money, or render financial or other assistance to or participate in or be
connected with, as an officer, employee, partner, stockholder, consultant or in
a similar capacity, any sole proprietorship, partnership, firm, corporation or
other business organization or entity that competes with the Company in any
business in which it is engaged during the Term or at the time of the Employee's
termination; provided, however, that nothing in this Section 10(A) shall
prohibit Employee from (i) making a non-controlling and passive investment in a
corporation or other entity whose shares are publicly traded or (ii) engaging in
any activity referred to above in any geographic area in which the Company is
not engaged in business during the Term or at the time of the Employee's
termination. The foregoing restriction shall not apply in the event that the
Employee is terminated without cause or resigns his employment for good reason.

         B. NO INTERFERENCE. For the period ending twelve (12) months after the
later of (i) the termination of the Employee's employment and (ii) the
expiration of the Term, Employee shall not, whether for his own account or for
the account of any other individual, partnership, firm, corporation or other
business organization (other than the Company), intentionally solicit, endeavor
to entice away from the Company, or otherwise interfere with the relationship of
the Company with, any person who is employed by the Company at the time of the
termination of the Employee's employment.

         C. SECRECY. Employee recognizes that the services to be performed by
him hereunder are special, unique and extraordinary in that, by reason of his
employment hereunder, he may acquire confidential information and trade secrets
concerning the operation of the Company or

                                        5
<PAGE>   6

any affiliate thereof, the use or disclosure of which could cause the Company
substantial loss and damages which could not be readily calculated and for which
no remedy at law would be adequate. Accordingly, Employee covenants and agrees
with the Company that he will not at any time, except in performance of
Employee's obligations to the Company hereunder or with the prior written
consent of the Company, directly or indirectly, disclose any secret or
confidential information that he may learn or has learned by reason of his
association with the Company. The term "confidential information" includes,
without limitation, information not previously disclosed to the public or to the
trade with respect to the products, facilities, applications and methods, trade
secrets and other intellectual property, systems, procedures, manuals,
confidential reports, product price lists, customer lists, technical
information, financial information (including the revenues, costs or profits
associated with any of its products), business plans, prospects or opportunities
but shall exclude any information already in the public domain. Notwithstanding
anything to the contrary herein contained, Employee's obligation to maintain the
secrecy and confidentiality of the confidential information under this Section
10 shall not apply to any such confidential information which is disclosed
through any means other than as a result of any act by Employee constituting a
breach of this Agreement or which is required to be disclosed under applicable
law.

         D. EXCLUSIVE PROPERTY. Employee hereby agrees to keep all such records
in connection with Employee's employment as the Company may from time to time
direct, and all such records shall be the sole and exclusive property of the
Company. Upon termination of the Employee's employment, the Employee shall
return to the Company all confidential and/or proprietary information that
exists in written or other physical form (and all copies thereof) under the
Employee's control.

         E. INJUNCTIVE RELIEF. Without intending to limit the remedies available
to the Company, Employee acknowledges that a breach of any of the covenants
contained in this Section 10 may result in material irreparable injury to the
Company for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach or threat thereof, the Company shall be entitled to seek to
obtain a temporary restraining order and/or a preliminary injunction restraining
Employee from engaging in activities prohibited by this Section 10 or such other
relief as may be required to specifically enforce any of the covenants in this
Section 10.

     11. INDEMNIFICATION. The Company shall indemnify the Employee and hold the
Employee harmless from and against any claim, loss, damages, expense, liability
or cause of a action (whether now pending or subsequently commenced), including,
without limitation, liability in connection with suits by shareholders,
debtholders, prospective joint venturers or strategic partners, or current or
former employees, arising from or out of the Employee's consulting work for the
Company prior to the date hereof and during the term of the Employee's
employment pursuant to this Agreement, to the maximum extent permitted by
applicable law and the Company's charter and bylaws provided that such
activities were undertaken in good faith and for the benefit of the Company. If
for any reason the foregoing indemnification is unavailable or insufficient to
hold the Employee harmless, then the Company shall contribute to the amount paid
or payable by the

                                        6
<PAGE>   7

Employee as a result of such claim, loss, damages, expense, liability or cause
of action in such proportion as is equitable.

     12. SECTION HEADINGS. The titles to the Sections of this Agreement are
solely for the convenience of the parties and shall not be used to explain,
modify, simplify, or aid in the interpretations of the provisions of this
Agreement.

     13. NOTICES. All notices, demands and requests provided or permitted to be
given pursuant to this Agreement, shall be given in writing, sent by certified
mail, return receipt requested, and addressed as follows or to such other
address so designated in the appropriate manner by the parties. All notices
shall be deemed effective when mailed.

<TABLE>

<S>                                 <C>
         Company:          IT Network, Inc.
                           c/o Source Media, Inc.
                           5400 LBJ Parkway
                           Suite 680
                           Dallas, Texas 75240
                           Attention:  Board of Directors

                           With a copy to:

                           Robert L. Winikoff, Esq.
                           Cooperman Levitt Winikoff Lester & Newman, P.C.
                           800 Third Avenue
                           New York, New York 10022

         Employee:         Howard Gross
                           5 Duston Lane
                           Acton, MA 01720
</TABLE>

     14. ASSIGNMENT AND ASSUMPTION. The rights of each party under this
Agreement are personal to that party and may not be assigned, delegated or
transferred to any other person, firm, corporation, or other entity without the
prior written consent of the other party, except that the Company may transfer
its rights under this Agreement to any affiliate or other entity which succeeds,
by contract or operation of law, to all or substantially all of the business of
the Company and agrees in writing to assume the Company's obligations under this
Agreement, and provided such transfer does not materially change the provisions
of section 10 of this Agreement.

     15. GOVERNING LAW. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of New York without giving
effect to the conflicts of law principles of the laws of said state. The Company
shall reimburse the Employee for all reasonable

                                        7

<PAGE>   8

fees and disbursements incurred by the Employee in connection with any dispute
over the enforcement of the Employee's rights under this Agreement, but only if
the Employee substantially prevails in such dispute.

     16. ENTIRE AGREEMENT. This Agreement, and the stock option agreement
evidencing the stock option referred to in Section 4(C), shall constitute the
entire agreement between the parties and any prior written or oral understanding
or representation of any kind, or any oral communications shall not be binding
upon either party except to the extent incorporated in this Agreement. This
Agreement supersedes any and all prior agreements between the parties.

     17. MODIFICATION OF AGREEMENT. This Agreement can be modified only in
writing and shall be binding only if executed with and under the same formality
by the parties hereto or their duly authorized representatives.

     18. NO WAIVER. The failure of either party to this Agreement to insist upon
the performance of any of the terms and conditions of this Agreement, or the
waiver of any breach of any of the terms and conditions of this Agreement, shall
not be construed as thereafter waiving any such terms and conditions, but each
same shall continue and remain in full force and effect as if no such
forbearance or waiver had occurred.

     19. EFFECT OF PARTIAL INVALIDITY. The invalidity or unenforceability of any
provision or covenant of this Agreement shall not be deemed to affect the
validity or enforceability of any other provision or covenant. In the event that
any provision or covenant of this Agreement is held invalid or unenforceable,
the same shall be deemed automatically modified to the minimum extent necessary
to make such provision or covenant enforceable and the parties agree that the
remaining provisions shall be deemed to be and to remain in full force and
effect.

     20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts and all counterparts so executed shall constitute one and the same
agreement.

                                        8

<PAGE>   9

     IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.

                                  IT NETWORK, INC.

                                  By: /s/ Stephen W. Palley
                                     ----------------------
                                      Name:  Stephen W. Palley
                                      Title: Chief Executive Officer

                                      /s/ Howard Gross
                                      ---------------------
                                          Howard Gross

                                        9

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