Warrant To Purchase Series D Convertible Preferred Shares

Exhibit 4.03


THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS, OR THE ISRAELI SECURITIES LAW 1968. NEITHER THE WARRANTS NOR SUCH SHARES MAY BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.


VOID AFTER 5:00 P.M., ISRAELI TIME, ON FEBRUARY 8, 2005, OR IF NOT A BUSINESS DAY, AS DEFINED HEREIN, AT 5:00 P.M., ISRAELI TIME, ON THE NEXT FOLLOWING BUSINESS DAY.


DEALTIME.COM LTD.


WARRANT TO PURCHASE

227,077

SERIES D CONVERTIBLE PREFERRED SHARES

DEALTIME.COM LTD., a company organized under the laws of the State of Israel (the "Company"), hereby grants to Warburg Dillon Read LLC (the "Warrantholder" ), the right to purchase from the Company, subject to the terms and conditions hereof, at any time on or after 9:00 A.M., Israeli time, on the Initial Exercise Date, and before 5:00 P.M., Israeli time, on the Expiration Date (or, if such day is not a Business Day, at or before 5:00 P.M., Israeli time, on the next following Business Day), 227,077 duly authorized, validly issued, fully paid and non-assessable Series D Preferred Shares (as defined herein) of the Company at the Exercise Price (as defined herein). This Warrant is granted in connection with the transactions described in that certain Subscription Agreement between the Company and the Purchasers described therein, dated as of February 8, 2000 (the "Subscription Agreement" ) . The number of shares purchasable hereunder and the Exercise Price are each subject to adjustment from time to time provided in Article III hereof. Upon the exercise of the Warrants or any part thereof, the Warrantholder shall execute and become a party to the Amended and Restated Shareholders Rights Agreement dated of even date herewith or any agreement then in effect between the Company's shareholders that provides for the granting of registration rights to such shareholders (the "SRA" ). Upon the issuance of Warrant Shares, the holders of the Warrant Shares shall be entitled to such rights and privileges (including registration rights) and shall be bound by such obligations as set forth in the SRA, all with respect to the exercised Warrant Shares.


ARTICLE I

Section 1.01: Definition of Terms . As used in this Warrant, the following capitalized terms shall have the following respective meanings:


Affiliate : With respect to any Person, any other Person that, (i) directly or through one or more intermediaries, controls such Person or (ii) is controlled by or is under common control with such Person.

Business Day : A day other than a Saturday, Sunday or other day on which banks in Israel are authorized by law to remain closed.

Control : With respect to any Person, possession directly or indirectly, of the power to direct or cause the direction of the management policies of such Person, whether through the ownership of voting securities, by contract or otherwise.


Conversion Shares : Ordinary Shares issuable upon conversion of the Series D Preferred Shares.

Dollars and the sign "$" : The lawful currency of the United States of America.


Exercise Price : $5.78 per Warrant Share as such price may be adjusted from time to time pursuant to Article III hereof


Expiration Date : 5:00__, Israeli time, on February 8, 2005, or, if such day is not a Business Day, the next succeeding day which is a Business Day.


Initial Issue Date : February 8, 2000.


Initial Exercise Date : February 8, 2001.


NASD : National Association of Securities Dealers, Inc. and NASDAQ : NASD Automated Quotation System.


NIS : New Israeli Shekels.

Ordinary Shares : Ordinary Shares, nominal value NIS 0.01 per share, of the Company.


Person : An individual, partnership, joint venture, corporation, limited liability company, trust, unincorporated organization, government or any department or agency thereof or any other entity engaging in commercial activities.


Public Offering : A public offering of the Company's equity securities pursuant to an effective registration statement under the Securities Act or equivalent law of another jurisdiction.


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Registration Statement : Any Registration Statement of the Company filed or to be filed with the SEC which covers the Warrant Shares, including all amendments (including post-effective amendments) and supplements thereto, all exhibits thereto and all material incorporated therein by reference.

SEC : The Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.


Securities Act : The Securities Act of 1933, as amended.


Series D Preferred Shares : Series D Convertible Preferred Shares, nominal value NIS 0.01 per share, of the Company.

Series D Preferred Share Equivalents : Securities that are convertible into or exercisable or exchangeable for Series D Preferred Shares.


Senior Officer : Any of the Chief Executive Officer, the Chief Financial Officer, or the Chief Operating Officer of the Company, or any person performing substantially similar duties.

Subscription Form : The form annexed hereto which must be surrendered upon exercise of this Warrant.

Warrants : This Warrant and all other warrants that may be issued in its or their place.


Warrantholder : The Person to whom this Warrant is initially issued, or any successor in interest thereto, or any permitted assignee or transferee thereof, in whose name this Warrant or any portion thereof is registered upon the books to be maintained by the Company for that purpose.


Warrant Shares : Series D Preferred Shares, Series D Preferred Share Equivalents and other securities purchased or purchasable upon exercise of the Warrants.


ARTICLE II


DURATION AND EXERCISE OF WARRANT


Section 2.01: Duration of Warrant . The Warrantholder may exercise this Warrant, in whole or in part, at any time and from time to time after 9:00 A.M., Israeli time, on the Initial Exercise Date, and before 5:00 P.M., Israeli time, on the Expiration Date. If this Warrant is not exercised on or before the Expiration Date, it shall become void, and all rights hereunder shall thereupon cease. The Warrant shall automatically be exercised pursuant to Section 2.03 hereof immediately before its expiration pursuant to this Section unless the Warrantholder notifies the Company in writing to the contrary before such termination.


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Section 2.02: Cash Exercise of Warrant .

(a) The Warrantholder may exercise this Warrant, in whole or in part by presentation and surrender of this Warrant to the Company at its principal corporate office or at the office of its share transfer agent, if any, with the Subscription Form annexed hereto duly executed and accompanied by payment of the Exercise Price for each Warrant Share to be purchased. The Exercise Price shall be paid by certified check or by a wire transfer made pursuant to instructions from the Company or a bank or certified check payable to the Company in an amount equal to the Exercise Price multiplied by the number of Warrant Shares being purchased upon such exercise.


(b) In case the Warrantholder shall exercise this Warrant with respect to less than all of the Warrant Shares that may be purchased under this Warrant, the Company shall execute a new warrant in the form of this Warrant for the balance of such Warrant Shares and deliver such new Warrant to the Warrantholder.

Section 2.03: Net Exercise of Warrant .

(a) In lieu of the payment method set forth in Section 2.02 above, the Warrantholder may elect to exchange this Warrant for a number of Warrant Shares equal in value to the increase in value of the Warrant Shares otherwise Purchasable hereunder on the date of exchange. If the Warrantholder elects to exchange this Warrant as provided in this Section 2.03, the Warrantholder shall tender to the Company this Warrant along with the Subscription Form, and the Company shall issue to the Warrantholder the number of Warrant Shares computed using the following formula:


X= Y(A-B)

A

Where:

X = the number of Warrant Shares to be issued to the Warrantholder.

Y = the number of Warrant Shares purchasable under this Warrant (as adjusted to the date of such calculation).

A = the Fair Market Value (as defined below) of one Warrant Share.

B = Exercise Price (as adjusted to the date of such calculation).


(b) For purposes hereof, the " Fair Market Value" of a Warrant Share shall be determined by the Company's Board of Directors in good faith; provided , however , that where there exists a public market for the Company's Ordinary Shares at the time of such exercise, the fair market value of the Warrant Shares per share shall be the aggregate value of the number of


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Ordinary Shares into which one Warrant Share is convertible (as adjusted) based on the fair market value per Ordinary Share determined as follows:

(i) If the Company's Ordinary Shares are listed on a national securities exchange or quoted on the National Association of Securities Dealers, Inc. Automated Quotation/National Market System (NASDAQ/NMS) or other securities quotation system, then the closing or last sale price, respectively, reported for the exercise date.

(ii) If the Company's Ordinary Shares are not listed on a national securities exchange or quoted on NASDAQ/NMS or other securities quotation system, but are traded in the over-the-counter market, then the mean of the closing bid and asked prices as reported in the Over-The-Counter Market Summary.

(iii) If the Warrant is exercised in connection with a Public Offering (or within five trading days after the pricing of the Public Offering), then the per share offering price (before deduction of discounts, commissions, or expenses) in such Public Offering.


(c) In the event of a net exercise pursuant to this Section 2.03, the Warrant must be exercised in whole and must be surrendered, _________ new Warrant shall be issued.

(d) If all outstanding series D Preferred Shares have been converted into Ordinary Shares pursuant to the Articles of Association of the Company, the Warrant shall convert into a Warrant to purchase Ordinary Shares.

Section 2.04: Share Certificates, Taxes, Filings, Etc .

(a) In the event of any exercise of the rights represented by this Warrant, the Company shall within five Business Days cause to be issued certificates for the total number of Warrant Shares for which this Warrant is being exercised (adjusted to reflect the effect of the anti-dilution provisions contained in Article III hereof, if any) in such denominations as are requested for delivery to the Warrantholder, and the Company shall thereupon deliver such ...