Exhibit 4.12
The security represented by this certificate has
not been registered under the Securities Act of
1933, as amended (the "Act"), and may not be
transferred, sold or pledged without registration
under the Act, unless otherwise exempt from such
registration requirements.
L90, INC.
STOCK PURCHASE WARRANT
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Date of Issuance: July 24, 2000 Certificate No. W-WM2
FOR VALUE RECEIVED, L90, INC., a Delaware corporation (the
"Company"), hereby grants to DAVID HOU or his registered assigns (the
"Registered Holder") the right to purchase from the Company 48,501 shares of
Common Stock, at a price per share of $1.9792 (as adjusted from time to time in
accordance herewith, the "Exercise Price"). Certain capitalized terms used
herein are defined in Section 3 hereof. The amount and kind of securities
obtainable pursuant to the rights granted hereunder and the purchase price for
such securities are subject to adjustment pursuant to the provisions contained
in this Warrant.
This Warrant is subject to the following provisions:
Section 1. Exercise of Warrant.
1A. Exercise Period. The Registered Holder may exercise, in whole or
in part (but not as to a fractional share of Common Stock), the purchase rights
represented by this Warrant at any time and from time to time after the Date of
Issuance to and including December 31, 2002 (the "Exercise Period").
1B. Exercise Procedure.
(i) This Warrant shall be deemed to have been exercised when the
Company has received all of the following items (the "Exercise Time"):
(a) a completed Exercise Agreement, as described in paragraph 1C
below, executed by the Person exercising all or part of the purchase rights
represented by this Warrant (the "Purchaser");
(b) this Warrant;
(c) if this Warrant is not registered in the name of the
Purchaser, an Assignment or Assignments in the form set forth in Exhibit II
hereto evidencing the assignment of this Warrant to the Purchaser, in which case
the Registered Holder shall have complied with the provisions set forth in
Section 7 hereof; and
(d) either (1) a check payable to the Company in an amount equal
to the product of the Exercise Price multiplied by the number of shares of
Common Stock being purchased upon such exercise (the "Aggregate Exercise Price")
or (2) a written notice to the Company that the Purchaser is exercising the
Warrant (or a portion thereof), without the exchange of funds, by authorizing
the Company to withhold from issuance a number of shares of Common Stock
issuable upon such exercise of the Warrant which when multiplied by the Market
Price of the Common Stock is equal to the Aggregate Exercise Price (and such
withheld shares shall no longer be issuable under this Warrant) (a "Cashless
Exercise").
(ii) Certificates for shares of Common Stock issued upon exercise of
this Warrant shall be delivered by the Company to the Purchaser within five
business days after the date of the Exercise Time. Unless this Warrant has
expired or all of the exercise rights represented hereby have been exercised,
the Company shall prepare a new Warrant, substantially identical hereto,
representing the rights formerly represented by this Warrant which have not
expired or been exercised and shall, within such five-day period, deliver such
new Warrant to the Person designated for delivery in the Exercise Agreement.
(iii) The Common Stock issuable upon the exercise of this Warrant
shall be deemed to have been issued to the Purchaser at the Exercise Time, and
the Purchaser shall be deemed for all purposes to have become the record holder
of such Common Stock at the Exercise Time.
(iv) The issuance of certificates for shares of Common Stock upon
exercise of this Warrant shall be made without charge to the Registered Holder
or the Purchaser for any issuance tax in respect thereof or other cost incurred
by the Company in connection with such exercise and the related issuance of
shares of Common Stock. Each share of Common Stock issuable upon exercise of
this Warrant shall, upon payment of the Exercise Price therefor, be fully paid
and nonassessable and free from all liens and charges with respect to the
issuance thereof.
(v) The Company shall not close its books against the transfer of
this Warrant or of any share of Common Stock issued or issuable upon the
exercise of this Warrant in any manner which interferes with the timely exercise
of this Warrant.
(vi) The Company shall at all times reserve and keep available out
of its authorized but unissued shares of Common Stock solely for the purpose of
issuance upon the exercise of the Warrant, such number of shares of Common Stock
issuable upon the exercise of the Warrant. All shares of Common Stock which are
so issuable shall,
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when issued, be duly and validly issued, fully paid and nonassessable and free
from all taxes, liens and charges except those incurred or imposed by the
Registered Holder. The Company shall take all such actions as may be reasonably
necessary to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or governmental regulation or any
requirements of any domestic securities exchange upon which shares of Common
Stock may be listed (except for official notice of issuance which shall be
immediately delivered by the Company upon each such issuance). The Company shall
from time to time take all such action as may be necessary to assure that the
par value of the unissued Common Stock acquirable upon exercise of this Warrant
is at all times equal to or less than the Exercise Price. The Company shall not
take any action which would cause the number of authorized but unissued shares
of Common Stock to be less than the number of such shares required to be
reserved hereunder for issuance upon exercise of the Warrants.
1C. Exercise Agreement. Upon any exercise of this Warrant, the
Exercise Agreement shall be substantially in the form set forth in Exhibit I
hereto, except that if the shares of Common Stock are not to be issued in the
name of the Person in whose name this Warrant is registered, the Exercise
Agreement shall also state the name of the Person to whom the certificates for
the shares of Common Stock are to be issued, and if the number of shares of
Common Stock to be issued does not include all the shares of Common Stock
purchasable hereunder, it shall also state the name of the Person to whom a new
Warrant for the unexercised portion of the rights hereunder is to be delivered.
Such Exercise Agreement shall be dated the actual date of execution thereof.
1D. Fractional Shares. If a fractional share of Common Stock would,
but for the provisions of paragraph 1A, be issuable upon exercise of the rights
represented by this Warrant, the Company shall, within five business days after
the date of the Exercise Time, deliver to the Purchaser a check payable to the
Purchaser in lieu of such fractional share in an amount equal to the difference
between the Market Price of such fractional share as of the date of the Exercise
Time and the Exercise Price of such fractional share.
Section 2. Dilution Protection.
2A. Record Date. If the Company takes a record of the holders of
Common Stock for the purpose of entitling them (i) to receive a dividend or
other distribution payable in Common Stock, options or in convertible securities
or (ii) to subscribe for or purchase Common Stock, options or convertible
securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.
2B. Subdivision or Combination of Common Stock. In case the Company
shall at any time or from time to time (i) pay any dividend, or make any
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distribution on the outstanding shares of Common Stock or Common Stock
Equivalents in shares of Common Stock or Common Stock Equivalents, (ii)
subdivide the outstanding shares of Common Stock, (iii) combine the outstanding
shares of Common Stock into a smaller number of shares, (iv) issue by
reclassification of the shares of Common Stock any shares of capital stock of
the Company, or (v) undertake any action or event similar to those listed in
clauses (i) through (iv) above, then and in each such case, the Exercise Price
and the number of Warrant Shares in effect immediately prior to such event or
the record date therefor, whichever is earlier, shall be adjusted so that the
Warrantholder shall be entitled to receive the number and type of shares of
Common Stock or other consideration which such Warrantholder would have owned or
have been entitled to receive after the happening of any of the events described
above, had such Warrant been converted into Common Stock immediately prior to
the happening of such event or the record date therefor, whichever is earlier.
2C. Reorganization, Reclassification, Consolidation, Merger or Sale.
Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Company's assets or other transaction,
in each case which is effected in such a way that the holders of Common Stock
are entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is referred
to herein as "Organic Change." Prior to the consummation of any Organic Change,
the Company shall make appropriate provision (in form and substance reasonably
satisfactory to the Registered Holders of the Warrant representing a majority of
the Common Stock obtainable upon exercise of all of the Warrant then
outstanding) to insure that each of the Registered Holders of the Warrant shall
thereafter have the right to acquire and receive, in lieu of or addition to (as
the case may be) the shares of Common Stock immediately theretofore acquirable
and receivable upon the exercise of such holder's Warrant, such shares of stock,
securities or assets as may be issued or payable with respect to or in exchange
for the number of shares of Common Stock immediately theretofore acquirable and
receivable upon exercise of such holder's Warrant had such Organic Change not
taken place. In any such case, the Company shall make appropriate provision (in
form and substance reasonably satisfactory to the Registered Holders of the
Warrant representing a majority of the Common Stock obtainable upon exercise of
all Warrant then outstanding) with respect to such holders' rights and interests
to insure that the provisions of this Section 2 hereof shall thereafter be
applicable to the Warrant (including, in the case of any such consolidation,
merger or sale in which the successor entity or purchasing entity is other than
the Company, an immediate adjustment in the number of shares of Common Stock
acquirable and receivable upon exercise of the Warrant based on the relative
value of the Common Stock and the common stock of the successor entity or
purchasing entity).
2D. Notices.
(i) The Company shall give written notice to the Registered Holder
at least 20 days prior to the date on which the Company closes its books or
takes a record
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(A) with respect to any dividend or distribution upon the Common Stock, (B) with
respect to any pro rata subscription offer to holders of Common Stock or (C) for
determining rights to vote with respect to any Organic Change, dissolution or
liquidation.
(ii) The Company shall give written notice to the Registered Holders
at least 20 days prior to the date on which any Organic Change, dissolution or
liquidation shall take place.
(iii) Whenever the number of Warrant Shares or Exercise Price is
adjusted as set forth in Section 2B, the Company shall prepare and deliver
forthwith to the Warrantholder a certificate signed by an authorized officer
setting forth the adjusted number of Warrant Shares or Exercise Price (as
applicable), setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which adjustment was made.
Section 3. Definitions. The following terms have meanings set forth
below:
"Common Stock" means the Company's Common Stock, par value $.001 per
share, and any capital stock of any class of the Company hereafter authorized
which is not limited to a fixed sum or percentage of par or stated value in
respect to the rights of the holders thereof to participate in dividends or in
the distribution of assets upon any liquidation, dissolution or winding up of
the Company; provided that with respect to the shares of Common Stock issuable
upon the exercise of this Warrant, "Common Stock" means the Company's Common
Stock, par value $.001 per share.
"Market Price" means as to any security the average of the closing
prices of such security's sales on the principal domestic securities exchange on
which such security may at the time be listed, or, if there have been no sales
on any such exchange on any day, the average of the highest bid and lowest asked
prices on such exchanges at the end of such day, or, if on any day such security
is not so listed, the average of the representative bid and asked prices quoted
in the NASDAQ System as of 4:00 P.M., New York time, on such day, or, if on any
day such security is not quoted in the NASDAQ System, the average of the highest
bid and lowest asked prices on such day in the domestic over-the-counter market
as reported by the National Quotation Bureau, Incorporated, or any similar
successor organization, in each such case averaged over a period of 21 days
consisting of the day as of which "Market Price" is being determined and the 20
consecutive business days prior to such day; provided that if such security is
listed on any domestic securities exchange the term "business days" as used in
this sentence means business days on which such exchange is open for trading. If
at any time such security is not listed on any domestic securities exchange or
quoted in the NASDAQ System or the domestic over-the-counter market, the "Market
Price" shall be the fair value thereof determined jointly by the Company and the
Registered Holders of the Warrant representing a majority of the Common Stock
purchasable upon exercise of all of the Warrant then outstanding; provided that
if such parties are unable to reach
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agreement within a reasonable period of time, such fair value shall be
determined by an appraiser jointly selected by the Company and the Registered
Holders of the Warrant representing a majority of the Common Stock purchasable
upon exercise of all of the Warrant then outstanding. The determination of such
appraiser shall be final and binding on the Company and the Registered Holders
of the Warrant, and the fees and expenses of such appraiser shall be paid by the
Company.
"Person" means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.
Other capitalized terms used in this Warrant but not defined herein
shall have the meanings set forth in the Purchase Agreement.
Section 4. No Voting Rights; Limitations of Liability. This Warrant
shall not entitle the holder hereof to any voting rights or other rights as a
stockholder of the Company. No provision hereof, in the absence of affirmative
action by the Registered Holder to purchase Common Stock, and no enumeration
herein of the rights or privileges of the Registered Holder shall give rise to
any liability of such holder for the Exercise Price of Common Stock acquirable
by exercise hereof or as a stockholder of the Company.
Section 5. Warrant Transferable. Subject to the transfer conditions
referred to in the legend endorsed hereon, compliance with applicable securities
laws and compliance with any agreement between the Company and the Registered
Holder, this Warrant and all rights hereunder are transferable, in whole or in
part, without charge to the Registered Holder, upon surrender of this Warrant
with a properly executed Assignment (in the form of Exhibit II hereto) at the
principal office of the Company.
Section 6. Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the Registered Holder at
the principal office of the Company, for new Warrant of like tenor representing
in the aggregate the purchase rights hereunder, and each of such new Warrant
shall represent such portion of such rights as is designated by the Registered
Holder at the time of such surrender. The date the Company initially issues this
Warrant shall be deemed to be the "Date of Issuance" hereof regardless of the
number of times new certificates representing the unexpired and unexercised
rights formerly represented by this Warrant shall be issued. All Warrant
representing portions of the rights hereunder are referred to herein as the
"Warrant."
Section 7. Replacement. Upon receipt of evidence reasonably
satisfactory to the Company (an affidavit of the Registered Holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing this Warrant, and in the case of any such loss, theft
or destruction, upon receipt of indemnity reasonably satisfactory to the Company
(provided that if the holder is a financial
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institution or other institutional investor its own agreement shall be
satisfactory), or, in the case of any such mutilation upon surrender of such
certificate, the Company shall (at its expense) execute and deliver in lieu of
such certificate a new certificate of like kind representing the same rights
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate.
Section 8. Notices. Except as otherwise expressly provided herein,
all notices referred to in this Warrant shall be in writing and shall be
delivered personally, sent by reputable overnight courier service (charges
prepaid) or sent by registered or certified mail, return receipt requested,
postage prepaid and shall be deemed to have been given when so delivered, sent
or three (3) days after being deposited in the U.S. Mail (i) to the Company, at
its principal executive offices and (ii) to the Registered Holder of this
Warrant, at such holder's address as it appears in the records of the Company
(unless otherwise indicated by any such holder).
Section 9. Amendment and Waiver. Except as otherwise provided
herein, the provisions of the Warrant may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Registered Holders of Warrant representing a majority of the shares of Common
Stock obtainable upon exercise of the Warrant; provided that no such action may
change the Exercise Price of the Warrant or the number of shares or class of
stock obtainable upon exercise of each Warrant without the written consent of
the Registered Holders of Warrant representing at least a majority of the shares
of Common Stock obtainable upon exercise of the Warrant.
Section 10. Descriptive Headings; Governing Law. The descriptive
headings of the several Sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. The corporation
laws of the State of Delaware shall govern all issues concerning the relative
rights of the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be
governed by the internal law of the State of Delaware, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of Delaware.
Section 11. Securities Laws. Registered Holder acknowledges that
neither the Warrant nor the shares of Common Stock issuable upon exercise hereof
have been registered under the Act, and any sale, transfer or disposition hereof
and thereof many not be made unless either so registered or unless such sale,
transfer or disposition is exempt therefrom.
* * * *
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
and attested by its duly authorized officers under its corporate seal and to be
dated the Date of Issuance hereof.
L90, INC.
By _________________________________
Name:
Title:
Attest:
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An Authorized Officer
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EXHIBIT I
EXERCISE AGREEMENT
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To: Dated:
The undersigned, pursuant to the provisions set forth in the
attached Warrant (Certificate No. 2000-W-____), hereby agrees to subscribe for
the purchase of _____ shares of the Common Stock covered by such Warrant and
makes payment herewith in full therefor at the price per share provided by such
Warrant.
Signature___________________________
Address_____________________________
EXHIBIT II
ASSIGNMENT
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FOR VALUE RECEIVED, hereby sells, assigns and transfers all of the
rights of the undersigned under the attached Warrant (Certificate No.
2000-W-____) with respect to the number of shares of the Common Stock covered
thereby set forth below, unto:
Names of Assignee Address No. of Shares
Dated: Signature
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Witness
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