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Exhibit 4.12
VOID AFTER 5:00 P.M., NEW YORK TIME ON MARCH 31, 1999
WARRANT TO PURCHASE 240,000 SHARES OF COMMON STOCK
WARRANT TO PURCHASE COMMON STOCK
OF
MULTICOM PUBLISHING, INC.
THIS WARRANT AND THE SHARES OF COMMON STOCK
ISSUABLE PURSUANT TO THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD,
PLEDGED OR OTHERWISE TRANSFERRED UNLESS
REGISTERED UNDER THE ACT OR AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE.
FOR VALUE RECEIVED, Multicom Publishing, Inc., a Washington
corporation (the "Company"), grants the following rights to GEM Advisors, Inc.,
a New York corporation with an office at 0000 Xxxxxx xx xxx Xxxxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX 00000 ("Holder").
ARTICLE 1. DEFINITIONS. As used herein, the following terms
shall have the following meanings, unless the context shall otherwise require:
(a) "Common Stock" shall mean the common stock, par value
$.01 per share, of the Company.
(b) "Corporate Office" shall mean the office of the
Company (or its successor) at which at any particular time its principal
business shall be administered, which office is located at the date hereof at
000 Xxxxxxxxxxx, 0xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
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(c) "Exercise Date" shall mean any date upon which the
Holder shall give the Company a Notice of Exercise.
(d) "Exercise Price" shall mean the price to be paid to
the Company for each share of Common Stock to be purchased upon exercise of this
Warrant in accordance with the terms hereof which shall be $1.125 per share.
(e) "Expiration Date" shall mean 5:00 p.m. (New York
time) on March 31, 1999.
(f) "SEC" shall mean the United States Securities and
Exchange Commission.
(g) "Transfer Agent" shall mean American Stock Transfer &
Trust Company, as the Company's transfer agent, or its authorized successor, as
such.
ARTICLE 2. EXERCISE.
2.1 Exercise of Warrant. This Warrant shall entitle Holder to
purchase up to 240,000 shares of Common Stock (the "Shares") at the Exercise
Price. This Warrant shall be exercisable at any time and from time to time prior
to the Expiration Date (the "Exercise Period"). This Warrant and the right to
purchase Shares hereunder shall expire and become void at the Expiration Date.
2.2 Manner of Exercise.
(a) Holder may exercise this Warrant at any time and from
time to time during the Exercise Period, in whole or in part (but not in
denominations of fewer than 5,000 Shares, except upon an exercise of this
Warrant with respect to the remaining balance of Shares purchasable hereunder at
the time of exercise), by delivering to the Company at its Corporate Office (i)
a duly executed Notice of Exercise in substantially the form attached as
Appendix 1 hereto and (ii) a bank cashier's or certified check for the aggregate
Exercise Price of the Shares being purchased.
(b) From time to time upon exercise of this Warrant, in
whole or part, in accordance with its terms, the Company will cause the Transfer
Agent to countersign and deliver stock certificates to the Holder representing
the number of Shares
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being purchased pursuant to such exercise, subject to adjustment as described
herein.
(c) Promptly following any exercise of this Warrant, if
the Warrant has not been fully exercised and has not expired, the Company will
deliver to the Holder a new Warrant for the balance of the Shares covered
hereby.
2.3 Termination. All rights of the Holder in this Warrant, to
the extent they have not been exercised, shall terminate on the Expiration Date.
2.4 No Rights Prior to Exercise. Prior to its exercise
pursuant to Section 2.2 above, this shall not entitle the Holder to any voting
or other rights as holder of Shares.
2.5 Adjustments. In case of any reclassification, capital
reorganization, stock dividend or other change of outstanding shares of Common
Stock, or in case of any consolidation or merger of the Company with or into
another corporation (other than a consolidation or merger in which the Company
is the continuing corporation and which does not result in any reclassification,
capital reorganization, stock dividend or other change of outstanding shares or
Common Stock), or in case of any sale or conveyance to another corporation of
the property of the Company as, or substantially as, an entirety (other than a
sale/leaseback, mortgage or other financing transaction), the Company shall
cause effective provision to be made so that the Holder shall have the right
thereafter, by exercising this Warrant, to purchase the kind and number of
shares of stock or other securities or property (including cash) receivable upon
such reclassification, capital reorganization, stock dividend or other change,
consolidation, merger, sale or conveyance as the Holder would have been entitled
to receive had the Holder exercised this Warrant in full immediately before such
reclassification, capital reorganization, stock dividend or other change,
consolidation, merger, sale or conveyance. Any such provision shall include
provision for adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 2.5. The foregoing
provisions shall similarly apply to successive reclassifications, capital
reorganizations, stock dividends and other changes of outstanding shares of
Common Stock and to successive consolidations, mergers, sales or conveyances.
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2.6 Fractional Shares. No fractional Shares shall be issuable
upon exercise or conversion of this Warrant and the number of 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 Holder the amount
computed by multiplying the fractional interest by the closing bid price of a
full Share on the date of the Notice of Exercise.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby
represents and warrants to the Holder as follows:
(a) All Shares which may be issued upon the exercise of
the purchase right represented by this Warrant shall, upon issuance, be duly
authorized, validly issued, fully-paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for herein or
under applicable federal and state securities laws, and not subject to any
pre-emptive rights.
(b) The Company is a corporation duly organized and
validly existing under the laws of the State of Washington, and has the full
power and authority to issue this Warrant and to comply with the terms hereof.
The execution, delivery and performance by the Company of its obligations under
this Warrant, including, without limitation, the issuance of the Shares upon any
exercise of this Warrant have been duly authorized by all necessary corporate
action. This Warrant has been duly executed and delivered by the Company and is
a valid and binding obligation of the Company, enforceable in accordance with
its terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting enforceability of
creditors' rights generally and except as the availability of the remedy of
specific enforcement, injunctive relief or other equitable relief is subject to
the discretion of the court before which any proceeding therefor may be brought.
(c) The Company is not subject to or bound by any
provision of any certificate or articles of incorporation or by-laws, mortgage,
deed of trust, lease, note, bond, indenture, other instrument or agreement,
license, permit, trust, custodianship, other restriction or any applicable
provision of any law, statute, rule, regulation, judgment, order, writ,
injunction or decree of
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any court, governmental body, administrative agency or arbitrator which could
prevent or be violated by or under which there would be a default (or right of
termination) as a result of the execution, delivery and performance by the
Company of this Warrant.
ARTICLE 4. REGISTRATION UNDER THE ACT.
(a) On or before June 30, 1997, the Company shall prepare
and file with the SEC a registration statement under the Act covering the resale
of this Warrant and the Shares and/or any securities issued in lieu or
substitution thereof (collectively, the "Registrable Securities") and shall use
its best efforts to cause such registration statement to become effective by
July 31, 1997. In addition, the Company shall not permit any securities other
than the Registrable Securities and the securities set forth in Schedule A
annexed hereto to be included in the Registration Statement.
(b) Until such time as the Registration Statement shall
become effective and except as may be required by applicable law, this Warrant
and the certificate(s) evidencing the Shares shall contain a restrictive legend
restricting the sale, pledge or transfer of this Warrant and such Shares.
(c) Registration Procedures. Pursuant to the provisions
above, the Company will:
(i) prepare and file with the SEC a registration
statement with respect to the resale of the Registrable Securities, and use its
best efforts to cause such registration statement to become and remain effective
for such period as may be reasonably necessary to effect the sale of such
securities, not to exceed four (4) years;
(ii) prepare and file with the SEC such amendments to
such registration statement and supplements to the prospectus contained therein
as may be necessary to keep such registration statement effective for such
period as may be reasonably necessary to effect the sale of such securities, not
to exceed four (4) years;
(iii) furnish to the Holder and to the underwriter of
the securities being registered, if any, such
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reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriter may
reasonably request in order to facilitate the public offering of such
securities;
(iv) notify the Holder, promptly after it shall
receive notice thereof, of the time when such registration statement has become
effective or a supplement to any prospectus forming a part of such registration
statement has been filed;
(v) notify the Holder promptly of any request by the
SEC for the amending or supplementing of such registration statement or
prospectus or for additional information;
(vi) prepare and file with the SEC, promptly upon the
request of the Holder, any amendments or supplements to such registration
statement or prospectus which, in the opinion of counsel for the Holder (and
concurred in by counsel for the Company), is required under the Act or the rules
and regulations thereunder in connection with the distribution of the
Registerable Securities by the Holder;
(vii) prepare and promptly file with the SEC and
promptly notify the Holder of the filing of such amendment or supplement to such
registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Act, any event shall have
occurred as the result of which any such prospectus or any other prospectus as
then in effect would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances in which they were made, not misleading; and
(viii) advise the holder, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop order by
the SEC suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for that purpose and promptly use
its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued.
(d) Expenses.
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(i) With respect to the registration under the Act
pursuant to Article 4(a) of this Warrant, all fees, costs and expenses of and
incidental to such registration shall be borne by the Company.
(ii) The fees, costs and expenses of such
registration shall include, without limitation, all registration, filing, and
NASD fees, printing expenses, fees and disbursements of counsel and accountants
for the Company. Fees and disbursements of counsel and accountants for the
selling security holders and any other expenses incurred by the selling security
holders not expressly included above shall be borne by the selling security
holders.
(e) Indemnification.
(i) The Company will indemnify and hold harmless the
Holder, its directors and officers, and any underwriter (as defined in the Act)
for such Holder and each person, if any, who controls such Holder or such
underwriter within the meaning of the Act, from and against, and will reimburse
such Holder and each such underwriter and controlling person with respect to,
any and all loss, damage, liability, cost and expense to which such Holder or
any such underwriter or controlling person may become subject under the Act or
otherwise, insofar as such losses, damages, liabilities, costs or expenses are
caused by any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, damage, liability, cost or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by the Holder, such underwriter or
such controlling person in writing specifically for use in the preparation
thereof.
(ii) As a condition of the Company's obligations
under this Article 4, the Holder will indemnify and hold harmless the Company,
its directors, officers and employees, any controlling person and any
underwriter from and against, and
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will reimburse the Company, its directors and officers, any controlling person
and any underwriter with respect to, any and all loss, damage, liability, cost
or expense to which the Company or any controlling person and/or any underwriter
may become subject under the Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in such registration statement,
any prospectus contained therein or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was so
made in reliance upon and in strict conformity with written information
furnished by or on behalf of the Holder specifically for use in the preparation
thereof.
(iii) Promptly after receipt by an indemnified party,
pursuant to the provisions of paragraph (i) or (ii) of this Section 4(e), of
notice of the commencement of any action involving the subject matter of the
foregoing indemnity provisions, such indemnified party will, if a claim thereof
is to be made against the indemnifying party pursuant to the provisions of said
paragraph (i) or (ii), promptly notify the indemnifying party of the
commencement thereof; but the omission to so notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than hereunder. In case such action is brought against any indemnified
party and it notifies the indemnifying party of the commencement thereof, the
indemnifying party shall have the right to participate in, and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, provided, however, if the defendants in any
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there is a conflict of
interest which would prevent counsel for the indemnifying party from also
representing the indemnified party, the indemnified party or parties have the
right to select separate counsel to participate in the defense of such action on
behalf of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
pursuant to the provisions of
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said paragraph (i) or (ii) for any legal or other expense subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation, unless (A)the indemnified party shall have
employed counsel in accordance with the provisions of the preceding sentence or
(B) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party.
The Company's agreements with respect to this Warrant or the
Shares in this Article 4 shall continue in effect regardless of the exercise and
surrender of this Warrant.
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ARTICLE 5. MISCELLANEOUS.
5.1 Transfer. This Warrant may not be transferred or assigned,
in whole or in part, at any time, except in compliance with applicable federal
and state securities laws by the transferor and the transferee (including,
without limitation, the delivery of an investment representation letter and a
legal opinion reasonably satisfactory to the Company), provided that this
Warrant may not be transferred or assigned such that either the Holder or any
transferee will, following such transfer or assignment, hold a Warrant for the
right to purchase fewer than 5,000 Shares.
5.2 Transfer Procedure. Subject to the provisions of Section
5.1, Holder may transfer or assign this Warrant by giving the Company notice
setting forth the name, address and taxpayer identification number of the
transferee or assignee, if applicable (the "Transferee") and surrendering this
Warrant to the Company for reissuance to the Transferee (and the Holder, in the
event of a transfer or assignment of this Warrant in part). (Each of the persons
or entities in whose name any such new Warrant shall be issued are herein
referred to as a Holder").
5.3 Loss, Theft, Destruction or Mutilation. If this Warrant
shall become mutilated or defaced or be destroyed, lost or stolen, the Company
shall execute and deliver a new Warrant in exchange for and upon surrender and
cancellation of such mutilated or defaced Warrant or, in lieu of and in
substitution for such Warrant so destroyed, lost or stolen, upon the Holder
filing with the Company evidence satisfactory to it that such Warrant has been
so mutilated, defaced, destroyed, lost or stolen. However, the Company shall be
entitled, as a condition to the execution and delivery of such new Warrant, to
demand indemnity satisfactory to it and payment of the expenses and charges
incurred in connection with the delivery of such new Warrant. Any Warrant so
surrendered to the Company shall be canceled.
5.4 Notices. All notices and other communications from the
Company to the Holder or vice versa shall be deemed delivered and effective when
given personally, by facsimile transmission and confirmed in writing or mailed
by first-class registered or certified mail, postage prepaid at such address
and/or facsimile number as may have been furnished to the Company or the Holder,
as the case may be, in writing by the Company or the Holder from time to time.
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5.5 Waiver. This Warrant and any term hereof may be changed,
waived, or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
5.6 Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of the
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Company's incorporation, without giving effect to its principles regarding
conflicts of law.
Dated: March 31, 1997
MULTICOM PUBLISHING, INC.
Attest:__________________ By:___________________________________
Name:Xxxxxx X. Xxxxxx
Title:Chairman and CEO
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APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase ______ shares of
the Common Stock of Multicom Publishing, Inc. pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price of such
shares in full.
2. Please issue a certificate or certificates representing
said shares in the name of the undersigned or in such other name as is specified
below:
_______________________________
(Name)
_______________________________
_______________________________
(Address)
3. The undersigned represents it is acquiring the shares
solely for its own account and not as a nominee for any other party and not with
a view toward the resale or distribution thereof except in compliance with
applicable securities laws.
_______________________________
(Signature)
________________________
(Date)
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SCHEDULE A
WARRANT TO PURCHASE COMMON STOCK
