Convertible Promissory Note - DoubleClick Inc. and Bozell, Jacobs, Kenyon & Eckhardt Inc.
CONVERTIBLE PROMISSORY NOTE
$5,000,000 June 4, 1997
New York, New York
FOR VALUE RECEIVED, DoubleClick Inc., a Delaware corporation (the
"Maker"), promises to pay to the order of Bozell, Jacobs, Kenyon & Eckhardt,
Inc., a Delaware corporation (the "Holder"), the principal amount of FIVE
MILLION DOLLARS ($5,000,000) plus interest on such principal amount at the
interest rate, in the manner and at the times set forth below.
1. Interest Rate. The Maker hereby agrees to pay interest to the Holder in
respect of the unpaid principal balance of this Note at a per annum rate equal
to the "Federal Short-Term Rate" (as defined in Section 1274(d) of the Internal
Revenue Code of 1986, as amended from time to time, and as published from time
to time by the Department of the Treasury, Internal Revenue Service in the
Internal Revenue Bulletin) (the "Interest Rate"). Any change in the Interest
Rate resulting from a change in the Federal Short-Term Rate shall be
automatically effective on the effective date (rather than the publication date)
of each such change in the Federal Short-Term Rate. Such interest shall accrue
on the unpaid principal balance of this Note from and after the date hereof and
shall be payable quarterly with the first quarterly interest payment due on
September 30, 1997 and succeeding quarterly interest payments due on the last
Business Day of each December, March, June and September thereafter (each an
"Interest Payment Date"). All computations of interest hereunder shall be made
on the basis of a year of 360 days for the actual number of days (including the
first but excluding the last day) occurring in the period for which such
interest is payable.
2. Term. The term of this Note shall be three years from the date hereof.
All unpaid principal, together with any and all accrued and unpaid interest,
shall be due and payable on June 4, 2000 (the "Maturity Date").
3. Payment. Any payment hereunder shall be applied first to the payment of
costs and charges of collection, if any, then to accrued interest, and the
balance, if any, shall be then applied to reduction of principal. Principal and
interest are payable only in lawful money of the United States of America.
4. Late Payment. The Maker agrees that if for any reason it fails to pay
any amount due at any Interest Payment Date, at the Maturity Date or upon the
occurrence of an Event of Default, within five (5) business days after such
date, the Holder shall be entitled to damages for the detriment caused thereby,
the extent of which damages are extremely difficult and impractical to
ascertain. The Maker therefore agrees to pay default interest on such delinquent
amount at a per annum rate equal to the Federal Short Term Rate plus 1%.
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Acceptance of such default interest by the Holder shall in no event constitute a
waiver of the Makers' default with respect to such overdue amount nor prevent
the Holder from exercising any of the other rights and remedies granted
hereunder. Acceptance by the Holder of any payment under this Note after the
date that such payment is due shall not constitute a waiver of the right to
declare a default as herein provided for any failure to so pay.
5. Subordination. (a) The payment of principal of and interest under this
Note is subordinated, to the extent and in the manner hereinafter set forth, in
right of payment to the payment of all Senior Indebtedness. These subordination
provisions are made for the benefit of all parties who, in reliance upon such
provisions, are holders of, become holders of or continue to hold Senior
Indebtedness, and they or any of them may proceed to enforce such provisions
against the Holder without the necessity of joining the Maker as a party. The
Holder and any transferee of the Note agree to confirm in writing to any holder
of Senior Indebtedness or any prospective holder of Senior Indebtedness
identified to the Holder or such transferee by the Company the subordination
provisions set forth in this Section 5.
(b) The term "Senior Indebtedness" as used herein means and includes
indebtedness of the Maker, including interest and penalties thereon, for money
borrowed by the Maker from any commercial lender or institutional investor,
whether outstanding on the date hereof or thereafter created or incurred, which
is not by its terms subordinate and junior to or ranking pari passu with this
Note.
(c) In the event of any distribution of assets upon any dissolution,
winding up, liquidation, or reorganization of the Maker (whether in bankruptcy,
insolvency, or receivership proceedings), or upon any assignment for the benefit
of creditors, all Senior Indebtedness shall first be paid in full before any
payment shall be made by the Maker in respect of the principal of or interest
then owed under this Note. Any such payment or distribution which, but for the
provisions hereof, would be payable or deliverable in respect of the Note, shall
be paid or delivered directly to the holders of Senior Indebtedness or their
representatives, in the proportions in which they hold the same, until all
Senior Indebtedness shall have been paid in full, and the Holder and any
transferee of the Note by becoming a holder thereof shall be deemed to have
designated and appointed each holder or holders of Senior Indebtedness (and
their duly authorized representatives) as it agents and attorneys-in-fact to
file any necessary proof of claim not otherwise filed.
(d) During the periods specified below, no payment of principal, premium
or interest on the Note shall be made by the Maker or accepted by the Holder who
has received notice from a holder of Senior Indebtedness of a default under the
terms of such Senior Indebtedness: (i) for a 180-day period commencing upon
default in the payment of any principal or interest on the Senior Indebtedness
held by such holder, but any such period shall end earlier upon payment or the
curing or written waiver of the default or (ii) during any period which such
holder of Senior Indebtedness is prosecuting judicial proceedings to collect any
principal or interest on such Senior Indebtedness.
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(e) If in violation of the terms of this subordination, any Holder or
transferee of the Note receives payment before all Senior Indebtedness is paid
in full, such payment shall be held in trust for and paid ratably to the holder
of Senior Indebtedness or their representatives until all Senior Indebtedness
shall have been paid in full.
(f) Upon the payment in full of all Senior Indebtedness, the Holder or
transferee of the Note shall be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distributions of assets of the Maker
applicable to Senior Indebtedness. No such payments or distributions applicable
to the Senior Indebtedness shall, as between the Maker, its creditors (other
than holders of Senior Indebtedness) and the holder of the Note shall be deemed
to be a payment by the Maker to or on account of the Note.
6. Default/Acceleration. If any one or more of the following events shall
occur (hereinafter called an "Event of Default"), namely: (i) the Maker shall
become insolvent, or shall be unable to pay its debts as they mature; or shall
admit in writing its inability to pay its debts as they mature; or shall make an
assignment for the benefit of its creditors; or shall file or commence or have
filed or commenced against it any proceeding for any relief under any bankruptcy
or insolvency law or any law or laws relating to the relief of debtors which is
not dismissed or stayed within 60 days of the filing or commencement thereof,
readjustment of indebtedness, reorganizations, compositions or extensions, or a
receiver or trustee shall be appointed for the undersigned; (ii) the Maker shall
dissolve, or otherwise wind-up its affairs; or (iii) the Maker shall enter into
any transaction of merger or consolidation into or with another corporation,
THEN, upon the occurrence of any such Event of Default, or upon the expiration
of the term of this Note, the Holder at its election, and without presentment,
demand, notice of any kind, all of which are expressly waived by the Maker, may
declare the entire outstanding balance of principal and interest thereon
immediately due and payable, together with all costs of collection, including
attorneys' fees, or may exercise upon or enforce its rights, to the fullest
extent permitted by applicable law.
7. No Waiver By Holder. The acceptance by the Holder of any payment under
this Note after the date such payment is due, or the failure to declare an Event
of Default as herein provided, shall not constitute a waiver of any of the terms
of this Note or the right to require the prompt payment when due of future or
succeeding payments or to declare an Event of Default for any failure to so pay
or for any other default.
8. Attorney's Fees And Costs. In the event the Holder takes any action to
enforce any provision of this Note, either through legal proceedings or
otherwise, the Maker promises to immediately reimburse the Holder for reasonable
attorneys' fees and all other costs and expenses so incurred. The Maker shall
also reimburse Holder for all attorneys' fees and costs reasonably incurred in
the representation of the Holder in any bankruptcy, insolvency, reorganization
or other debtor-relief proceeding of or relating to the Maker, or for any action
to enforce any judgment rendered hereon or relating to enforcement hereof.
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9. Waivers. The Maker of this Note hereby waives diligence, demand,
presentment, notice of non-payment, protest and notice of protest and expressly
agrees that this Note, or any payment hereunder, may be renewed, modified or
extended from time to time and at any time, all without in any way affecting its
liability.
10. Prepayment. (a) The Maker may voluntarily prepay this Note in whole or
in part on any Prepayment Date without premium or penalty.
(b) Following the receipt by the Maker of cash proceeds referred to in
this subpart (b), the Maker shall prepay the principal amount of this Note in an
amount equal to 30% of the cash proceeds to the Maker from any sale or issuance
by the Maker of shares of its capital stock after the date hereof; provided,
that prepayment under this subpart (b) shall only be required if the product of
(i) the price per share of capital stock paid in consideration of such sale or
issuance and (ii) the number of shares of capital stock then outstanding on a
fully-diluted basis (assuming conversion of all convertible shares and exercise
of all options to purchase capital stock) is $70,000,000 or more. Any prepayment
pursuant to this subpart (b) must take place on a Prepayment Date.
(c) Following the date of any voluntary or involuntary liquidation,
dissolution or winding-up or sale of substantially all the assets or capital
stock of the Maker it shall prepay the principal amount of this Note in an
amount equal to any assets which are available for distribution to its holders
of capital stock to the extent such assets exceed $70,000,000. Any prepayment
pursuant to this subpart (c) must take place on a Prepayment Date.
(d) In no event shall the amount required to be prepaid under subparts (b)
and (c) above exceed an amount equal to the sum of (i) unpaid principal and
accrued and unpaid interest evidenced hereby and (ii) costs and charges payable
hereunder.
11. Conversion. (a) At any time prior to the Maturity Date, the unpaid
principal balance of this Note shall be convertible, at the option of the
Holder, and without payment of any additional consideration therefor, into that
number of fully paid and nonassessable shares of Common Stock as is determined
by dividing the unpaid principal balance of this Note by the Conversion Price in
effect at the time of such conversion. The "Conversion Price" shall initially be
$3.208 and shall be subject to adjustment (in order to adjust the number of
shares of Common Stock into which the unpaid principal balance of this Note is
convertible) as hereinafter provided.
(b) In order for the Holder to convert the unpaid principal balance of
this Note into shares of Common Stock, the Holder must surrender this Note to
the Maker, at the Maker's Notice Address, together with written notice that the
Holder elects to convert the unpaid principal balance of this Note into Common
Stock. Such notice shall state the Holder's name or the names of nominees as the
name or names in which the Holder wishes the certificate or certificates for
shares of Common Stock to be issued. If required by the Maker, upon surrender,
this Note shall be endorsed or accompanied by a written instrument or
instruments of transfer,
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in form reasonably satisfactory to the Maker, duly executed by the Holder or its
attorney duly authorized in writing. The date of receipt by the Maker of this
Note and above-described notice shall be the conversion date (the "Conversion
Date") and the conversion shall be deemed effective as of the close of business
on the Conversion Date. No fractional shares of Common Stock shall be issued
upon conversion of the unpaid principal balance of this Note. The Maker shall,
as soon as practicable, and no more than five Business Days, after the
Conversion Date, issue and deliver to the Holder, or to its nominees, a
certificate or certificates for the number of shares of Common Stock to which
the Holder shall be entitled, together with an amount of cash in lieu of any
fraction of a share (to which the Holder would otherwise be entitled but for the
preceding sentence) which shall be equal to the product of such fraction
multiplied by the Conversion Price. If Common Stock is to be issued to a person
other than the Holder, such person or the Holder shall pay all applicable stock
transfer taxes.
(c) The Maker shall at all times prior to the Maturity Date, reserve and
keep available out of its authorized but unissued stock, for the purpose of
effecting the conversion of this Note, such number of its duly authorized shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of all this Note into Common Stock pursuant to this Section 11.
Before taking any action that would cause an adjustment reducing the Conversion
Price below the then-existing par value of the shares of Common Stock issuable
upon conversion of the Preferred Stock, the Maker shall take any corporate
action that may, in the opinion of its counsel, be necessary in order that the
Maker may validly and legally issue fully paid and nonassessable shares of
Common Stock at such adjusted Conversion Price.
(d) Upon surrender of this Note for conversion as herein provided, this
Note shall no longer be deemed to be outstanding and all rights of the Holder
with respect to this Note shall immediately cease and terminate at the close of
business on the Conversion Date (except the right of the Holder to receive (i)
shares of Common Stock in exchange therefor (ii) unpaid interest accrued prior
to conversion and (iii) any costs and charges payable hereunder).
(e) No adjustment shall be made in the Conversion Price as the result of
the issuance of Additional Shares of Common Stock or otherwise, unless the
consideration per share determined pursuant to subpart (h) of this Section 11
for an Additional Share of Common Stock issued or deemed to be issued by the
Maker is less than the Conversion Price in effect on the date of, and
immediately prior to, the issuance of such Additional Shares of Common Stock.
(f) If the Maker at any time or from time to time shall issue any Options
or Convertible Securities, or shall fix a record date for the determination of
holders of any class of securities entitled to receive any such Options or
Convertible Securities, then the maximum number of shares of Common Stock (as
set forth in the instrument relating thereto without regard to any provision
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or, in the case of Convertible Securities and Options
therefor, the conversion or exchange of such Convertible Securities, shall be
deemed to be Additional Shares of Common Stock issued as of the time of such
issue or, in case such a record date shall have been fixed, as of the close of
business on such record date, provided, that Additional
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Shares of Common Stock shall not be deemed to have been issued unless the
consideration per share determined pursuant to subpart (h) of this Section 11 of
such Additional Shares of Common Stock would be less than the Conversion Price
in effect on the date of and immediately prior to such issue, or such record
date, as the case may be, and provided, further, that in any such case in which
Additional Shares of Common Stock are deemed to be issued:
(i) no further adjustment in the Conversion Price shall be
made upon the subsequent issue of Convertible Securities or shares
of Common Stock upon the exercise of such Options or conversion or
exchange of such Convertible Securities;
(ii) if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase in
the consideration payable to the Maker, or decrease in the number of
shares of Common Stock issuable, upon the exercise, conversion or
exchange thereof, the Conversion Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect
thereto), and any subsequent adjustments based thereon, shall, upon
any such increase or decrease becoming effective, be recomputed to
reflect such increase or decrease insofar as it affects such Options
or the right of conversion or exchange under such Convertible
Securities.
(iii) upon the expiration of any such Options or any rights of
conversion or exchange under such Convertible Securities which shall
not have been exercised, the Conversion Price computed upon the
original issue thereof (or upon the occurrence of a record date with
respect thereto) and any subsequent adjustments based thereon shall,
upon such expiration, be recomputed as if: (A) in the case of
Convertible Securities or Options for Common Stock, the only
Additional Shares of Common Stock issued were the shares of Common
Stock, if any, actually issued upon the exercise of such Options or
the conversion or exchange of such Convertible Securities and the
consideration received therefor was the consideration actually
received by the Maker for the issue of all such Options, whether or
not exercised, plus the consideration actually received by the Maker
upon such exercise, or for the issue of all such Convertible
Securities which were actually converted or exchanged, plus the
additional consideration, if any, actually received by the Maker
upon such conversion or exchange and (B) in the case of Options for
Convertible Securities, only the Convertible Securities, if any,
actually issued upon the exercise thereof were issued at the time of
issue of such Options, and the consideration received by the Maker
for the Additional Shares of Common Stock deemed to have been then
issued was the consideration actually received by the Maker for the
issue of all such Options, whether or not exercised, plus the
consideration deemed to have been received by the Maker determined
pursuant to subpart (h) of this Section 11 upon the issue of the
Convertible Securities with respect to which such Options were
actually exercised;
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(iv) no recomputation pursuant to the preceding clauses (ii)
and (iii) shall have the effect of increasing the Conversion Price
to an amount that exceeds the lower of (x) the Conversion Price on
the original adjustment date with respect to the original issuance
of such Options or Convertible Securities, or (y) the Conversion
Price that would have resulted from any issuance of Additional
Shares of Common Stock between the original adjustment date with
respect to the original issuance of such Options or Convertible
Securities and such recomputation date;
(v) in the case of any Options which expire by their terms not
more than thirty (30) days after the date of issue thereof, no
adjustment of the Conversion Price shall be made until the
expiration or exercise of all such Options, whereupon such
adjustment shall be made in the same manner provided in clause (iii)
above; and
(vi) if such record date have been fixed and such Options or
Convertible Securities are not issued on the date fixed therefor,
the adjustment previously made in the Conversion Price which became
effective on such record date shall be canceled as of the close of
business on such record date, and thereafter the Conversion Price
shall be adjusted pursuant to this subpart (f) as of the actual date
of their issuance.
(g) In the event the Maker at any time or from time to time after the date
hereof shall declare or pay any dividend or make any other distribution on the
Common Stock payable in Common Stock, or effect a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock), then and in any such event, Additional Shares of
Common Stock shall be deemed to have been issued: (i) in the case of any such
dividend or distribution, immediately after the close of business on the record
date for the determination of holders of any class of securities entitled to
receive such dividend or distribution, or (ii) in the case of any such
subdivision, at the close of business on the date immediately prior to the date
upon which such corporate action becomes effective. If such record date shall
have been fixed and such dividend shall not have been fully paid on the date
fixed therefor, the adjustment previously made in the Conversion Price which
became effective on such record date shall be canceled as of the close of
business on such record date, and thereafter the Conversion Price shall be
adjusted pursuant to this subpart (g) as of the time of actual payment of such
dividend.
(h) If the Maker shall issue Additional Shares of Common Stock, including
Additional Shares of Common Stock deemed to be issued pursuant to subpart (f) of
this Section 11, but excluding Additional Shares of Common Stock issued pursuant
to subpart (g) of this Section 11, which event is dealt with in subpart (j) of
this Section 11, without consideration or for a consideration per share less
than the Conversion Price in effect on the date of and immediately prior to such
issuer, then and in such event, such Conversion Price shall be reduced,
concurrently with such issue in order to increase the number of shares of Common
Stock into
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which this Note is convertible, to a price (calculated to the nearest cent)
determined by multiplying such Conversion Price by a fraction (x) the numerator
of which shall be (A) the number of shares of Common Stock outstanding
immediately prior to such issue (including shares of Common Stock issuable upon
conversion of any outstanding Options or Convertible Securities), plus (B) the
number of shares of Common Stock which the aggregate consideration received by
the Maker for the total number of Additional Shares of Common Stock so issued
would purchase at such Conversion Price, and (y) the denominator of which shall
be (A) the number of shares of Common Stock outstanding immediately prior to
such issue (including shares of Common Stock issuable upon conversion of any
outstanding Options or Convertible Securities), plus (B) the number of such
Additional Shares of Common Stock so issued, provided that the Conversion Price
shall not be so reduced at such time if the amount of such reduction would be an
amount less than $.001, but any such amount shall be carried forward and
reduction with respect thereto made at the time of and together with any
subsequent reduction which, together with such amount and any other amounts so
carried forward, shall aggregate $.001 or more.
(i) For purposes of this subpart (i), the consideration received by the
Maker for the issue of any Additional Shares of Common Stock shall be computed
as follows:
(i) Such consideration shall: (A) insofar as it consists of
cash, be computed at the aggregate of cash received by the Maker,
excluding amounts paid or payable for accrued interest or accrued
dividends; (B) insofar as it consists of property other than cash,
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
Maker; and (C) in the event Additional Shares of Common Stock are
issued together with other shares or securities or other assets of
the Maker for consideration which covers both, be the proportion of
such consideration so received, computed as provided in the
foregoing clauses (A) and (B), as determined in good faith by the
Board of Directors of the Maker.
(ii) The consideration per share received by the Corporation
for Additional Shares of Common Stock deemed to have been issued
pursuant to Section subpart (f) of this Section 11, relating to
Options and Convertible Securities, shall be determined by dividing:
(A) the total amount, if any, received or receivable by the Maker as
consideration for the issue of such Options or Convertible
Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent
adjustment of such consideration until such subsequent adjustment
occurs) payable to the Maker upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in the
case of Options for Convertible Securities and the conversion or
exchange of such Convertible Securities, or in the case of Options
for Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of such
Convertible Securities, by (B) the maximum
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number of shares of Common Stock (as set forth in the instruments
relating thereto, without regard to any provision contained therein
for a subsequent adjustment of such number until such subsequent
adjustment occurs) issuable upon the exercise of such Options or the
conversion or exchange of such Convertible Securities.
(j) In the event the outstanding shares of Common Stock shall be split,
subdivided, combined or consolidated, by reclassification or otherwise, into a
greater or lesser number of shares of Common Stock, and in the event that the
Maker shall issue shares of Common Stock by way of stock dividend or other
distribution to the holders of Common Stock, the Conversion Price in effect
immediately prior to such split, subdivision, stock dividend, combination or
consolidation shall, concurrently with the effectiveness of such split,
subdivision, stock dividend, combination or consolidation, be increased or
decreased proportionately.
(k) Upon the occurrence of each adjustment or readjustment of the
Conversion Price pursuant to this Section 11, the Maker at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and furnish to the Holder a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Maker shall, upon the written request at any time of
the Holder, furnish or cause to be furnished to the Holder a similar certificate
setting forth (i) such adjustments and readjustments, (ii) the Conversion Price
then in effect, and (iii) the number of shares of Common Stock and the amount,
if any, of other property that then would be received upon the conversion of
this Note.
(l) If at any time or from time to time there shall be a merger or
consolidation of the Maker with or into another corporation, or the sale of all
or substantially all of the assets of the Maker to any other corporation
(collectively, an "Acquisition"), then, as a part of such Acquisition, provision
shall be made so that the Holder shall thereafter be entitled to receive upon
conversion of this Note, the number of shares of stock or other securities or
property of the Maker, or of the successor corporation resulting from such
Acquisition, to which a holder of Common Stock issuable upon conversion would
have been entitled on such Acquisition. In any such case, appropriate adjustment
(as determined by the Board of Directors of the Maker) shall be made in the
application of the provisions of this Section 11 with respect to the rights and
interest thereafter of the Holder after the Acquisition to the end that the
provisions of this Section 11 (including adjustment of the Conversion Price then
in effect and the number of shares acquirable upon conversion of this Note)
shall be applicable after the Acquisition in as nearly equivalent a manner as
may be practicable. The Holder upon the occurrence of an Acquisition, shall have
the option of electing to exercise its rights under either this Section 11 or
Section 5, notice of which election shall be submitted in writing to the Maker
at the Maker's Notice Address no later than five days before the effective date
of such Acquisition.
(m) In the event that there occurs any of the following events:
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(i) the Maker declares a dividend (or any other distribution)
on its Common Stock payable in Common Stock or other securities of
the Maker;
(ii) the Maker subdivides or combines its outstanding shares
of Common Stock;
(iii) there occurs or is proposed to occur any
reclassification of the Common Stock of the Maker (other than a
subdivision or combination of its outstanding shares of Common Stock
or a stock dividend or stock distribution thereon), or of any
consolidation or merger of the Maker into or with another
corporation, or of the sale of all or substantially all of the
assets of the Maker; or
(iv) the involuntary or voluntary liquidation, dissolution, or
winding-up of the Maker.
then the Maker shall cause to be mailed to the Holder, at the Holder's Notice
Office, at least ten days prior to the record date specified in (A) below or
twenty days before the date specified in (B) below, a notice stating the
following information:
(A) the record date of such dividend, distribution, subdivision or
combination, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend,
distribution, subdivision, or combination are to be determined, or
(B) the date on which such reclassification, consolidation, merger,
sale, liquidation, dissolution, or winding-up is expected to become
effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock
for securities or other property deliverable upon such reclassification,
consolidation, merger, sale, liquidation, dissolution, or winding-up.
(n) The Maker will not, by amendment of its Certification of Incorporation
or through any 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 hereunder by the Maker but will at all times in good faith assist
in the carrying out of all the provisions of this Section 11 and in the taking
of all such action as may be necessary or appropriate in order to protect the
conversion rights of the Holder against impairment.
(o) All shares of Common Stock received upon the conversion of this Note
shall be deemed "Group B Shares" under the Stockholders Agreement dated as of
June 4, 1997, among the Maker, the Holder and the stockholders of the Maker
party thereto (the "Stockholders Agreement"). If this Note is held by a party
other than the original Holder, no conversion of this Note into Common Stock
shall be effective until such party delivers to the Maker a written
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acknowledgement and agreement in form and substance reasonably satisfactory to
the Maker that any shares of Common Stock of the Maker received upon the
conversion of this Note shall be deemed "Group B Shares" and that such party
shall be deemed a "Group B Stockholder" under the Stockholders Agreement.
12. Cancellation of Note. Upon the consummation of a Liquidation Event (as
defined in the Maker's Amended and Restated Certificate of Incorporation) with a
Liquidation Event Value (as defined in the Maker's Amended and Restated
Certificate of Incorporation) of less than $70,000,000, this Note shall be
immediately cancelled and all of Maker's obligations hereunder extinguished.
13. Defined Terms. As used in this Note the following terms shall have the
following meanings (such meanings equally applicable to both the singular and
the plural forms of the terms so defined):
"Additional Shares of Common Stock" means, for purposes of Section
11 of this Note, all shares of Common Stock issued (or, pursuant to subpart (f)
of Section 11 of this Note, deemed to be issued) by the Maker after the date
hereof, other than shares of Common Stock issued or issuable: (A) upon
conversion of shares of this Note; (B) by reason of a dividend, stock split,
split-up or other distribution on shares of Common Stock; (C) upon the exercise
of options to employees, officers or directors excluded from the definition of
"Option" hereunder; or (D) upon the exercise, at any time from and after the
date hereof, of Options granted or issued on or before the date hereof.
"Business Day" shall mean a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to close.
"Common Stock" shall mean the Common Stock of the Maker, par value
$.001.
"Common Stock Deemed Outstanding" means, for purposes of Section 11
of this Note, at any given time, the number of shares of Common Stock actually
outstanding at such time, plus the number of shares of Common Stock issuable at
such time upon conversion of this Note, and any other Convertible Securities
then outstanding, plus the number of shares of Common Stock issuable at any time
upon the exercise of all then outstanding Options.
"Conversion Date" shall have the meaning provided in Section 1l(b)
of this Note.
"Conversion Price" shall have the meaning provided in Section 11 of
this Note.
"Convertible Securities" means, for purposes of Section 11 of this
Note, any evidences of indebtedness, shares (other than Common Stock), or other
securities directly or indirectly convertible into or exchangeable for Common
Stock.
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<PAGE>
"Event of Default" shall have the meaning provided in Section 6 of
this Note.
"Federal Short Term Rate" shall have the meaning provided in Section
1 of this Note.
"Holder" shall have the meaning provided in the first paragraph of
this Note.
"Holder's Notice Address" shall mean the following address or such
other address as the Holder may from time to time designate in a written notice
to the Maker at the Maker's Notice Address:
Bozell, Jacobs, Kenyon & Eckhardt, Inc.
40 West 23rd Street
New York, New York 10010
Attention: Valentine Zammit
"Interest Payment Date" shall have the meaning provided in Section 1
of this Note.
"Interest Rate" shall have the meaning provided in Section 1 of this
Note.
"Maker" shall have the meaning provided in the first paragraph of
this Note.
"Maker's Notice Address" shall mean the address of the Maker set
forth opposite the Maker's signature line at the end of this Note or such other
address as the Maker may from time to time designate in a written notice to the
Holder at the Holder's Notice Address.
"Maturity Date" shall have the meaning provided in Section 2 of this
Note.
"Notice of Prepayment" shall mean prior written notice of any
prepayment to be made under subpart (a), (b) or (c) hereof which is mailed,
delivered by hand or delivered by overnight courier to the Holder at the
Holder's Notice Address. If mailed, a Notice of Prepayment shall be deemed to
have been given 3 Business Days after it is deposited in the mails, certified,
return receipt requested. If sent by overnight courier, a Notice of Prepayment
shall be deemed to have been given one Business Day following its delivery to
such overnight courier service. If hand delivered, a Notice of Prepayment shall
be deemed to have been given when delivered. A Notice of Prepayment shall
specify (i) the Prepayment Date on which such prepayment is to be made, (ii) the
amount of such prepayment, (iii) whether such prepayment is being made pursuant
to subpart (a), (b) or (c) hereof and (iv) with respect to any prepayment
pursuant to subpart (b) or (c) hereof, in reasonable detail, the facts giving
rise to such prepayment.
"Option" means, for purposes of Section 11 of this Note, any
outstanding right, option or warrant to subscribe for, purchase or otherwise
acquire Common Stock or Convertible
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<PAGE>
Securities excluding rights, warrants and options granted on or after the date
hereof, to employees, officers, directors or consultants of the Maker or any
subsidiary thereof pursuant to any stock option plan or agreement adopted by the
Board of Directors of the Maker.
"Prepayment Date" shall mean any Business Day on which the Maker
makes a prepayment of all or any portion of this Note which shall be not less
than 10 and not more than 30 Business Days after the giving of a Notice of
Prepayment in connection therewith (excluding the date on such Notice of
Prepayment is given).
"Senior Indebtedness" shall have the meaning provided in Section
5(b) of this Note.
14. Right of Set-Off. This Note is made pursuant to the Agreement and Plan
of Merger dated as of May 14, 1997 (the "Merger Agreement") by and among (i) the
Maker, (ii) DoubleClick Acquisition Corp., a Delaware corporation, (iii) the
Holder, each holder of shares of Class C Common Stock of the Maker and each
other holder of capital stock of the Maker listed on the signature pages of the
Merger Agreement, and (iv) each of Bain Capital Fund V, L.P., a Delaware limited
partnership, Bain Capital Fund V-B, L.P., a Delaware limited partnership, BCIP
Associates, a Delaware general partnership, BCIP Trust Associates, L.P., a
Delaware limited partnership, Brookside Capital Partners Fund, L.P., a Delaware
limited partnership, Greylock Equity Limited Partnership, a Delaware limited
partnership, Greylock IX Limited Partnership, a Delaware limited partnership and
ABS Capital Partners II, L.P., a Delaware limited partnership, and is subject to
all rights the Maker has to set-off and withholding as set forth in Section 9.12
of the Merger Agreement. Any transferee of the Note or Common Stock issuable
upon conversion thereof shall be bound by the obligations of the Holder set
forth in Section 9.12 of the Merger Agreement.
15. Miscellaneous. The terms of this Note shall inure to the benefit of
and bind the parties hereto and their successors and assigns. The obligations of
this Note shall not be assignable by the Maker except to an affiliate of the
Maker with the prior written consent of the Holder.
16. Governing Law. This Note shall be governed by and construed under the
laws of the State of New York, without regard to the conflict of laws rules
thereof.
DOUBLECLICK INC.
DoubleClick Inc. By:
41 Madison Avenue /s/ Kevin O'Connor
32nd Floor --------------------
New York, New York 10010 Name: Kevin O'Connor
Attention: President Title: CEO
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