Exhibit 10.12

 

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE COMMON STOCK OF THE COMPANY
ISSUABLE UPON EXERCISE OF SUCH WARRANTS HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), NOR UNDER ANY STATE SECURITIES
LAWS, AND MAY NOT BE PLEDGED, SOLD, ASSIGNED OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE
COMPANY OR AN OPINION REASONABLY SATISFACTORY TO THE COMPANY OF COUNSEL TO THE
HOLDER THAT SAID SECURITIES MAY BE PLEDGED, SOLD, ASSIGNED OR TRANSFERRED, AS
THE CASE MAY BE, WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND
ANY APPLICABLE STATE SECURITIES LAW.  BY ITS ACCEPTANCE HEREOF, THE HOLDER OF
THE WARRANTS REPRESENTED BY THIS CERTIFICATE REPRESENTS THAT IT IS ACQUIRING
THIS WARRANT FOR INVESTMENT PURPOSES.

 

YOUTHSTREAM MEDIA NETWORKS, INC.

Warrant Certificate

to Purchase Common Stock, $.01 par value

Expiring August 31, 2008

 

This Warrant Certificate certifies that JONATHAN V. DIAMOND or registered
assigns (“Holder”), is the registered holder of ONE HUNDRED THOUSAND (100,000)
Warrants expiring as set forth herein (the “Warrants”) to purchase common stock,
$.01 par value per share (the “Common Stock”), of YouthStream Media Networks,
Inc., a Delaware corporation (the “Company”).  Each Warrant entitles the Holder
upon exercise to receive from the Company one fully paid and non-assessable
share of Common Stock at the purchase price per share (the “Exercise Price”) of
Sixteen Cents ($.16), payable in cash, by certified or bank check (except in the
case of a Net Issue Exercise), upon surrender of this Warrant Certificate and
payment of the applicable Exercise Price (except in the case of a Net Issue
Exercise) at the office or agency of the Company, but only subject to the
conditions set forth herein.  The foregoing Exercise Price and the number of
shares of Common Stock issuable upon exercise of the Warrants are subject to
adjustment upon the occurrence of certain events set forth herein.

 

NO WARRANT MAY BE EXERCISED AFTER 5:00 P.M., LOS ANGELES, CALIFORNIA TIME ON 
AUGUST 31, 2008 AND TO THE EXTENT NOT EXERCISED BY SUCH TIME, SUCH WARRANTS
SHALL BECOME VOID.

 

The Warrants are subject to the following additional terms:

 

SECTION 1.                                Registration of Transfers and
Exchanges.  Subject to compliance with the terms of this Warrant Certificate,
the Company shall from time to time register the transfer of this Warrant
Certificate upon the records to be maintained by it for that purpose, upon
surrender thereof accompanied (if so required by it) by a written instrument or
instruments of transfer in form satisfactory to the Company, duly executed by
the registered Holder hereof or by the duly appointed legal representative
thereof or by a duly authorized attorney.  Upon any such

 

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registration or transfer, a new Warrant Certificate shall be issued to the
transferee(s) and the surrendered Warrant Certificate shall be canceled by the
Company.

 

The Holder of the Warrants represented by this Warrant Certificate agrees that
prior to any proposed transfer of the Warrants or of the shares of Common Stock,
if such transfer is not made pursuant to an effective Registration Statement
under the Securities Act of 1933, as amended (the “Act”), such Holder shall
deliver to the Company an opinion of counsel, reasonably satisfactory in form
and substance to the Company, and from counsel reasonably satisfactory to the
Company, that the Warrants or shares of Common Stock may be so sold without
registration under the Act.

 

The Warrant Holder agrees that each certificate representing shares of Common
Stock will bear the following legend:

 

“The securities evidenced or constituted hereby have been acquired for
investment purposes and have not been registered under the Securities Act of
1933, as amended.  Such securities may not be sold, transferred, pledged or
hypothecated unless the registration provisions of said Act and any applicable
state securities or “blue sky” laws have been complied with or the Company has
received an opinion of counsel reasonably satisfactory to the Company that such
registration is not required.”

 

The Company may deem and treat the registered Holder hereof as the absolute
owner of the Warrants (notwithstanding any notation of ownership or other
writing hereon made by anyone), for the purpose of any exercise hereof, of any
distribution to the Holder hereof, and for all other purposes, and the Company
shall not be affected by any notices to the contrary.  The Warrants do not
entitle the Holder hereof to any rights of a stockholder of the Company.

 

SECTION 2.                                Terms of Warrants; Exercise of
Warrants.  Subject to the terms contained herein, the Holder of this Warrant
Certificate shall have the right, which may be exercised at any time and from
time to time, until 5:00 p.m., Los Angeles, California time, on August 31, 2008,
to purchase and receive from the Company the number of validly issued, fully
paid and non-assessable  shares of Common Stock which the Holder may at the time
and from time to time be entitled to receive on exercise of the Warrants
represented by this Warrant Certificate and payment of the applicable Exercise
Price then in effect for such shares of Common Stock.  Each Warrant not
exercised prior to 5:00 p.m., Los Angeles, California time, on August 31, 2008
shall become void, and all rights hereunder and all rights in respect thereof
hereunder shall cease as of such time.

 

A Warrant may be exercised upon surrender to the Company at its principal office
of this Warrant Certificate with the Purchase Form attached hereto duly
completed and signed, and upon payment to the Company for the account of the
Company of the applicable Exercise Price, as adjusted as herein provided, for
the number of shares of Common Stock in respect of which such Warrants are then
exercised.  Payment of the aggregate Exercise Price shall be made in cash, by
certified or official bank check payable to the order of the Company, except in
the case of a Net Issue Exercise.

 

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Notwithstanding any provisions herein to the contrary, if the fair market value
of one (1) Warrant Share is greater than the Exercise Price (at the date of
calculation as set forth below), in lieu of exercising this Warrant for cash,
the Holder may elect to receive (the “Net Issue Exercise”) shares of Common
Stock equal to the value (as determined below) of this Warrant (or the portion
thereof being cancelled) by surrender of this Warrant Certificate at the
principal office of the Company together with the properly endorsed Purchase
form in which event the Company shall issue to the Holder the number of shares
of Common Stock computed using the following formula:

 

 

X =

Y (A – B)

 

 

 

A

 

 

 

Where                                                            X
=                             the number of shares of Common Stock to be issued
to the Holder

 

Y =                              the number of shares of Common Stock
purchasable under this Warrant Agreement or, if only a portion of the Warrants
are being exercised, the portion of the Warrants being cancelled (at the date of
such cancellation)

 

A =                            the fair market value of one (1) share of Common
Stock (at the date of such calculation)

 

B =                              Exercise Price

 

For purposes of the above calculation, the fair market value of one (1) share of
Common Stock shall be determined by the product of (i) the average of the
closing bid and asked prices of the Company’s common stock quoted in the
Over-The-Counter Market Summary or the last reported sales price of the
Company’s common stock or closing price quoted on the NASDAQ National Market or
on any exchange on which the Company’s common stock is listed, whichever is
applicable, as published in the Western Edition of the Wall Street Journal for
the five (5) trading days prior to the date of determination of the fair market
value; and (ii) the number of shares of Common Stock.

 

An example of the above provision is as follows:  if the Holder elects to
purchase one hundred thousand (100,000) shares of Common Stock and the fair
market value of one (1) share of Common Stock is Fifty Cents ($0.50), the
formula would be:

 

X =

100,000 (.50 - .11)

     =        78,000

 

.50

 

 

Therefore, in this example, the Holder must surrender twenty-two thousand
(22,000)  shares Common Stock to purchase seventy eight thousand (78,000) shares
of Common Stock under this Section 2.

 

Subject to the provisions of Section 3 hereof, upon such surrender of this
Warrant Certificate and payment of the applicable Exercise Price or exercise of
the Net Issue Exercise election, the Company shall issue and cause to be
delivered with all reasonable dispatch to the

 

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Holder of this Warrant Certificate a certificate or certificates for the number
of full shares of Common Stock issuable upon the exercise of such Warrants.  
Such certificate or certificates for the shares of Common Stock shall be deemed
to have been issued and, subject to applicable federal and state securities laws
and regulations, any person so designated to be named therein shall be deemed to
have become a holder of record of such shares of Common Stock as of the date of
the surrender of this Warrant Certificate and payment of the applicable Exercise
Price.  Such certificate or certificates for the shares of  Common Stock shall
bear the legend set forth in Section 1 hereto.  If the exercise is for less than
all the shares of Common Stock, a new Warrant Certificate shall be issued for
the remaining shares of Common Stock.

 

The Warrants shall be exercisable by the Holder in whole or in part, but not for
less than One Thousand (1,000)  shares of Common Stock at a time or such lesser
number of shares which may then constitute the maximum number purchasable; such
number being subject to adjustment as provided in Section 6 below.

 

SECTION 3.                                Payment of Taxes.  The Company will
pay any documentary stamp taxes attributable to the initial issuance of shares
of Common Stock upon the exercise of such Holder’s Warrants.

 

SECTION 4.                                Mutilated or Missing Warrant
Certificates.  In case this Warrant Certificate shall be mutilated, lost, stolen
or destroyed, the Company may in its discretion issue, in exchange and
substitution for and upon cancellation of the mutilated Warrant Certificate, or
in lieu of and substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
the Company of such loss, theft or destruction of such Warrant Certificate and
indemnity, if requested, also satisfactory to it.  An applicant for such
substitute Warrant Certificate shall also comply with such other reasonable
requirements and pay such other reasonable charges as the Company may prescribe.

 

SECTION 5.                                Reservation of  Shares of Common
Stock.  The Company will at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued shares of
Common Stock or its authorized and issued shares of Common Stock held in its
treasury, for the purpose of enabling it to satisfy any obligation to issue
shares of Common Stock upon exercise of Warrants, the maximum number of shares
of Common Stock which may then be deliverable upon the exercise of all
outstanding Warrants.

 

The Company or, if appointed, the transfer agent for the shares of Common Stock
(the “Transfer Agent”) and every subsequent transfer agent for any shares of the
Company’s capital stock issuable upon the exercise of any of the rights of
purchase aforesaid will be irrevocably authorized and directed at all times to
reserve such number of authorized shares as shall be required for such purpose.
 The Company will keep a copy of this Warrant Certificate on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company’s capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants.  The Company will supply such Transfer Agent with
duly executed certificates for such purposes. The Company will furnish such
Transfer Agent a copy of all notices of adjustments and certificates related
thereto transmitted to the Holder pursuant to Section 8 hereof.

 

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Before taking any action which would cause an adjustment to the Exercise Price
in accordance with Section 6 hereof, the Company will take any corporate action
which may, in the opinion of its counsel (which may be counsel employed by the
Company), be necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock at the Exercise Price as so
adjusted.

 

The Company covenants that all shares of Common Stock which may be issued upon
exercise of Warrants will, upon issue, be validly issued, fully paid,
nonassessable, free of preemptive rights and free from all taxes, liens, charges
and security interests with respect to the issue thereof, other than those
created by the Holder of such Warrants.

 

SECTION 6.                                Adjustment of Exercise Prices and
Number of Shares of Common Stock Issuable.  The Exercise Price and the number of
shares of Common Stock issuable upon the exercise of each Warrant are subject to
adjustment from time to time upon the occurrence of the events enumerated in
this Section 6.  The Exercise Price shall be adjusted simultaneously upon
occurrence of such events.  For purposes of this Section 6, “Common Stock” means
shares now or hereafter authorized of any class of common stock of the Company
and any other stock of the Company, however designated, that has the right
(subject to any prior rights of any class or series of preferred stock) to
participate in any distribution of the assets or earnings of the Company without
limit as to per share amount.

 

6.1                                 In case the Company shall at any time after
the date of original issuance hereof do any of the following: (i) pay a dividend
or make a distribution on its capital stock in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its Common Stock any shares of capital stock of the Company;
then immediately after the distribution date of such stock dividend or the
effective date of such subdivision, split-up, combination or reclassification,
as the case may be, the number of shares of Common Stock which the registered
Holder of this Warrant is entitled to purchase hereunder and the Exercise Price
of such shares of Common Stock shall be appropriately adjusted so that the
registered Holder hereof shall be entitled to purchase the number of shares of
Common Stock that such Holder would have held after such stock dividend,
subdivision, split-up, combination or reclassification, as the case may be, at
the aggregate Exercise Price such Holder would have paid for such shares of
Common Stock, if such had exercised the Warrants represented by this Warrant
Certificate prior to such event.

 

6.2                                 In case of any consolidation or merger to
which the Company is a party other than a merger or consolidation in which the
Company is the continuing corporation, or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, or in case of any statutory exchange of securities
with another corporation (including any exchange effected in connection with a
merger of a third corporation into the Company), lawful and adequate provisions
shall be made whereby the registered Holder of this Warrant Certificate shall
thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions specified in this Warrant Certificate and in lieu of the
shares of Common Stock immediately theretofore purchasable hereunder and
receivable upon the exercise of the Warrants, such shares of stock, securities
or assets as may be issued or payable with respect to or in exchange for a
number of outstanding shares of Common Stock equal to the number of outstanding
shares of Common Stock immediately theretofore

 

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purchasable and receivable upon the exercise of the Warrants represented by this
Warrant Certificate, and in any such case appropriate provision shall be made
with respect to the rights and interests of the registered Holder of this
Warrant Certificate to the end that the provisions hereof (including without
limitation, to the extent provided herein, provisions for adjustments of the
Exercise Price and of the number of shares of Common Stock purchasable and
receivable upon the exercise of the Warrants represented by this Warrant
Certificate) shall thereafter be applicable, as nearly as may be, in relation to
any shares of stock, securities or assets thereafter deliverable upon the
exercise hereof.  The Company will not effect any such consolidation, merger or
sale, unless prior to the consummation thereof the successor entity (if other
than the Company) resulting from such consolidation or merger or the entity
purchasing such assets shall assume by written instrument executed and delivered
to the registered Holder of this Warrant Certificate, the obligation to deliver
to such Holder such shares of stock, securities or assets as, in accordance with
the foregoing provision, such registered Holder of this Warrant Certificate may
be entitled to purchase.  Notice of any such consolidation, merger, statutory
exchange, sale or conveyance, and of the provisions so proposed to be made,
shall be mailed to the registered Holder of this Warrant Certificate not less
than forth-five (45) days prior to such event or promptly upon the Company’s
receiving notice thereof.  A sale of all or substantially all of the assets of
the Company for a consideration consisting primarily of securities shall be
deemed a consolidation or merger for the foregoing purposes.

 

6.3                                 Before taking any action which would cause
an adjustment reducing either the Exercise Price below the then par value of the
shares of Common Stock issuable upon the exercise of the Warrants, the Company
will take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable shares of such Common Stock at such adjusted Exercise Price.

 

6.4                                 In case at any time or from time to time,
conditions arise by reason of action taken by the Company, which in the opinion
of its Board of Directors or the Holder of this Warrant Certificate, are not
adequately covered by the provisions of this Warrant Certificate, and might
adversely affect the exercise rights of the Holder of this Warrant Certificate,
then the Board of Directors of the Company shall appoint a firm of independent
certified public accountants of recognized national standing (which may be the
firm regularly retained by the Company), who shall give their opinion upon the
adjustment, if any, on a basis consistent with the standards established in the
other provisions of this Warrant Certificate, necessary with respect to the
Exercise Price or the number of shares of Common Stock issuable upon exercise of
the Warrants, so as to preserve, without dilution, the exercise rights of the
Holder of this Warrant Certificate and the number of shares of Common Stock
issuable upon exercise of the Warrants by the Holder hereof to the extent
contemplated by this Section 6.  Upon receipt of such opinion, which shall be
conclusive and binding on the Company and the Holder, the Board of Directors of
the Company shall forthwith make the adjustments provided therein.

 

SECTION 7.                                Fractional Interests.  The Company
shall not be required to issue fractional shares of Common Stock on the exercise
of Warrants.  If more than one Warrant shall be presented for exercise in full
at the time by the same Holder, the number of full shares of Common Stock which
shall be issuable upon the exercise thereof shall be computed on the basis of
the aggregate number of shares of Common Stock purchasable on exercise of the
Warrants so presented.  If any fraction of a Warrant Share would, except for the
provisions of this Section 7,

 

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be issuable upon exercise of any Warrants (or specified portion thereof), the
Company shall issue a full Warrant Share in lieu of such fractional share.

 

SECTION 8.                                Notices to the Warrant Holder.  Upon
any adjustment of the Exercise Price and/or the number of  shares of Common
Stock issuable upon exercise of the Warrants pursuant to Section 6, the Company
shall promptly thereafter cause to be given to the Warrant Holder, a certificate
setting forth the Exercise Price and/or the number of shares of Common Stock
issuable upon exercise of the Warrants after such adjustment and setting forth
in reasonable detail the method of calculation and the facts upon which such
calculations are based.  Where appropriate, such notice to the Warrant Holder
may be given in advance and included as a part of the notice required to be
mailed under the other provisions of this Section 8.

 

In case:

 

8.1                                 the Company shall authorize the issuance to
holders of shares of Common Stock of rights, options or warrants to subscribe
for or purchase shares of Common Stock or of any other subscription rights or
warrants, other than pursuant to a plan approved by the stockholders of the
Company; or

 

8.2                                 the Company shall authorize the distribution
to holders of shares of Common Stock of evidences of its indebtedness or assets
(other than cash dividends or cash distributions payable out of consolidated
earnings); or

 

8.3                                 of any consolidation or merger to which the
Company is a party and for which approval of any stock-holders of the Company is
required, or of the conveyance or transfer of the properties and assets of the
Company substantially as an entirety, or of any reclassification or change of
Common Stock issuable upon exercise of the Warrants (other than a change in par
value, or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination), or a tender offer or exchange
offer for shares of Common Stock; or

 

8.4                                 of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or

 

8.5                                 the Company proposes to take any action
which would require an adjustment of the Exercise Price or the number of shares
of Common Stock issuable upon exercise of the Warrants pursuant to Section 6;

 

then the Company shall promptly give to the registered Holders of the Warrant
Certificates at their respective addresses appearing on the Warrant register by
first-class mail, postage prepaid, a written notice describing the specific
details of such contemplated action, including, without limitation (i) the date
as of which the Holders of record of shares of Common Stock to be entitled to
receive any such rights, options, warrants or distribution are to be determined,
or (ii) the initial expiration date set forth in any tender offer or exchange
offer for shares of Common Stock, or (iii) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that Holders of record of shares of Common Stock shall be entitled
to exchange such shares for securities or other property, if any, deliverable
upon such

 

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reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up.

 

SECTION 9.                                Registration Rights.  Unless otherwise
registered, the Company agrees to register the shares of Common Stock issuable
hereunder on a form S-8 Registration Statement, if they may be so registered on
that form, within 120 days after written demand from the Holder is received by
the Company.  The Holder has certain additional registration rights as set forth
in the Warrant Registration Rights Agreement between the Holder and the Company,
of even date herewith.

 

SECTION 10.                          Notices.  Any notice, request, instruction
or other document to be given hereunder shall be in writing, shall be deemed to
have been duly given or delivered when delivered personally or telecopied
(receipt confirmed, with a copy sent by certified or registered mail as set
forth herein) or sent by certified or registered mail, postage prepaid, return
receipt requested, or by Federal Express or other reputable overnight delivery
service, to the address of the party set forth below or to such address as the
party to whom notice is to be given may provide in a written notice to the
Company, a copy of which written notice shall be on file with the Secretary of
the Company:

 

To the Company:

 

YouthStream Media Networks, Inc.

244 Madison Avenue, PMB #358

New York, NY 10016

Attention:  President

 

To the Registered Holder:

 

At the address of such Registered Holder on the register maintained pursuant to
Section 1 hereof.

 

SECTION 11.                          Amendments.  This Warrant Certificate may
only be amended or modified by a written instrument executed by the Company and
the registered Holders of 100% of the issued and outstanding Warrants.

 

SECTION 12.                          Governing Law.  This Warrant Certificate
shall be governed by and construed under the laws of the State of Delaware,
without reference to choice or conflict of laws principles.

 

IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly
executed and delivered by its Chief Financial Officer, as authorized by the
Company’s Board of Directors.

 

Dated:  August 28, 2003

YOUTHSTREAM MEDIA NETWORKS,
A Delaware corporation

 

 

 

By:

 /s/ Robert N. Weingarten

 

 

Robert N. Weingarten, Chief Financial Officer

 

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YOUTHSTREAM MEDIA NETWORKS, INC.

 

PURCHASE FORM

 

Number of Warrants exercised                               

 

The undersigned hereby irrevocably elects to exercise the right represented by
this Warrant Certificate to purchase:
(a)                                                shares of Common Stock and
herewith tenders in payment for such shares $                            in cash
or by cashier’s check,  or (b)                                   shares of
Common Stock pursuant to a Net Issue Exercise, in accordance with the terms of
the Warrant Certificate.  The undersigned requests that a certificate
representing such shares be registered and delivered as follows:

 

Name:

 

Address:

 

 

 

 

 

Delivery Address:

(if different)

 

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ASSIGNMENT

 

(To be signed only upon assignment of Warrant)

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

 

 

 

 

 

 

(Name and Address of Assignee Must be Printed or Typewritten)

 

 

         /             /       

 

 

 

 

 

(Insert Social Security No. or
other identifying number of Assignee)

 

 

the within Warrant, hereby irrevocably constituting and appointing
                                           attorney to transfer said Warrant on
the books of the Company with full power of substitution in the premises.

 

DATED:

 

,

 

 

 

 

 

Signature of Registered Holder

 

 

Signature Guaranteed:

NOTE: The above signature must
correspond with the name as written on the
face of this Warrant Certificate.

 

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