exv10w21






Exhibit 10.21




THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR OTHERWISE IN ACCORDANCE WITH APPLICABLE LAW.




WARRANT TO PURCHASE STOCK




	 	 	 
	Company:

	 	Reply! Inc.
	Number of Shares:

	 	25,000 Shares
	Class of Stock:

	 	Series B Preferred Stock
	Initial Exercise Price:

	 	$3.27932 per share
	Issue Date:

	 	March 19, 2007
	Expiration Date:

	 	March 19, 2014






     THIS WARRANT CERTIFIES THAT, for value received, receipt of which is hereby acknowledged, ORIX
Venture Finance LLC (“Holder”) is entitled to purchase the number of fully paid and nonassessable
shares of the Class of Stock (the “Shares”) of Reply! Inc. (the “Company”) at the initial exercise
price per Share (the “Warrant Price”) set forth above, as constituted on the date hereof and as
adjusted pursuant to the other terms of this Warrant, subject to the provisions and upon the terms
and conditions set forth in this Warrant. This Warrant is being issued pursuant to an Amendment and
Waiver to Loan and Security Agreement between the Company and Holder dated as of March 19, 2007
(the “Loan Agreement”) (Capitalized terms used herein, which are not defined, shall have the
meanings set forth in the Loan Agreement.)



ARTICLE 1. SHARES; EXERCISE.




     1.1 Number of Shares. The number of Shares initially subject to this Warrant shall initially
be the number of Shares set forth above.



     1.2 Method of Exercise. Holder may exercise this Warrant by delivering (including a facsimile
transmission) a duly executed Notice of Exercise in substantially the form attached as Appendix 1
to the principal office of the Company. Unless Holder is exercising the conversion right set forth
in Section 1.3, Holder shall also deliver to the Company the aggregate Warrant Price for the Shares
being purchased (i) by wire transfer or by check, or (ii) by notice of cancellation of indebtedness
of the Company to Holder, or (iii) a combination of (i) or (ii).



     1.3 Conversion Right. In lieu of exercising this Warrant as specified in Section 1.2, Holder
may from time to time convert this Warrant, in whole or in part, into a number of Shares determined
by dividing (a) the aggregate fair market value of the Shares or other securities otherwise
issuable upon the proposed whole or partial exercise of this Warrant minus the aggregate Warrant
Price of such Shares by (b) the fair market value of one Share. The fair market value of the Shares
shall be determined pursuant to Section 1.6 below.



 









 





     1.4 Effective Date of Exercise. This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for exercise as provided
above. The person entitled to receive the Shares issuable upon exercise of this Warrant shall be
treated for all purposes as the holder of record of such shares as of the close of business on the
date the Holder is deemed to have exercised this Warrant.



     1.5 No Rights of Shareholder. This Warrant does not entitle Holder to any voting rights as a
shareholder of the Company prior to the exercise hereof. Upon exercise hereof, as set forth herein,
the Holder shall be deemed to be a shareholder of the Company holding the number of shares as to
which this Warrant has been exercised on the date the Notice of Exercise in substantially the form
attached as Appendix 1 has been delivered to the principal office of the Company with any payment
or other documents called for by the terms hereof.



     1.6 Fair Market Value. If the Shares are traded in a public market, the fair market value of
the Shares shall be the closing price of the Shares (or the closing price of the Company’s stock
into which the Shares are convertible) reported for the business day immediately before Holder
delivers its Notice of Exercise to the Company. If the Shares are not traded in a public market,
the Board of Directors of the Company shall determine fair market value in its reasonable good
faith judgment. The foregoing notwithstanding, if Holder advises the Board of Directors in writing
that Holder disagrees with such determination, then the Company and Holder shall promptly agree
upon a reputable investment banking firm to undertake such valuation. If the Company and Holder are
unable to agree on such investment banking firm, then the Holder shall select three reputable
investment banking firms, and from those three firms the Company shall select one to undertake such
valuation. If the valuation of such investment banking firm is greater than that determined by the
Board of Directors by more than 10%, then all fees and expenses of such investment banking firm
shall be paid by the Company. In all other circumstances, such fees and expenses shall be paid by
Holder.



     1.7 Delivery of Certificate and New Warrant. Promptly after Holder exercises or converts this
Warrant, the Company shall deliver to Holder certificates for the Shares acquired and, if this
Warrant has not been fully exercised or converted and has not expired, a new Warrant representing
the Shares not so acquired shall be delivered to Holder.



     1.8 Replacement of Warrants. On receipt of an affidavit of an officer of the Holder of the
loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or
destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the
Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like
tenor.



     1.9 Acquisition of the Company. Upon the closing of any Acquisition the successor entity shall
assume the obligations of this Warrant, and this Warrant shall be



 









 





exercisable for the same securities, cash, and property as would be payable for the Shares issuable
upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on the
record date for the Acquisition and subsequent closing. As used herein, “Acquisition” means any
sale, license, or other disposition of all or substantially all of the assets of the Company, or
any reorganization, consolidation, or merger of the Company in which the holders of the Company’s
voting securities before the transaction (for such purpose treating all outstanding options and
warrants to purchase voting securities of the Company as having been exercised and treating all
outstanding debt and equity securities convertible into voting securities of the Company as having
been converted) beneficially own less than 50% of the outstanding voting securities of the
surviving entity after the transaction.




     1.10 Automatic Exercise Prior to Expiration. To the extent this Warrant is not previously
exercised as to all of the Shares subject hereto, and if the fair market value of one Share is
greater than the Warrant Price then in effect, this Warrant shall be deemed automatically exercised
pursuant to Section 1.3 above (even if not yet surrendered) immediately before its expiration date
as set forth in this Warrant. For purposes of such automatic exercise, the fair market value of one
Share upon such expiration shall be determined pursuant to Section 1.6 above. To the extent this
Warrant or any portion thereof is deemed automatically exercised pursuant to this Section, the
Company agrees to promptly notify the holder hereof of the number of Shares, if any, the holder
hereof is to receive by reason of such automatic exercise.



ARTICLE 2. ADJUSTMENTS TO THE SHARES.




     2.1 Stock Dividends. Splits, Etc. If the Company declares or pays a dividend on its Stock
payable in Common Stock or other securities, or subdivides the outstanding Stock into a greater
amount of Stock, then upon exercise of this Warrant, for each Share acquired, Holder shall receive,
without cost to Holder, the total number and kind of securities to which Holder would have been
entitled had Holder owned the Shares of record as of the date the dividend or subdivision occurred.



     2.2 Reclassification, Exchange or Substitution. Upon any reclassification, exchange,
substitution, or other event that results in a change of the number and/or class of the securities
issuable upon exercise or conversion of this Warrant, Holder shall be entitled to receive, upon
exercise or conversion of this Warrant, the number and kind of securities and property that Holder
would have received for the Shares if this Warrant had been exercised immediately before such
reclassification, exchange, substitution, or other event. Such an event shall include any automatic
conversion of the outstanding or issuable securities of the Company of the same class or series as
the Shares to Common Stock pursuant to the terms of the Company’s Articles or Certificate of
Incorporation upon the closing of a registered public offering of the Company’s Common Stock. After
the occurrence of such an event, the Company or its successor shall promptly issue to Holder a new
Warrant for such new securities or other property. The new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments provided for in this
Article 2 including, without limitation, adjustments to the



 









 





Warrant Price and to the number of securities or property issuable upon exercise of the new
Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications,
exchanges, substitutions, or other events.




     2.3 Adjustments for Combinations, Etc. If the outstanding Shares are combined or consolidated,
by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be
proportionately increased.



     2.4 Price Adjustment. If the Company issues additional common shares (including shares of
Common Stock ultimately issuable upon conversion of a security convertible into Common Stock) after
the date of the Warrant and the consideration per additional common share is less than the Warrant
Price in effect immediately before such issue, the price at which the Shares are converted to
Common Stock shall be adjusted in accordance with the treatment of the series of securities of
which the Shares are part under the Company’s Certificate of Incorporation in effect on the Issue
Date.



     2.5 No Impairment. The Company shall not, by amendment of its Articles or Certificate of
Incorporation or through a 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 under this Warrant by the Company,
but shall at all times in good faith assist in carrying out of all the provisions of this Article 2
and in taking all such action as may be necessary or appropriate to protect Holder’s rights under
this Article against impairment.



     2.6 Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of
the 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 a cash amount computed by
multiplying the fractional interest by the fair market value of a full Share.



     2.7 Certificate as to Adjustments; Other Adjustments. Upon each adjustment of the Warrant
Price, the Company at its expense shall promptly compute such adjustment, and furnish Holder with a
certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which
such adjustment is based. The Company shall, upon written request, furnish Holder a certificate
setting forth the Warrant Price in effect upon the date thereof and the series of adjustments
leading to such Warrant Price. If any change in the outstanding securities of the Company or any
other event occurs, as to which the other provisions of this Article 2 are not strictly applicable,
or if strictly applicable would not fairly protect the purchase rights of the Holder in accordance
with such provisions, then the Board of Directors of the Company shall make an adjustment in the
number and class of shares subject to this Warrant, the Warrant Price or the application of such
provisions, so as to protect such purchase rights as aforesaid and to give the Holder, upon
exercise for the same aggregate Warrant Price, the total number, class and kind of securities as it
would have owned had the Warrant been exercised prior



 









 





to the event and had it continued to hold such securities until after the event requiring the
adjustment.




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) The initial Warrant Price hereunder is not greater than (i) the price per share at
which the Shares were last issued in an arm’s length transaction in which at least $500,000 of
the Shares were sold, or (ii) the fair market value of the Shares as of the date of this
Warrant.




     (b) All Shares which may be issued upon the exercise of the purchase right represented by
this Warrant, and all securities, if any, issuable upon conversion of the Shares, 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. The Company shall, at all times, reserve a
sufficient number of Shares and of shares of Common Stock for issuance upon Holder’s exercise
of its rights hereunder and conversion of the Shares.




     (c) The Capitalization Table attached hereto as Exhibit A is true and complete as of the
Issue Date.



     3.2 Notice of Certain Events. If the Company proposes at any time (a) to declare any dividend
or distribution upon its Common Stock, whether in cash, property, stock, or other securities and
whether or not a regular cash dividend; (b) to offer for subscription pro rata to the holders of
any class or series of its stock any additional shares of stock of any class or series or other
rights; (c) to effect any reclassification or recapitalization of Common Stock; (d) to merge or
consolidate with or into any other corporation, or sell, lease, license, or convey all or
substantially all of its assets, or to liquidate, dissolve or wind up; or (e) offer holders of
registration rights the opportunity to participate in an underwritten public offering of the
company’s securities for cash, then, in connection with each such event, the Company shall give
Holder (1) at least 20 days prior written notice of the date on which a record will be taken for
such dividend, distribution, or subscription rights (and specifying the date on which the holders
of Common Stock will be entitled thereto) or for determining rights to vote, if any, in respect of
the matters referred to in (a) and (b) above; (2) in the case of the matters referred to in (c) and
(d) above at least 20 days prior written notice of the date when the same will take place (and
specifying the date on which the holders of Common Stock will be entitled to exchange their Common
Stock for securities or other property deliverable upon the occurrence of such event); and (3) in
the case of the matter referred to in (e) above, the same notice as is given to the holders of such
registration rights.



 









 





     3.3 Information Rights. So long as the Holder holds this Warrant and/or any of the Shares, and
the Company is not filing quarterly and annual financial statements with the Securities Exchange
Commission, the Company shall deliver to the Holder the following:




	 	a)	 	promptly after mailing, copies of all notices or other written communications to the
shareholders of the Company;
	 
	 	b)	 	Monthly financial statements within 30 days after the end of each month;
	 
	 	c)	 	Quarterly financial statements within 45 days after the end of each fiscal quarter;
	 
	 	d)	 	Annual, unqualified financial statements, audited by its independent certified public
accountants, within 180 days after the end of each fiscal year of Borrower, provided that
the annual financial statements for the year ended December 31, 2005 shall be delivered on
or before April 30, 2007.





     3.4 Registration Under Securities Act of 1933, as amended. The Company agrees that with
respect to the Shares or, if the Shares are convertible into Common Stock of the Company, such
Common Stock, Holder shall have the registration rights set forth in the Company’s Investor Rights
Agreement dated March 19, 2007, as the same is in effect on the date hereof. In the event of any
subsequent changes to said Agreement which would be advantageous to the Holder, the Holder shall
have the benefit of such changes, but no changes to said Agreement which would be less advantageous
to the Holder shall be binding on the Holder.



ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER. The Holder represents and warrants to the
Company as follows:




     4.1 Purchase for Own Account. Except for transfers to Holder’s affiliates, this Warrant and
the securities to be acquired upon exercise of this Warrant by the Holder will be acquired for
investment for the Holder’s account, not as a nominee or agent, and not with a view to the public
resale or distribution within the meaning of the 1933 Act, and the Holder has no present intention
of selling, granting any participation in, or otherwise distributing the same. The Holder also
represents that the Holder has not been formed for the specific purpose of acquiring this Warrant
or the Shares.



     4.2 Disclosure of Information. The Holder has received or has had full access to all the
information it considers necessary or appropriate to make an informed investment decision with
respect to the acquisition of this Warrant and its underlying securities. The Holder further has
had an opportunity to ask questions and receive answers from the Company regarding the terms and
conditions of the offering of this Warrant and its underlying securities and to obtain additional
information (to the extent the Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information furnished to the Holder or to
which the Holder has access.



     4.3 Investment Experience. The Holder: (i) has experience as an investor in securities and
acknowledges that the Holder is able to fend for itself, can bear the



 









 





economic risk of the Holder’s investment in this Warrant and its underlying securities and has such
knowledge and experience in financial or business matters that the Holder is capable of evaluating
the merits and risks of its investment in this Warrant and its underlying securities and/or (ii)
has a preexisting personal or business relationship with the Company and certain of its officers,
directors or controlling persons of a nature and duration that enables the Holder to be aware of
the character, business acumen and financial circumstances of such persons.




     4.4 Accredited Investor Status. The Holder is an “accredited investor” within the meaning of
Regulation D promulgated under the 1933 Act.



ARTICLE 5. MISCELLANEOUS




     5.1 Term. This Warrant is exercisable, in whole or in part, at any time and from time to time
on or before the Expiration Date set forth above.



     5.2 Legends. This Warrant and the Shares (and the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) shall be imprinted with a legend in substantially the
following form:




	 	 	THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH
ACT OR AS PERMITTED UNDER APPLICABLE LAW.





     5.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issuable upon
exercise of this Warrant (and the securities issuable, directly or indirectly, upon conversion of
the Shares, if any) may not be transferred or assigned in whole or in part without compliance with
applicable federal and state securities laws by the transferor and the transferee.



     5.4 Transfer Procedure. Subject to the provisions of Section 5.2, Holder may transfer all or
part of this Warrant or the Shares issuable upon exercise of this Warrant (or the securities
issuable, directly or indirectly, upon conversion of the Shares, if any) by giving the Company
notice of the portion of the Warrant being transferred setting forth the name, address and taxpayer
identification number of the transferee and surrendering this Warrant to the Company for reissuance
to the transferee(s) (and Holder if applicable).



     5.5 Notices. All notices and other communications from the Company to the Holder, or vice
versa, shall be deemed delivered and effective when given personally or mailed by first-class
registered or certified mail, postage prepaid, to such address 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.



 









 





     5.6 Waiver; Amendment. This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought.



     5.7 Issue Tax. The issuance of the securities subject to this Warrant shall be made without
charge to the Holder for any issue tax (other than applicable income taxes) in respect thereof.



     5.8 Attorneys’ Fees. In the event of any dispute between the parties concerning the terms and
provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from
the other party all costs reasonably incurred in such dispute, including reasonable attorneys’
fees.



     5.9 Governing Law. This Warrant and all acts, transactions, disputes and controversies arising
hereunder or relating hereto, and all rights and obligations of Holder and Company shall be
governed by, and construed in accordance with the internal laws (and not the conflict of laws
rules) of the State of California.



	 	 	 	 	 
	 	Company:



Reply! Inc.

 	 
	 	By  	/s/
 Payam Zamani	 
	 	 	Title         CEO	 
	 	 	 	 
	 



Holder:




ORIX Venture Finance LLC



	 	 	 	 	 
	By  	/s/
 Kevin P. Sheehan	 	 
	 	Kevin P. Sheehan, 	 	 
	 	President and CEO 	 	 



 









 






	 	 	 	 	 



APPENDIX 1




NOTICE OF EXERCISE




     1. The
undersigned hereby elects to purchase
                     shares of the Series                      Preferred
Stock of [Company] pursuant to the terms of the attached Warrant, and tenders herewith payment
of the purchase price of such shares in full.



     1. The undersigned hereby elects to convert the attached Warrant into Shares in the
manner specified in the Warrant. This conversion is exercised with
respect to                                          of the
Shares covered by the Warrant.



[Strike paragraph that does not apply.]




     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:



 






 






 






     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 	 
	 	 	 	 



 









 






	 	 	 	 	 



Exhibit A

Capitalization Table