EXHIBIT 10.21
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD
PURSUANT TO RULE 144 UNDER SUCH ACT.
Void after
March_______, 2006
ONLINE XXXXXXXX.XXX, INC.
WARRANT TO PURCHASE EQUITY SECURITIES
This warrant (the "Warrant") is issued to __________________(the
"Holder") by Online Xxxxxxxx.xxx Inc., a Delaware corporation (the "Company"),
pursuant to the terms of that certain Note and Warrant Purchase Agreement (the
"Purchase Agreement") dated as of March______, 2001. The parties acknowledge
that the Company is a party to that certain Agreement and Plan of Merger dated
December 22,2000 (the "Merger Agreement") as such agreement is described in the
Purchase Agreement, pursuant to which, if closed, the Company shall become a
wholly owned subsidiary of PlanetOut Partners, Inc., a Delaware corporation (the
"Parent Corporation") (the "Merger").
1. Purchase of Shares. Subject to the terms and conditions
hereinafter set forth and set forth in the Purchase Agreement, the Holder is
entitled, upon surrender of this Warrant at the principal office of the Company,
or if the Company becomes a wholly owned subsidiary of the Parent Corporation,
then at the principal offices of the Parent Corporation (or at such other place
as the Company or the Parent Corporation shall notify the Holder hereof in
writing, to purchase from the Company or the Parent Corporation up to that
number of fully paid and nonassessable shares of Equity Securities, as more
fully described below, that equals the quotient obtained by dividing (a) twenty
five percent (25%) of the aggregate principal amount of the Convertible
Promissory Note to which this Warrant relates (the "Note"), by (b) the price per
share of the securities of the next Qualified Financing (as defined below) of
either the Company or the Parent Corporation (as adjusted for any stock splits,
dividends, combinations or the like). The shares of Equity Securities issuable
pursuant to this Section 1 shall be subject to adjustment pursuant to section 8
hereof.
2. Purchase Price. The purchase price for the Equity Securities
shall be the price per share of the securities of the Qualified Financing of the
Company or the Parent Corporation subject to adjustment pursuant to Section 8
hereof (such price, as adjusted from tune to time, is herein referred to as the
"Exercise Price").
3. Exercise Period. This Warrant shall become exercisable upon
the closing by the Company or the Parent Corporation of a transaction or series
of related transactions in which shares of preferred or common stock of the
Company or the Parent Corporation, as applicable ("Equity Securities"), are sold
and in which the gross proceeds resulting from such sale equals or exceeds Five
Million Dollars ($5,000,000) (including the aggregate amount of debt securities
converted into equity securities upon conversion of the Notes issued pursuant to
this Agreement) at a pre-money valuation of $35,000,000 or less (or a valuation
acceptable to a majority of the Lenders) and with liquidation rights equal to at
least 200% of the per share price of such equity securities or on such other
terms and conditions as may be later agreed to by the board of directors of the
Company and the Lenders (a "Qualified Financing"), and this Warrant shall remain
so exercisable until and including March_____, 2005 provided, however, this
Warrant shall no longer be exercisable and become null and void on the 179th day
after the closing of the issuance and sale of shares of Common Stock of the
Company or the Parent Corporation in the Company's or the Parent Corporation's
first underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended. In the event of an
underwritten public offering of the kind described above, the Company or the
Parent Corporation shall notify the Holder at least ten (10) days prior to the
consummation of such event.
4. Method of Exercise. While this Warrant remains outstanding and
exercisable in accordance with Section 3 above, the Holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise shall be
effected by:
(i) the surrender of the Warrant, together with
a duly executed copy of the form of subscription attached hereto, to the
Secretary of the Company, or the Parent Corporation, at its principal office;
and
(ii) the payment to the Company or the Parent
Corporation of an amount equal to the aggregate Exercise Price for the number of
Equity Securities being purchased.
5. Net Exercise. In lieu of cash exercising this Warrant, the
Holder may elect to receive Equity Securities equal to the value of this
Warrant (or the portion thereof being canceled) by surrender of this Warrant at
the principal office of the Company or the Parent Corporation together with
notice of such election, in which event the Company or the Parent Corporation
shall issue to the Holder hereof a number of shares of Equity Securities
computed using the following formula:
Y (A - B)
---------
X= A
Where:
X = The number of shares of Equity Securities to be issued to
the Holder.
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Y = The number of shares of Equity Securities purchasable under
this Warrant.
A = The then current fair market value of one share of the
Company's or the Parent Corporation's Equity Security at
the time of exercise.
B = The Exercise Price (as adjusted to the date of such
calculations).
For purposes of this Section 5, the fair market value shall be the
price per share that the Company or the Parent Corporation could obtain from a
willing buyer for shares of Equity Securities sold by the Company or the Parent
Corporation from authorized but unissued shares, as such prices shall be
determined in good faith by the Company's or the Parent Corporation's Board of
Directors, as applicable.
6. Certificates for Equity Securities. Upon the exercise of the
purchase rights evidenced by this Warrant, one or more certificates for the
number of shares of Equity Securities so purchased shall be issued as soon as
practicable thereafter, and in any event within thirty (30) days of the delivery
of the subscription notice.
7. Issuance of Equity Securities. The Company or the Parent
Corporation covenants that the Equity Securities, when issued pursuant to the
exercise of this Warrant, will be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens, and charges with respect to the
issuance thereof.
8. Adjustment of Exercise Price and Number of Shares of Equity
Securities. The number of and kind of securities purchasable upon exercise of
this Warrant and the Exercise Price shall be subject to adjustment from time to
time as follows:
(a) Subdivisions, Combinations and Other
Issuances. If the Company, or the Parent Corporation, shall at any time prior to
the expiration of this Warrant subdivide the Equity Securities, by split-up or
otherwise, or combine the Equity Securities, or issue additional shares of its
preferred stock or common stock as a dividend with respect to any shares of the
Equity Securities, the number of shares of Equity Securities issuable on the
exercise of this Warrant shall forthwith be proportionately increased in the
case of a subdivision or stock dividend, or proportionately decreased in the
case of a combination. Appropriate adjustment shall also be made to the
purchase price payable per share, but the aggregate purchase price payable for
the total number of shares of Equity Securities purchasable under this Warrant
(as adjusted) shall remain the same. Any adjustment under this Section 8(a)
shall become effective at the close of business on the date the subdivision or
combination becomes effective, or as of the record date of such dividend, or in
the event that no record date is fixed, upon the making of such dividend.
(b) Reclassification, Reorganization and
Consolidation. In case of any reclassification, capital, reorganization, or
change in the Equity Securities of the Company or the Parent Corporation (other
than as a result of a subdivision, combination, or stock dividend provided for
in Section 8(a) above), then, as a condition of such reclassification,
reorganization, or change, lawful provision shall be made, and duly executed
documents evidencing the same from the Company, the Parent Corporation or its
successor shall be
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delivered to the Holder, go that the Holder shall have the right at any time
prior to the expiration of this Warrant to purchase, at a total price equal to
that payable upon the exercise of this Warrant, the kind and amount of shares of
stock and other securities and property receivable in connection with such
reclassification, reorganization, or change by a holder of the same number of
shares of Equity Securities as were purchasable by the Holder immediately prior
to such reclassification, reorganization, or change. In any such case
appropriate provisions shall be made with respect to the rights and interest of
the Holder so that the provisions hereof shall thereafter be applicable with
respect to any shares of stock or other securities and property deliverable upon
exercise hereof, and appropriate adjustments shall be made to the purchase price
per share payable hereunder, provided the aggregate purchase price shall remain
the same.
(c) Notice of Adjustment. When any adjustment is
required to be made in the number or kind of Equity Securities purchasable upon
exercise of the Warrant, or in the Warrant Price, the Company or the Parent
Corporation shall promptly notify the Holder of such event and of the number of
Equity Securities or other securities or property thereafter purchasable upon
exercise of this Warrant.
9. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant, but in lieu of such fractional shares the Company shall make a cash
payment therefor on the basis of the Warrant Price then in effect.
10. No Stockholder Rights. Prior to exercise of this Warrant, the
Holder shall not be entitled to any rights of a stockholder with respect to the
Equity Securities, including (without limitation) the right to vote such Equity
Securities, receive dividends or other distributions thereon, exercise
preemptive rights or be notified of stockholder meetings, and such Holder shall
not be entitled to any notice or other communication concerning the business or
affairs of the Company or the Parent Corporation.
11. Successors and Assigns. The terms and provisions of this
Warrant and the Purchase Agreement shall inure to the benefit of, and be binding
upon, the Company and the Holder hereof and their respective successors and
assigns, including, with respect to the Company, the Parent Corporation.
12. Amendment and Waivers. Any term of this Warrant may be amended
and the observance of any term of this Warrant may be waived (either generally
or in a particular instance and other retroactively or prospectively), with the
written consent of the Company or the Parent Corporation and the holders of a
majority of the shares of Equity Securities issued, or issuable upon exercise of
Warrants issued pursuant to the Purchase Agreement. Any waiver or amendment
effected in accordance with this Section shall be binding upon each holder of
any shares of Equity Securities purchased under this Warrant at the time
outstanding (including securities into which such shares of Equity Securities
have been converted), each future holder of all such shares of Equity
Securities, and the Company or the Parent Corporation.
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13. Effect of Amendment or Waiver. The Holder of this Warrant
acknowledges that by the operation of Section 12 hereof, the holders of a
majority of the shares of Equity Securities issued or issuable upon exercise of
Warrants issued pursuant to the Purchase Agreement will have the right and power
to diminish or eliminate all rights, except for the number of shares for which
this Warrant is exercisable, the expiration date of this Warrant (including any
acceleration thereof) and the exercise price of the shares, of such Holder under
this Warrant or under the Purchase Agreement.
14. Governing Law. This Warrant shall be governed by the laws of
the State of California as applied to agreements among California residents made
and to be performed entirely within the State of California.
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ONLINE XXXXXXXX.XXX, INC.
By:________________________________________
Xxxxxxx X. Xxxxxx
Chief Financial Officer
Address: 000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
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SUBSCRIPTION
Online Xxxxxxxx.xxx, Inc., [PlanetOut Partners, Inc.]
Attention: Chief Financial Officer
The undersigned hereby elects to purchase, pursuant to the provisions
of the Warrant to Purchase Equity Securities issued by Online Xxxxxxxx.xxx, Inc.
[PlanetOut Partners, Inc.] and held by the undersigned, shares
of________________________stock, of Online Xxxxxxxx.xxx, Inc. [PlanetOut
Partners, Inc.].
Payment of the Exercise Price per share required under such Warrant
accompanies this Subscription.
The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for its own account for investment purposes only, and not
for resale or with a view to distribution of such shares or any part thereof.
WARRANTHOLDER:
By:_________________________________________
[NAME]
Address: ___________________________________
____________________________________________
Date:_______________________
Name in which shares should be registered:
___________________
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