EXHIBIT 10.10
WORLDRES, INC.
AMENDED AND RESTATED
SERIES C PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
THIS AMENDED AND RESTATED SERIES C PREFERRED STOCK AND WARRANT PURCHASE
AGREEMENT (this "Agreement") is made as of the 16th day of March, 1998, by and
among WorldRes, Inc., a California corporation (the "Company"), and the
purchasers listed on Schedule A hereto, each of whom is herein referred to as a
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"Purchaser."
RECITALS
A. The Company and certain of the Purchasers (the "Initial Purchasers")
entered into a Series C Preferred Stock Purchase Agreement dated December 30,
1997 (the "Prior Agreement").
B. The Company and the Initial Purchasers wish to amend and restate the
Prior Agreement to provide for the issuance of the Warrants (as defined below)
to all Purchasers, among other things.
C. Section 9.7 of the Prior Agreement provides that the Prior Agreement
may be amended with the written consent of the Company and the holders of at
least sixty percent (60%) of the Common Stock issued or issuable upon the
conversion of the Series C Preferred Stock (as defined in the Prior Agreement).
D. The Company and the undersigned holders of not less than sixty percent
(60%) of the Series C Preferred Stock hereby amend and restate the Prior
Agreement in its entirety as follows:
AGREEMENT
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock and Warrants.
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1.1 Sale and Issuance of Series C Preferred Stock and Warrants.
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(a) The Company adopted and filed with the Secretary of State of
California on or before the Initial Closing (as defined below) the Amended and
Restated Articles of Incorporation in the form attached hereto as Exhibit A-1
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(the "Restated Articles"). The Company shall adopt and file with the Secretary
of State of California on or before any Subsequent Closing (as defined below)
the Certificate of Amendment of Amended and Restated Articles of Incorporation
in the form attached hereto as Exhibit A-2 (the "Certificate of Amendment").
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(b) Subject to the terms and conditions of this Agreement, each
Purchaser agrees, severally, to purchase at the Closing and the Company agrees
to sell and issue to each Purchaser at the Closing (i) that number of shares of
the Company's Series C Preferred Stock set forth opposite such Purchaser's name
on Schedule A hereto under the heading "No. Shares" at a purchase price of $3.70
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per share, for an aggregate purchase price set forth on Schedule A, and (ii) a
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warrant in the form attached hereto as Exhibit B (each, a "Warrant" and
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collectively, the "Warrants") to purchase that number of shares of Series C
Preferred Stock of the Company set forth opposite such Purchaser's name on
Schedule A hereto under the heading "No. Warrant Shares" at an exercise price of
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$4.63 per share. The purchase price for each Warrant shall be equal to $0.01
per share of Series C Preferred Stock issuable upon exercise of such Warrant.
Collectively, the shares of Series C Preferred Stock and the Warrants are
referred to herein as the "Securities."
1.2 Closing.
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(a) The initial closing of the purchase and sale of the Series C
Preferred Stock (the "Initial Closing") took place at the offices of Venture Law
Group, 0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx, Xxxxxxxxxx (the "VLG Offices"), on
December 30, 1997 (the "Initial Closing Date"). The purchase and sale of the
Warrants issuable to the Initial Purchasers shall take place on the date of this
Agreement at the VLG Offices. Subsequent closing(s) of the purchase and sale of
the Securities under this Agreement (the "Subsequent Closing(s)") may take place
at a time agreed upon by the Company and the Purchasers participating in a
particular Subsequent Closing (each such date, a "Subsequent Closing Date"),
which shall occur in any event no later than April 15, 1998. As used herein, the
term "Closing" shall refer collectively to the Initial Closing and each
Subsequent Closing and the term "Closing Date" shall refer collectively to the
Initial Closing Date and each Subsequent Closing Date, as applicable.
(b) At the Initial Closing the Company delivered a stock
certificate representing the Series C Preferred Stock and, if applicable, at
each Subsequent Closing, the Company shall deliver to each Purchaser a stock
certificate representing the Series C Preferred Stock and a warrant certificate
representing the Warrant being purchased thereby, in each case against payment
of the purchase price therefor by check, wire transfer, or conversion of
outstanding indebtedness and the execution and delivery by such Purchaser of
signature pages to this Agreement, the Investor Rights Agreement, the Co-Sale
Agreement and the Voting Agreement (each as defined below). Those purchasing in
any Subsequent Closing will be added to Schedule A, and shall be deemed
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"Purchasers" hereunder, "Investors" under the Investor Rights Agreement and the
Co-Sale Agreement, and "Shareholders" under the Voting Agreement. The shares of
Series C Preferred Stock purchased hereunder and issuable upon exercise of the
Warrants shall be considered "Series C Preferred Stock" for purposes of this
Agreement, the Co-Sale Agreement and the Voting Agreement, and "Stock" for
purposes of the Investor Rights Agreement. Purchasers in any Subsequent Closing
will receive an addendum to the Schedule of Exceptions (as defined below) dated
the date of such Subsequent Closing, which addendum shall amend the Schedule of
Exceptions as of such date as set forth in Section 2.
2. Representations and Warranties of the Company. The Company hereby
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represents and warrants to each Purchaser that, as of the applicable Closing
Date, except as set forth on a
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Schedule of Exceptions (the "Schedule of Exceptions") attached hereto as
Schedule B, as the same may be amended in connection with each Closing, which
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exceptions shall be deemed to be representations and warranties as if made
hereunder:
2.1 Organization, Good Standing and Qualification. The Company is a
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corporation duly organized, validly existing and in good standing under the laws
of the State of California, has all requisite corporate power and authority to
carry on its business as now conducted and to enter into this Agreement and all
agreements related thereto. The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which the failure to so qualify would have a material adverse effect on its
financial condition or results of operations.
2.2 Capitalization and Voting Rights. The authorized capital of the
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Company consists, or will consist immediately prior to the Closing, of:
(i) Preferred Stock. 8,165,840 shares of Preferred Stock (the
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"Preferred Stock"), 474,536 of which shares have been designated Series A
Preferred Stock, 437,199 of which are issued and outstanding, 1,545,652 of which
shares have been designated Series B Preferred Stock, 1,422,481 of which are
issued and outstanding, 1,545,652 of which shares have been designated Series B-
1 Preferred Stock, none of which are issued and outstanding, 2,300,000 of which
shares have been designated Series C Preferred Stock, none of which are issued
and outstanding and 2,300,000 of which shares have been designated Series C-1
Preferred Stock, none of which are issued and outstanding. The rights,
privileges and preferences of the Series A Preferred Stock, Series B Preferred
Stock, Series B-1 Preferred Stock, Series C Preferred Stock and Series C-1
Preferred Stock will be as stated in the Company's Restated Articles, in the
case of the Initial Closing, or in the Restated Articles as amended by the
Certificate of Amendment, in the case of any Subsequent Closing.
(ii) Common Stock. 22,000,000 shares of Common Stock, 764,144 of
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which are issued and outstanding.
(iii) The outstanding shares of Common Stock, Series A Preferred
Stock and Series B Preferred Stock are owned by the shareholders and in the
numbers specified in the Capitalization Table attached hereto as Schedule C, as
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the same may be amended in connection with each Closing.
(iv) The outstanding shares of Common Stock, Series A Preferred
Stock and Series B Preferred Stock are all duly and validly authorized and
issued, fully paid and nonassessable, and were issued in accordance with the
registration or qualification provisions of the Securities Act of 1933, as
amended (the "Act") and any relevant state securities laws or pursuant to valid
exemptions therefrom.
(v) Except for (A) the conversion privileges of the Series A
Preferred Stock, Series B Preferred Stock, Series B-1 Preferred Stock, Series C
Preferred Stock and Series C-1 Preferred Stock, (B) 26,666 shares of Series A
Preferred Stock reserved for issuance pursuant to a warrant issued to Venture
Lending with an exercise price of $1.50 per share,
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(C) 19,526 shares of Series B Preferred Stock reserved for issuance pursuant to
a warrant issued to Venture Leasing with an exercise price of $3.38 per share,
(D) 4,733 shares of Series B Preferred Stock reserved for issuance pursuant to a
warrant issued to Venture Lending with an exercise price of $3.38 per share, (E)
an aggregate of 43,869 shares of Series B Preferred Stock reserved for issuance
pursuant to warrants issued to certain individuals with an exercise price of
$3.38 per share, (F) 4,437 shares of Series B Preferred Stock reserved for
issuance pursuant to a warrant issued to Silicon Valley Bank, (G) an aggregate
of 303,620 shares of Series C Preferred Stock to be issued at the Closing upon
conversion of Convertible Subordinated Promissory Notes in the aggregate
principal amount of $1,123,410, (H) an aggregate of 60,720 shares of Series C
Preferred Stock reserved for issuance pursuant to warrants issued to certain
individuals with an exercise price of $3.70 per share, and (I) the rights set
forth in the Investor Rights Agreement (as defined below), there are no
outstanding options, warrants, rights (including conversion or preemptive
rights) or agreements for the purchase or acquisition from the Company of any
shares of its capital stock. In addition to the foregoing, the Company has
reserved (A) 1,050,000 shares of its Common Stock for purchase upon exercise of
options reserved for grant under the Company's 1995 Stock Plan, of which 308,300
shares are subject to options outstanding or committed for issuance, and (B)
sufficient shares of Common Stock for issuance upon conversion of the Series A
Preferred Stock, the Series B Preferred Stock, the Series B-1 Preferred Stock,
the Series C Preferred Stock and the Series C-1 Preferred Stock. Except for the
Second Amended and Restated Voting Agreement of even date herewith, the form of
which is attached hereto as Exhibit C (the "Voting Agreement"), the Company is
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not a party or subject to any agreement or understanding, and, to the best of
the Company's knowledge, there is no agreement or understanding between any
persons and/or entities, which affects or relates to the voting or giving of
written consents with respect to any security or by a director of the Company.
2.3 Subsidiaries. The Company does not presently own or control,
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directly or indirectly, any interest in any other corporation, association, or
other business entity. The Company is not a participant in any partnership.
2.4 Authorization. All corporate action on the part of the
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Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement, the Voting Agreement,
the Third Amended and Restated Investor Rights Agreement of even date herewith,
the form of which is attached hereto as Exhibit D (the "Investor Rights
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Agreement"), the Second Amended and Restated Co-Sale and First Refusal Agreement
of even date herewith, the form of which is attached hereto as Exhibit E (the
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"Co-Sale Agreement"), the performance of all obligations of the Company
hereunder and thereunder, and the authorization, issuance (or reservation for
issuance), sale and delivery of Securities being sold hereunder, the Series C-1
Preferred Stock and the Common Stock issuable upon conversion or exercise
thereof (the "Conversion Shares") has been taken or will be taken prior to the
Closing, and this Agreement, the Investor Rights Agreement, the Voting Agreement
and the Co-Sale Agreement constitute valid and legally binding obligations of
the Company, enforceable in accordance with their respective terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, (iii) to the extent
the indemnification provisions contained in the Investor Rights Agreement may be
limited by applicable federal or state securities laws and
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(iv) with respect to the Voting Agreement, to the extent such agreements
generally are unenforceable under the laws of the State of California.
2.5 Valid Issuance of Preferred Stock, Common Stock and Warrants.
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The Securities being purchased by the Purchasers hereunder, when issued, sold
and delivered in accordance with the terms of this Agreement for the
consideration expressed herein, will be duly and validly issued, fully paid, and
nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under this Agreement, the Investor Rights Agreement,
the Co-Sale Agreement and the Voting Agreement and under applicable state and
federal securities laws. The Common Stock issuable upon conversion of the
Series C Preferred Stock purchased under this Agreement or upon conversion of
the Series C Preferred Stock issuable upon exercise of the Warrants has been
duly and validly reserved for issuance and, upon issuance in accordance with the
terms of the Restated Articles, or in the case of any Subsequent Closing, the
terms of the Restated Articles, as amended by the Certificate of Amendment, or
the terms of the Warrants, as the case may be, will be duly and validly issued,
fully paid, and nonassessable and will be free of restrictions on transfer other
than restrictions on transfer under this Agreement, the Investor Rights
Agreement, the Co-Sale Agreement and the Voting Agreement and under applicable
state and federal securities laws.
2.6 Governmental Consents. No consent, approval, order or
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authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for the filing of the Restated Articles
and, in the case of any Subsequent Closing, the Certificate of Amendment, with
the California Secretary of State, the filing pursuant to Section 25102(f) of
the California Corporate Securities Law of 1968, as amended, and the rules
thereunder and the filing under Regulation D under the Act.
2.7 Offering Valid. Assuming the truth and accuracy of the
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representations and warranties of the Purchasers contained in Section 3 hereof,
the offer, sale and issuance of the Shares and the Conversion Shares will be
exempt from the registration requirements and will have been registered or
qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable state
securities laws. Neither the Company nor any agent on its behalf has solicited
or will solicit any offers to sell or has offered to sell or will offer to sell
all or any part of the Shares to any person or persons so as to bring the sale
of such Shares by the Company within the registration provisions of the
Securities Act.
2.8 Litigation. There is no action, suit, proceeding or
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investigation pending or currently threatened against the Company that questions
the validity of this Agreement, the Investor Rights Agreement, the Co-Sale
Agreement or the Voting Agreement or the right of the Company to enter into such
agreements, or to consummate the transactions contemplated hereby or thereby, or
that would result, either individually or in the aggregate, in any material
adverse changes in the financial condition or results of operations of the
Company. The Company is not a party or subject to the provisions of any order,
writ, injunction, judgment or decree of any court
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or government agency or instrumentality. There is no action, suit, proceeding or
investigation by the Company currently pending or that the Company intends to
initiate.
2.9 Proprietary Information and Assignment of Inventions Agreements.
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Each employee, officer and consultant of the Company has executed a Proprietary
Information and Assignment of Inventions Agreement. The Company is not aware
that any of its officers, directors, consultants or employees is in violation
thereof and will use its best efforts to prevent any such violation.
2.10 Patents and Trademarks. The Company owns and possesses or is
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licensed under all patents, trademarks, service marks, trade names, copyrights,
trade secrets, information, proprietary rights and processes necessary for its
business as now conducted and as proposed to be conducted without any conflict
with or infringement of the rights of others. There are no outstanding options,
licenses, or agreements of any kind relating to the Company's intellectual
property rights, nor is the Company bound by or a party to any options, licenses
or agreements of any kind with respect to the patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information,
proprietary rights and processes of any other person or entity. The Company has
not received any communications alleging that the Company has violated or, by
conducting its business as proposed to be conducted, would violate any of the
patents, trademarks, service marks, trade names, copyrights or trade secrets or
other proprietary rights of any other person or entity. The Company is not
aware that any of its employees is obligated under any contract (including
licenses, covenants or commitments of any nature) or other agreement, or subject
to any judgment, decree or order of any court or administrative agency, that
would interfere with the use of his or her best efforts to promote the interests
of the Company or that would conflict with the Company's business as proposed to
be conducted. Neither the execution nor delivery of this Agreement, the
Investor Rights Agreement, the Co-Sale Agreement or the Voting Agreement nor the
carrying on of the Company's business by the employees of the Company will, to
the Company's knowledge, conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any of such employees is now obligated. The
Company does not believe it is or will be necessary to utilize any inventions of
any of its employees (or people it currently intends to hire) made prior to
their employment by the Company.
2.11 Compliance with Other Instruments. The Company is not in
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violation or default of any provision of its Restated Articles or, in the case
of any Subsequent Closing, its Restated Articles as amended by the Certificate
of Amendment, or its Bylaws, or in any material respect of any instrument,
judgment, order, writ, decree or material contract to which it is a party or by
which it is bound. The execution, delivery and performance of this Agreement,
the Investor Rights Agreement, the Co-Sale Agreement and the Voting Agreement
and the consummation of the transactions contemplated hereby and thereby will
not result in any such violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree or contract or an
event that results in the creation of any lien, charge or encumbrance upon any
assets of the Company or the suspension, revocation, impairment, forfeiture, or
nonrenewal of any material permit, license, authorization, or approval
applicable to the Company, its business or operations or any of its assets or
properties.
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2.12 Agreements; Action.
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(a) There are no instruments, judgments, orders, writs,
agreements, decrees or contracts to which the Company is a party or by which it
is bound (including purchase orders to the Company or placed by the Company)
that may involve (i) obligations (contingent or otherwise) of, or payments to
the Company in excess of $25,000, or (ii) the license of any patent, copyright,
trade secret or other proprietary right to or from the Company, or (iii)
provisions restricting the development or distribution of the Company's products
or services, except those set forth on the Schedule of Exceptions, copies of
which have been provided to special counsel to the Purchasers (the "Contracts").
All of the Contracts are valid, binding and in full force and effect in all
material respects and enforceable by the Company in accordance with their
respective terms in all material respects, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally and (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies. The Company is not in material default
under any of such Contracts. To the best knowledge of the Company, no other
party to any of the Contracts is in material default thereunder.
(b) The Company has not (i) declared or paid any dividends or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) incurred any indebtedness for money borrowed or any
other liabilities individually in excess of $25,000 or, in the case of
indebtedness and/or liabilities individually less than $25,000, in excess of
$50,000 in the aggregate, (iii) made any loans or advances to any person, other
than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights.
(c) For the purposes of subsections (a) and (b) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
2.13 Related-Party Transactions. Except as set forth in the
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Schedule of Exceptions, no employee, officer, director, or, to the Company's
best knowledge, shareholder of the Company or member of his or her immediate
family is indebted to the Company, nor is the Company indebted (or committed to
make loans or extend or guarantee credit) to any of them. To the best of the
Company's knowledge, none of such persons has any direct or indirect ownership
interest in any firm or corporation with which the Company is affiliated or with
which the Company has a business relationship, or any firm or corporation that
competes with the Company, except that employees, officers, or directors of the
Company and members of their immediate families may own stock in publicly traded
companies that may compete with the Company. No employee, officer, or director
of the Company or member of his or her immediate family is directly or
indirectly interested in any material contract with the Company. The Company is
not guarantor or indemnitor of any indebtedness of any other person, firm or
corporation.
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2.14 Permits. The Company has all franchises, permits, licenses,
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and any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could materially and adversely affect the
financial condition or results of operations of the Company, and the Company
believes it can obtain, without undue burden or expense, any similar authority
for the conduct of its business as proposed to be conducted. The Company is not
in default in any material respect under any of such franchises, permits,
licenses, or other similar authority.
2.15 Title to Property and Assets. The Company owns its property
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and assets free and clear of all mortgages, liens, loans and encumbrances,
except such encumbrances and liens that arise in the ordinary course of business
and do not materially impair the Company's ownership or use of such property or
assets and such property and assets are in good working condition. With respect
to the property and assets it leases, the Company is in compliance with such
leases and, to the best of its knowledge, holds a valid leasehold interest free
of any liens, claims or encumbrances. Subject to ordinary wear and tear, all
facilities, machinery, equipment, fixtures, vehicles and other properties owned,
leased or used by the Company are in good operating condition and repair and are
reasonably fit and usable for the purposes for which they are being used.
2.16 Employee Benefit Plans. The Company does not have any Employee
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Benefit Plan as defined in the Employee Retirement Income Security Act of 1974,
as amended.
2.17 Labor Agreements and Actions. The Company is not bound by or
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subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the best of the
Company's knowledge, has sought to represent any of the employees,
representatives or agents of the Company. There is no strike or other labor
dispute involving the Company pending, or to the best of the Company's
knowledge, threatened, that could have a material adverse effect on the
financial condition or results of operations of the Company, nor is the Company
aware of any labor organization activity involving is the employees. The
Company is not aware that any officer or key employee, or that any group of key
employees, intends to terminate their employment with the Company, nor does the
Company have a present intention to terminate the employment of any of the
foregoing. The employment of each officer and employee of the Company is
terminable at the will of the Company and the Company has no Employment
Agreements with any officer or employee.
2.18 Registration Rights. Except as provided in the Investor
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Rights Agreement, the Company has not granted or agreed to grant any
registration rights, including piggyback rights, to any person or entity.
2.19 Financial Statements. The Company has made available to each
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Purchaser the Company's audited balance sheet as of September 30, 1997, and its
audited profit and loss statement for the fiscal year ended September 30, 1997
(the "Financial Statements"). To the Company's knowledge, the Financial
Statements are true and correct in all material respects. Such Financial
Statements have been prepared in good faith in accordance with generally
accepted accounting principles (consistently followed throughout the period
indicated). The
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Financial Statements present fairly the Company's financial position and results
of operations and reflect all material liabilities, contingent or otherwise, at
the date thereof subject where appropriate to normal year-end adjustments.
2.20 Tax Returns and Payments. The Company has filed all tax returns
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and reports as required by law. The Company has paid all taxes and other
assessments shown to be due thereon, except for those for which extensions have
been obtained that are listed in the Schedule of Exceptions.
2.21 Full Disclosure. This Agreement, the Exhibits hereto, the Co-
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Sale Agreement, the Investor Rights Agreement, the Voting Agreement and all
other documents delivered by the Company to the Purchasers or their attorneys or
agents in connection herewith or therewith or with the transactions contemplated
hereby or thereby, as amended for each Closing, do not contain any untrue
statement of a material fact nor, to the Company's knowledge, omit to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. The Company has fully provided each Purchaser with all
the information which such Purchaser has requested for deciding whether to
purchase the Securities and all information that the Company believes is
reasonably necessary to make such decision.
2.22 Compliance with Laws. To its knowledge, the Company is not in
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violation of any applicable statute, rule, regulation, order or restriction of
any domestic or foreign government or any instrumentality or agency thereof in
respect of the conduct of its business or the ownership of its properties which
violation would materially and adversely affect the business, assets,
liabilities, financial condition, operations or prospects of the Company. No
governmental orders, permissions, consents, approvals or authorizations are
required to be obtained and no registrations or declarations are required to be
filed in connection with the execution and delivery of this Agreement and the
issuance of the Shares or the Conversion Shares, except such as has been duly
and validly obtained or filed, or with respect to any filings that must be made
after the Closing, as will be filed in a timely manner.
2.23 Obligations of Management. Each officer of the Company is
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currently devoting one hundred percent (100%) of his business time to the
conduct of the business of the Company. The Company is not aware of any officer
or key employee of the company planning to work less than full time at the
Company in the future.
2.24 Insurance. The Company has in full force and effect fire and
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casualty insurance policies and insurance against other hazards, risks and
liabilities to persons and property to the extent and in the manner customary
for companies in similar businesses similarly situated.
2.25 Qualified Small Business. The Company qualifies as a "Qualified
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Small Business" as defined in Section 1202(d) of the Internal Revenue Code of
1986, as amended (the "Code").
2.26 Small Business Concern. The Company, together with its
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affiliates (as that term is defined in 13 C.F.R. (S)121.103), is a "small
business concern" within the meaning of
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the Small Business Investment Act of 1958, as amended, and the regulations
promulgated thereunder (the "Small Business Investment Act") and Part 121 of
Title 13 of the United States Code of Federal Regulations ("CFR"). The
information provided by the Company to each Purchaser that is a licensed Small
Business Investment Company (each, an "SBIC Purchaser") on Small Business
Administration ("SBA") Forms 480, 652 and 1031 delivered in connection herewith
is accurate and complete in all material respects.
2.27 Not An Investment Company. The Company is not an investment
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company within the meaning of the Investment Company Act of 1940, as amended.
2.28 Changes in Conditions. Since September 30, 1997, and other than
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as provided in the Schedule of Exception, there has not been to the Company's
knowledge:
a. Any change in the assets, liabilities, financial condition
or operations of the Company from that reflected in the Financial Statements,
other than changes in the ordinary course of business, none of which
individually or in the aggregate has had or is expected to have a material
adverse effect on such assets, liabilities, financial condition or operations of
the Company;
b. Any resignation or termination of any key officers of the
Company; and the Company, to the best of its knowledge, does not know of the
impending resignation or termination of employment of any such officer;
c. Any material change, except in the ordinary course of
business, in the contingent obligations of the Company by way of guaranty,
endorsement, indemnity, warranty or otherwise;
d. Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, business or
prospects or financial condition of the Company;
e. Any waiver by the Company of a material right or of a
material debt owed to it;
f. Any direct or indirect loans made by the Company to any
shareholder, employee, officer or director of the Company, other than advances
made in the ordinary course of business;
g. Any material change in any compensation arrangement or
agreement with any employee, officer, director or shareholder;
h. Any declaration or payment of any dividend or other
distribution of the assets of the Company;
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i. Any debt, obligation or liability incurred, assumed or
guaranteed by the Company, except those for immaterial amounts and for current
liabilities incurred in the ordinary course of business;
j. Any change in any material agreement to which the Company is
a party or by which it is bound which materially and adversely affects the
business, assets, liabilities, financial condition, operations or prospects of
the Company, including compensation agreements with the Company's employees; or
k. Any other event or condition of any character that, either
individually or cumulatively, has materially and adversely affected the
business, assets, liabilities, financial condition, operations or prospects of
the Company.
2.29 Corporate Documents, Minute Books. Except for amendments
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necessary to satisfy representations and warranties or conditions contained
herein (the form of which amendments has been approved by the Purchasers), the
Restated Articles, Certificate of Amendment and Bylaws of the Company are in the
form provided to the Purchasers upon their request. The minute books of the
Company provided to the Purchasers upon their request contain a complete summary
of all meetings of directors and shareholders since the time of incorporation of
the Company.
2.30 Real Property Holding Corporation. The Company is not a "real
---------------------------------
property holding corporation" within the meaning of Section 897(c)(2) of the
Internal Revenue Code of 1986, as amended.
3. Representations and Warranties of the Purchasers. Each Purchaser
------------------------------------------------
hereby represents and warrants, severally, that:
3.1 Authorization. Such Purchaser has full power and authority to
-------------
enter into this Agreement, the Investor Rights Agreement, the Co-Sale Agreement
and the Voting Agreement and each such Agreement constitutes its valid and
legally binding obligation, enforceable in accordance with its terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, and (iii) to the
extent the indemnification provisions contained in the Investor Rights Agreement
may be limited by applicable federal or state securities laws and (iv) with
respect to the Voting Agreement, to the extent such agreements generally are
unenforceable under the laws of the State of California.
3.2 Purchase Entirely for Own Account. This Agreement is made with
---------------------------------
such Purchaser in reliance upon such Purchaser's representation to the Company,
which by such Purchaser's execution of this Agreement such Purchaser hereby
confirms, that the Securities, the Series C Preferred Stock issuable upon
exercise of the Warrants and the Common Stock issuable upon conversion of the
Series C Preferred Stock purchased hereunder or issuable upon conversion of the
Series C Preferred Stock issuable upon exercise of the Warrants (collectively,
the "Shares") will be acquired for investment for such Purchaser's own account,
not as a
-11-
nominee or agent, and not with a view to the resale or distribution of any part
thereof, and that such Purchaser has no present intention of selling, granting
any participation in, or otherwise distributing the same. By executing this
Agreement, such Purchaser further represents that such Purchaser does not have
any contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with
respect to any of the Shares.
3.3 Disclosure of Information. Such Purchaser believes it has
-------------------------
received all the information it considers necessary or appropriate for deciding
whether to purchase the Securities. Such Purchaser further represents that it
has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Securities and the
business, properties, prospects, financial condition and results of operations
of the Company.
3.4 Investment Experience. Such Purchaser is an investor in
---------------------
securities of companies in the development stage and acknowledges that he is
able to fend for himself, can bear the economic risk of his investment, and has
such knowledge and experience in financial or business matters that he is
capable of evaluating the merits and risks of the investment in the Securities.
If other than an individual, Purchaser also represents it has not been organized
for the purpose of acquiring the Securities.
3.5 Accredited Investor. Such Purchaser is an "accredited investor"
-------------------
within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of
Regulation D under the Act, as presently in effect.
3.6 Restricted Securities. Such Purchaser understands that the
---------------------
Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act only in certain limited circumstances. In this connection, such
Purchaser represents that it is familiar with SEC Rule 144, as presently in
effect, and understands the resale limitations imposed thereby and by the Act.
3.7 Further Limitations on Disposition. Without in any way
----------------------------------
limiting the representations set forth above, such Purchaser further agrees not
to make any disposition of all or any portion of the Securities unless and until
the transferee has agreed in writing for the benefit of the Company to be bound
by this Section 3, the Investor Rights Agreement, the Co-Sale Agreement and the
Voting Agreement and:
(a) There is then in effect a Registration Statement under the
Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
(b) (i) Such Purchaser shall have notified the Company of the
proposed disposition and shall have furnished the Company, if reasonably
requested by the Company, with an opinion of counsel, reasonably satisfactory to
the Company that such
-12-
disposition will not require registration of such shares under the Act. It is
agreed that the Company will not require opinions of counsel for transactions
made pursuant to Rule 144 except in unusual circumstances.
(c) Notwithstanding the provisions of paragraphs (a) and (b)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer by a Purchaser that is a partnership to an affiliated partnership
or to a partner of such partnership or affiliated partnership or a retired
partner of such partnership or affiliated partnership who retires after the date
hereof, or to the estate of any such partner or retired partner or the transfer
by gift, will or intestate succession of any partner to his or her spouse or to
the siblings, lineal descendants or ancestors of such partner or his or her
spouse, if the transferee agrees in writing to be subject to the terms hereof to
the same extent as if he or she were an original Purchaser hereunder.
3.8 Legends. It is understood that the certificates evidencing the
-------
Shares may bear one or all of the following legends:
(a) "These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in effect
with respect to the securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not required or unless
sold pursuant to Rule 144 of such Act."
(b) Any legend required by the laws of the State of California,
including any legend required by the California Department of Corporations and
Sections 417 and 418 of the California Corporations Code.
4. California Commissioner of Corporations.
---------------------------------------
4.1 Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE
------------------------
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO
EXEMPT.
5. Conditions of Purchaser's Obligations at Closing. The obligations of
------------------------------------------------
each Purchaser under this Agreement are subject to the fulfillment on or before
the applicable Closing Date of each of the following conditions:
5.1 Representations and Warranties. Subject to any Schedule of
------------------------------
Exceptions delivered to Purchasers in connection with each applicable Closing,
the representations and warranties of the Company contained in Section 2 shall
be true on and as of the applicable
-13-
Closing Date with the same effect as though such representations and warranties
had been made on and as of such Closing Date.
5.2 Performance. The Company shall have performed and complied with
-----------
all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the applicable
Closing Date.
5.3 Compliance Certificate. The President of the Company shall
----------------------
deliver to each Purchaser at the Closing a certificate stating that the
conditions specified in Sections 5.1 and 5.2 have been fulfilled.
5.4 Qualifications. All authorizations, approvals, or permits, if
--------------
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Securities pursuant to this Agreement shall be duly obtained and effective
as of the applicable Closing Date.
5.5 Proceedings and Documents. All corporate and other proceedings
-------------------------
in connection with the transactions contemplated at the applicable Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to the Purchasers or to the Purchasers' special counsel, and they
shall have received all such counterpart original and certified or other copies
of such documents as they may reasonably request.
5.6 Restated Articles. The Company shall have filed the Restated
-----------------
Articles with the Secretary of State of California and, in the case of any
Subsequent Closing, the Company shall have filed the Certificate of Amendment
with the Secretary of State of California.
5.7 Board of Directors. The directors of the Company shall consist
------------------
of two members to be elected by the holders of a majority of the Common Stock,
whose initial designees shall be Xxxx Xxxxxxxxxxx and Xxxxxxx X. Xxxxx, one
member to be elected by the holders of a majority of the Series A Preferred
Stock, whose initial designee shall be Xxxxxx Xxxxxx, two members to be elected
by the holders of a majority of the Series B and B-1 Preferred Stock, whose
initial designees shall be Xxxxxxx Xxxxxx and Xxxxxxx Xxxxx and one member to be
elected by the holders of a majority of the Series C and C-1 Preferred Stock,
whose initial designee shall be Xxxxxx Xxxxxxxx.
5.8 Opinion of Company Counsel. Each Purchaser shall have received
--------------------------
from Venture Law Group, counsel for the Company, an opinion, dated as of the
applicable Closing Date, in the form attached hereto as Exhibit F.
5.9 Investor Rights Agreement. The Purchasers shall have been added
-------------------------
as "Investors" under the Investor Rights Agreement.
5.10 Co-Sale Agreement. The Purchasers shall have been added as
-----------------
"Investors" under the Co-Sale Agreement.
5.11 Voting Agreement. The Purchasers shall have been added as
----------------
"Parties" under the Voting Agreement.
-14-
5.12 SBA Documents. The Company shall have executed and delivered to
-------------
each SBIC Purchaser a Size Status Declaration on SBA Form 480 and an Assurance
of Compliance on SBA Form 652, and shall have provided to each such Purchaser
information necessary for the preparation of a Portfolio Financing Report on SBA
Form 1031.
5.13 Settlement Agreement. The Company and the Initial Purchasers
--------------------
shall have executed and delivered the Settlement Agreement, Release and Covenant
Not to Xxx in the form attached hereto as Exhibit G (the "Settlement
Agreement").
6. Conditions of the Company's Obligations at Closing. The obligations of
--------------------------------------------------
the Company to each Purchaser under this Agreement are subject Company's
Obligations at to the fulfillment on or before the applicable Closing Date of
each of the following Closing conditions by that Purchaser:
6.1 Representations and Warranties. The representations and
------------------------------
warranties of the Purchaser contained in Section 3 shall be true on and as of
the applicable Closing Date with the same effect as though such representations
and warranties had been made on and as of the applicable Closing Date.
6.2 Payment of Purchase Price. The Purchaser shall have delivered
-------------------------
the purchase price specified in Section 1.1 .
6.3 Qualifications. All authorizations, approvals, or permits, if
--------------
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Securities pursuant to this Agreement shall be duly obtained and effective
as of the applicable Closing Date.
6.4 Settlement Agreement. Each of the Initial Purchasers shall have
--------------------
executed and delivered the Settlement Agreement.
7. Covenants of Company.
--------------------
7.1 Board Observer Rights. The holders of at least 750,000 shares of
---------------------
Series C Preferred Stock (appropriately adjusted for stock dividends, stock
splits, reverse stock splits, and capitalizations or similar transactions) shall
each be entitled to designate a representative to attend all meetings of the
Company's Board of Directors in a non-voting observer capacity, and, in this
respect, the Company shall give each of them copies of all notices, minutes,
consents and other materials that it provides to its directors; provided,
however, that each such holder agrees to hold in confidence and trust all
information so provided and to execute standard confidentiality agreements with
respect to such information if requested to do so by the Company. Holders of at
least 250,000 shares of Series C Preferred Stock (appropriately adjusted for
stock dividends, stock splits, reverse stock splits, recapitalizations or
similar transactions) shall be entitled to receive copies of all materials
distributed to the Board of Directors; provided, however, that each such holder
agrees to hold in confidence and trust all information so provided and to
execute standard confidentiality agreements with respect to such information if
requested to do so by the Company.
-15-
7.2. Compliance with Small Business Investment Act. The Company agrees
---------------------------------------------
to provide each SBIC Purchaser with sufficient information to permit each such
Purchaser to comply with its obligations under the Small Business Investment
Act; provided however, each SBIC Purchaser agrees that it will protect any
information which the Company labels as confidential. Within 90 days following
each Closing and within 90 days after the end of each calendar year during which
the proceeds from the sale of the Securities are being applied, the Company
shall provide to each SBIC Purchaser upon request a certificate of its chief
financial officer describing the use of such proceeds is in accordance with
Section 7.5 below. The Company shall provide each SBIC Purchaser and the SBA
reasonable access to the Company's books and records for the purpose of
confirming the use of the proceeds received hereunder.
7.3 Use of Proceeds. The Company agrees to use the investment proceeds
---------------
from each SBIC Purchaser for working capital purposes or to otherwise finance
the anticipated growth of the Company, and not for any purpose for which a small
business concern is prohibited from providing funds pursuant to 13 CFR Part
107.720. If the Company shall, without the consent of each SBIC Purchaser, use
the proceeds from the securities purchased hereunder for a purpose not described
above, each SBIC Purchaser may demand that the Company repurchase its securities
purchased hereunder at a price equal to the purchase price paid for such
securities as required by SBA Regulation Section 107.305.
7.4 Business Activity. For a period of one year following the Initial
-----------------
Closing, the Company shall not change the nature of its business activity if
such change would render the Company ineligible as a small business concern. The
Company acknowledges and agrees that upon any breach of the covenant set forth
in this Section 7.4, each SBIC Purchaser shall be entitled (in addition to all
of its other rights and remedies, including the right to xxx for damages) to
require rescission of this Agreement and immediate repayment in full of the
purchase price for the securities purchased by such SBIC Purchaser hereunder.
7.5 Non-Discrimination Compliance. So long as an SBIC Purchaser holds
-----------------------------
any securities of the Company, the Company will at all times comply with the
non-discrimination requirements of 13 C.F.R. Parts 112, 113 and 117.
7.6 Qualified Small Business Stock. The Company covenants that so long
------------------------------
as any of Securities or the Series C-1 Preferred Stock or Common Stock into
which such Securities are converted or exercised, as the case may be, are held
by a SBIC Purchaser (or a transferee in whose hands such Securities, Series C-1
Preferred Stock or Common Stock are eligible to qualify as Qualified Small
Business Stock as defined in Section 1202(c) of the Code), it will use its
reasonable efforts (including complying with any applicable filing or reporting
requirements imposed by the Code on issuers of Qualified Small Business Stock)
to cause the Securities, Series C-1 Preferred Stock or the Common Stock into
which such shares are converted or exercised, as the case may be, to qualify as
Qualified Small Business Stock; provided, however, that "reasonable efforts" as
used in this Section 7.6 shall not be construed to require the Company to
operate its business in a manner which would adversely affect its business,
limit its future prospects or alter the timing or resource allocation related to
its planned operations or financing activities.
-16-
8. Finder's Fee. Each Purchaser agrees to indemnify and to hold harmless
------------
the Company from any liability for any commission or compensation in the nature
of a finders' fee (and the costs and expenses of defending against such
liability or asserted liability) for which such Purchaser or any of its
officers, partners, employees, or representatives is responsible. The Company
agrees to indemnify and hold harmless each Purchaser from any liability for any
commission or compensation in the nature of a finders' fee (and the costs and
expenses of defending against such liability or asserted liability) for which
the Company or any of its officers, employees or representatives is responsible.
9. Miscellaneous.
-------------
9.1 Survival of Warranties. The warranties, representations and
----------------------
covenants of the Company and Purchasers contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing.
9.2 Successors and Assigns. Except as otherwise provided herein,
----------------------
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any Securities). Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
9.3 Governing Law. This Agreement shall be governed by and
-------------
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
9.4 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.5 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.6 Notices.
-------
(a) All notices, requests, demands and other communications
under this Agreement or in connection herewith shall be given to or made upon
the respective parties as follows:
To the Company: WorldRes, Inc.
00 Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-17-
Attention: Xxxxxxx X. Xxxxx
with a copy to:
Venture Law Group
A Professional Corporation
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxx
To a Purchaser: At such Purchaser's address as provided to the Company.
(b) All notices, requests, demands and other communications
given or made in accordance with the provisions of this Agreement shall be in
writing, and shall be sent by airmail, return receipt requested, or by telex or
telecopy (facsimile) with confirmation of receipt, and shall be deemed to be
given or made when receipt is so confirmed.
(c) Any party may, by written notice (in accordance with this
Section 9.6) to the other, alter its address.
9.7 Amendments and Waivers. Any term of this Agreement may be
----------------------
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
at least sixty percent (60%) of the Common Stock issued or issuable upon
conversion of the issued shares of Series C Preferred Stock; provided, however,
that no such waiver or amendment shall reduce the aforesaid proportion of Series
C Preferred Stock, the holders of which are required to consent to any waiver or
supplemental agreement, without the consent of the record holders of all of the
issued shares of Series C Preferred Stock. Upon the effectuation of each such
waiver or amendment, the Company shall promptly give written notice thereof to
the record holders of the issued shares of Series C Preferred Stock who have not
previously consented thereto in writing. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any
securities purchased under this Agreement at the time outstanding (including
securities into which such securities are convertible), each future holder of
all such securities, and the Company.
9.8 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
-18-
9.9 Aggregation of Stock. All shares of the Preferred Stock held or
--------------------
acquired by affiliated entities or persons shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement.
9.10 Expenses. The Company and each Purchaser shall each bear its
--------
respective expenses and legal fees incurred with respect to this Agreement and
the transactions contemplated hereby provided that the Company shall pay the
reasonable fees and expenses of one counsel to the Purchasers not to exceed
Fifteen Thousand Dollars ($15,000).
9.11 Delays or Omissions. No delay or omission to exercise any right,
-------------------
power or remedy accruing to the Company or to any holder of any securities
issued or to be issued hereunder shall impair any such right, power or remedy of
the Company or such holder, nor shall it be construed to be a waiver of any
breach or default under this Agreement, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring; nor shall any delay or
omission to exercise any right, power or remedy or any waiver of any single
breach or default be deemed a waiver of any other right, power or remedy or
breach or default theretofore or thereafter occurring. All remedies, either
under this Agreement, or by law otherwise afforded to the Company or any holder,
shall be cumulative and not alternative.
[SIGNATURE PAGES FOLLOW]
-19-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
WORLDRES, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------
Xxxxxxx X. Xxxxx, President
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS:
Apax Partners & Co. Beteiligungsberatung AG
Printed Name:
Xxx Xxxxxx-Xxxxxxxx
---------------------------------------------
Signature: /s/ Xxx Xxxxxx-Xxxxxxxx
----------------------------------
Title (if applicable): Partner
----------------------
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS:
Printed Name:
Bayview Investors, Ltd
---------------------------------------------
Signature: /s/ Illegible
-----------------------------------
Title (if applicable): Chief Financial Officer
-----------------------
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS:
Printed Name:
Xx. Xxxxxxx Beteiligungsgesellschaft HBG
----------------------------------------
Signature: /s/ Illegible
-----------------------------
Title (if applicable): Pres.
-----------------
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS:
Printed Name:
Xxxx Xxxxxxx
--------------------------------------
Signature: /s/ Xxxx Xxxxxxx
---------------------------
Title (if applicable):________________
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS:
Printed Name:
Xxxxx Xxxxxxx Investment Partnership No. 5, L.P.
------------------------------------------------
Signature: /s/ Xxxx X. Xxxxx
-------------------------------------
Xxx X. Xxxxx
Title (if applicable): Executive Vice President,
-------------------------
Secretary-Treasurer
FSI No. 2 Corporation,
General Partner
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS:
Printed Name:
Xxxx Xxxx
--------------------------------------
Signature: /s/ X. Xxxx
---------------------------
Title (if applicable):________________
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS
Printed Name:
XXX XXXXX
------------------------------------
Signature: /s/ Xxx Xxxxx
-------------------------
Title (if applicable):______________
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS
Printed Name:
Dr. XXXXX XXX
------------------------------------
Signature: /s/ Dr. Xxxxx Xxx
-------------------------
Title (if applicable):______________
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS
Printed Name:
XXXXXX X. XXXXXX, Xx.
------------------------------------
Signature: /s/ Xxxxxx X. Xxxxxx
-------------------------
Title (if applicable):______________
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS
Net Partners Limited
Printed Name:
XXXXXX XXXX
----------------------------------------
Signature: /s/ Xxxxxx Xxxx
-----------------------------
Title (if applicable): Managing Director
-----------------
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS
Printed Name:
NOMINA S.A.
----------------------------------------
Signature: /s/ Xxxx Xxxxx
-----------------------------
Title (if applicable): Managing Director
-----------------
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS
Printed Name:
XXXXXX XXXXXX
------------------------------------
Signature: /s/ Xxxxxx Xxxxxx
-------------------------
Title (if applicable):______________
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS
Printed Name:
XXXX XXXXXX
-------------------------------------------
Signature: /s/ Xxxx Xxxxxx
--------------------------------
Title (if applicable): Vice President
--------------------
Xxxxx Xxxxxxx Technology Capital SBIC, L.P.
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS
Printed Name:
XXXXXXX XXXXX
------------------------------------
Signature: /s/ Xxxxxxx Xxxxx
-------------------------
Title (if applicable):______________
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS
Printed Name:
XXXXXXX XXXXX
--------------------------------------------
Signature: /s/ Xxxxxxx Xxxxx
---------------------------------
Title (if applicable): CEO, Scripps Ventures
---------------------
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS
Technology Fund II Pte Ltd
Printed Name:
TAN XXXX XXX
------------------------------------
Signature: /s/ Tan Xxxx Xxx
-------------------------
Title (if applicable): Director
-------------
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS
Technology Funding Partners III, L.P.
By: Technology Funding Inc.,
Its: Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx, Vice President
Technology Funding Partners IV,
an Aggressive Growth Fund, L.P.
By: Technology Funding Inc.,
Its: Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx, Vice President
Technology Funding Partners V,
an Aggressive Growth Fund, L.P.
By: Technology Funding Inc.,
Its: Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx, Vice President
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS
Printed Name:
____________________________________
Signature:
__________________________
Title (if applicable):______________
VLG Investments 1997
By: /s/ Xxxx Xxxxxxxxx
--------------------------------
Xxxx X. Xxxxxxxxx
Title: Partner
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS
Xxxxxx EDB Partners, X.X.
Xxxxxx Japan Partners, L.P.
Printed Name:
LIP-BU TAN
------------------------------------
Signature: /s/ Lip-Bu Tan
-------------------------
Title (if applicable):______________
PURCHASERS
Xxxxxx Media Information and Technology Fund, X.X.
Xxxxxx Technology Ventures II, X.X.
Xxxxxx-SBIC, L.P.
Printed Name:
XXXXXX X. XXXXXXXX
--------------------------------------
Signature: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Title (if applicable): GP
----------------
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS
Printed Name:
XXXXXX X. XXXXXXXXX
-------------------------------------
Signature: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------
Title (if applicable):_______________
SIGNATURE PAGE TO WORLDRES, INC.
AMENDED AND RESTATED SERIES C PREFERRED STOCK PURCHASE AGREEMENT
SCHEDULE A
----------
SCHEDULE OF PURCHASERS
----------------------
--------------------------------------------------------------
Initial Closing on December 30, 1997 CONSIDERATION
----------------------------------------------------------------------------------------------------------------------------
NO. WARRANT
NO. WARRANT PURCHASE
PURCHASER SHARES SHARES NOTES/(1)/ CASH PRICE TOTAL
----------------------------------------------------------------------------------------------------------------------------
Bayview Investors, Ltd. 9,828 1,178 $ 36,363.60 $ 0 $ 11.78 $ 36,375.38
x/x Xxxxxxxxx Xxxxxxxx & Xx.
Xxxx: Xxxxxxxx Xxxxxxxx
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
----------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxx Investment 252,887 30,313 $ 187,500.00 $ 748,181.90 $ 303.13 $ 935,985.03
Partnership Xx. 0, X.X.
x/x Xxxxx Xxxxxxx & Xx.
Xxxx: Xxxxx Xxxxxxxx
0 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
----------------------------------------------------------------------------------------------------------------------------
Xxx Xxxxx 32,432 3,887 $ 119,998.40 $ 0 $ 38.87 $ 120,037.27
c/x Xxxxx Enterprises
00000 XxXxxxx Xxxxx
Xxx Xxxxx Xxxxx, XX 00000
----------------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx, Xx. 27,027 3,239 $ 99,999.90 $ 0 $ 32.39 $ 100,032.29
000 Xxxxxx Xxx
[P.O. Box 620065]
Xxxxxxx Xxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx 1,351 161 $ 0 $ 4,998.70 $ 1.61 $ 5,000.31
c/o Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxx Technology Capital 270,270 32,397 $ 0 $ 999,999.00 $ 323.97 $1,000,322.97
SBIC, L.P.
c/o Xxxxx Xxxxxxx Ventures
Attn: Xxxx X. Xxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------------
Scripps Ventures, LLC 101,351 12,148 $ 374,998.70 $ 0 $ 121.48 $ 375,120.18
Attn: Xxxx Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------------
Technology Funding Partners III, 139,358 16,704 $ 140,625.00 $ 374,999.60 $ 167.04 $ 515,791.64
L.P.
Attn: Xxxxxxx Xxxxxx
0000 Xxxxxxx xx xxx Xxxxxx
Xxx Xxxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------------
Technology Funding Venture 62,077 7,441 $ 42,187.50 $ 187,497.40 $ 74.41 $ 229,759.31
Partners IV, an Aggressive Growth
Fund, L.P.
Attn: Xxxxxxx Xxxxxx
0000 Xxxxxxx xx xxx Xxxxxx
Xxx Xxxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------------
Technology Funding Venture 51,942 6,226 $ 4,687.50 $ 187,497.90 $ 62.26 $ 192,247.66
Partners V, an Aggressive Growth
Fund, L.P.
Attn: Xxxxxxx Xxxxxx
0000 Xxxxxxx xx xxx Xxxxxx
Xxx Xxxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------------
__________________________________
(1)Consideration listed in this column represents conversion of outstanding
principal amounts payable under Convertible Promissory Notes dated October 10,
1997.
--------------------------------------------------------------
Initial Closing on December 30, 1997 CONSIDERATION
----------------------------------------------------------------------------------------------------------------------------
NO. WARRANT
NO. WARRANT PURCHASE
PURCHASER SHARES SHARES NOTES/(1)/ CASH PRICE TOTAL
----------------------------------------------------------------------------------------------------------------------------
VLG Investments 1997 4,054 485 $ 0 $ 14,999.80 $ 4.85 $ 15,004.65
c/o Venture Law Group
Attn: Xxxxx Xxxxxxx
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx EDB Partners, L.P. 27,027 3,239 $ 0 $ 99,999.90 $ 32.39 $ 100,032.29
c/x Xxxxxx
Attn: Xxxxxxx Xxxx
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx Japan Partners, L.P. 27,027 3,239 $ 0 $ 99,999.90 $ 32.39 $ 100,032.29
c/x Xxxxxx
Attn: Xxxxxxx Xxxx
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx Media Information and 540,540 64,794 $ 0 $1,999,998.00 $ 647.94 $2,000,645.94
Technology Fund, L.P.
c/x Xxxxxx
Attn: Xxxxxxx Xxxx
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx Technology Ventures II, L.P. 43,243 5,183 $ 0 $ 159,999.10 $ 51.83 $ 160,050.93
c/x Xxxxxx
Attn: Xxxxxxx Xxxx
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx-SBIC, L.P. 172,972 20,734 $ 0 $ 639,996.40 $ 207.34 $ 640,203.74
c/x Xxxxxx
Attn: Xxxxxxx Xxxx
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxxxx 1,093 131 $ 4,044.10 $ 0 $ 1.31 $ 4,045.41
c/x XxXxxx Xxxxxxx & Co.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------------
TOTAL: 1,764,479 211,499 $1,010,404.70 $5,518,167.60 $2,114.99 $6,530,687.29
---------------------------------------------------------------------------------------------------------------------------
-2-
---------------------------------------------------------
Subsequent Closing on March 16, 1998 CONSIDERATION
------------------------------------------------------------------------------------------------------------------------------
WARRANT
NO. NO. WARRANT PURCHASE
PURCHASER SHARES SHARES NOTES /(2)/ CASH PRICE TOTAL
------------------------------------------------------------------------------------------------------------------------------
Apax Partners & Co. 67,559 8,098 $ 0 $ 249,968.30 $ 80.98 $ 250,049.28
Beteiligungsberatung AG
Attn: Xxx Xxxxxx-Xxxxxxxx and
Xxxxx Blumenwitz
Xxxxxxxxxxxxxx 00
XX-0000 Xxxxxxxx
Xxxxxx, Xxxxxxxxxxx
------------------------------------------------------------------------------------------------------------------------------
Bayview Investors, Ltd. 8,326 998 $ 0 $ 30,806.20 $ 9.98 $ 30,816.18
x/x Xxxxxxxxx Xxxxxxxx & Xx.
Xxxx: Xxxxxxxx Xxxxxxxx
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
------------------------------------------------------------------------------------------------------------------------------
Xx. Xxxxxxx 41,887 5,021 $ 0 $ 154,981.90 $ 50.21 $ 155,032.11
Beteiligungsgesellschaft mbH&Co
KG (HBG)
Xxxxxxxxxxxxxx 00
00000 Xxxxx
Xxxxxxx
------------------------------------------------------------------------------------------------------------------------------
Xxxx X. Xxxxxxx, Xx. 27,027 3,239 $ 99,999.90 $ 0 $ 32.39 $ 100,032.29
000 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
------------------------------------------------------------------ ---------------------------------------------------------
Xxxxx Xxxxxxx Investment 67,567 8,099 $ 0 $ 249,997.90 $ 80.99 $ 250,078.89
Partnership Xx. 0, X.X.
x/x Xxxxx Xxxxxxx & Xx.
Xxxx: Xxxxx Xxxxxxxx
0 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxx 3,513 421 $ 12,998.10 $ 0 $ 4.21 $ 13,002.31
0 Xxxxxxx'x Xxxxx
Xxxxxxxxx, XX 00000
------------------------------------------------------------------------------------------------------------------------------
Dr. Xxxxx Xxx 13,509 1,619 $ 0 $ 49,983.30 $ 16.19 $ 49,999.49
x/x Xxxxx,
Xxxxxxxxxx. 0
00000 Xxxx-Xxx Xxxxxxxxx
Xxxxxxx
------------------------------------------------------------------------------------------------------------------------------
Net Partners Limited 135,135 16,198 $ 0 $ 499,999.50 $161.98 $ 500,161.48
x/x Xxxxx Xxxx Services
World Trade Center
Tower B 17th Floor Strawinskylaan
1725
1077 XX Amsterdam
The Netherlands
------------------------------------------------------------------------------------------------------------------------------
Nomina SA (Luxemburg) 13,513 1,619 $ 0 $ 49,998.10 $ 16.19 $ 50,014.29
Attn: Xxxx Xxxxx
XX Xxx 000
X-0000 Xxxxxxxxx
------------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx 6,000 719 $ 0 $ 22,200.00 $ 7.19 $ 22,207.19
000 Xxxx Xxxxxx
Xxx Xxxxx, XX 00000
------------------------------------------------------------------------------------------------------------------------------
Technology Fund II Pte Ltd, 135,135 16,198 $ 0 $ 499,999.50 $161.98 $ 500,161.48
Singapore
Attn: Tahn Xxx Xxxx
00 Xxxxxxx Xxxx Xxxx
#00-00 Xxx Xxxxxxxx
Xxxxxxx Xxxx XX
Xxxxxxxxx 000000
------------------------------------------------------------------------------------------------------------------------------
TOTAL: 519,171 62,229 $112,998.00 $1,807,934.70 $622.29 $1,921,554.99
------------------------------------------------------------------------------------------------------------------------------
___________________________
(2) Consideration listed in this column represents conversion of outstanding
principal amounts payable under Convertible Promissory Notes dated October 10,
1997 and October 27, 1997.
-3-
EXHIBIT B
FORM OF WARRANT
---------------
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THIS
WARRANT AND RESTRICTING ITS TRANSFER MAY BE OBTAINED AT NO COST
BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS WARRANT
TO THE SECRETARY OF THE CORPORATION.
WORLDRES, INC.
WARRANT TO PURCHASE
SERIES C PREFERRED STOCK
Warrant No.: (Cert No) Issue Date: (Issue Date)
WorldRes, Inc. (the "Company"), for value received, hereby certifies that
-------
(Holder), or its assigns ("Holder"), is entitled to purchase from the Company,
------
at any time after the date hereof and on or before the Expiration Date (as
defined in Section 8), up to (No Shares) ("No Shares Spelled") shares of Series
C Preferred Stock of the Company (the "Preferred Stock"), at a purchase price of
---------------
$4.63 per share. The shares of the Company's Series C Preferred Stock for which
this Warrant is exercisable are referred to herein as the "Warrant Shares" and
--------------
the per share purchase price of such Warrant Shares is referred to herein as the
"Stock Purchase Price." This Warrant may be exercised at any time, or from time
--------------------
to time, after the date hereof and on or before the Expiration Date. The Stock
Purchase Price and the Warrant Shares are subject to adjustment as provided in
Section 4. This Warrant is one of a series of warrants issued pursuant to that
certain Amended and Restated Series C Preferred Stock and Warrant Purchase
Agreement dated March 16, 1998 (the "Agreement").
---------
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment for Shares. This Warrant
------------------------------------------------------
is exercisable at the option of Holder, at any time or from time to time, on or
before the Expiration Date, for all or any part of the Warrant Shares (but not
for a fraction of a share), upon surrender to the Company at its principal
office at 00 Xxxxx, Xxxxx 000, Xxx Xxxxx, XX 00000 (or at such other location as
the Company may advise Holder in writing) of this Warrant properly endorsed with
the Form of Subscription attached hereto as Exhibit A duly completed and signed
---------
and upon payment in cash or by check (unless this Warrant is being converted
pursuant to Section 2) of the aggregate Stock Purchase Price for the number of
Warrant Shares for which this Warrant is being exercised. The Company agrees
that the Warrant Shares purchased under this Warrant shall be and are deemed to
be issued to Holder as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered and
payment shall have been made for such shares. Certificates for the Warrant
Shares so purchased, together with any other securities or property to which
Holder is entitled upon such exercise, shall be delivered to Holder by the
Company at the Company's expense within a reasonable time after the rights
represented by this Warrant have been so exercised. In case of a purchase of
less than all the
Warrant Shares, the Company shall cancel this Warrant and execute and deliver a
new Warrant or Warrants of like tenor for the balance of the Warrant Shares
purchasable under the Warrant surrendered upon such purchase to Holder within a
reasonable time after the date of such surrender. Each stock certificate so
delivered shall be in such denominations as may be requested by Holder and shall
be registered in the name of Holder or such other name as shall be designated by
Holder.
2. Conversion of Warrant.
---------------------
2.1 Right to Convert. In addition to, and without limiting, the
----------------
other rights of the Holder hereunder, the Holder shall have the right (the
"Conversion Right") to convert this Warrant or any part hereof into Warrant
----------------
Shares at any time and from time to time during the term hereof. Upon exercise
of the Conversion Right, the Company shall deliver to the Holder, without
payment by the Holder of any Stock Purchase Price or any cash or other
consideration, that number of Warrant Shares computed using the following
formula:
X=Y (A-B)
-------
A
Where: X= The number of Warrant Shares to be issued to the Holder
Y= The number of Warrant Shares purchasable pursuant to this Warrant
A= The Fair Market Value of one Warrant Share as of the Conversion
Date
B= The Stock Purchase Price
2.2 Method of Exercise. The Conversion Right may be exercised by the
------------------
Holder by the surrender of this Warrant to the Company at its principal office
at the address indicated on the first paragraph of this Warrant, together with a
written notice specifying that the Holder intends to exercise the Conversion
Right and indicating the number of Warrant Shares to be acquired upon exercise
of the Conversion Right. Such conversion shall be effective upon the Company's
receipt of this Warrant, together with the conversion notice, or on such later
date as is specified in the conversion notice (the "Conversion Date") and, at
---------------
the Holder's election, may be made contingent upon the closing of the Company's
initial public offering of any securities pursuant to a registration statement
under the Securities Act of 1933, as amended (the "Securities Act").
--------------
Certificates for the Warrant Shares so acquired shall be delivered to the Holder
within a reasonable time, not exceeding fifteen (15) days after the Conversion
Date. If applicable, the Company shall, upon surrender of this Warrant for
cancellation, deliver a new Warrant evidencing the rights of the Holder to
purchase the balance of the Warrant Shares which Holder is entitled to purchase
hereunder.
2.3 Fair Market Value. "Fair Market Value" of a share of Warrant
----------------- -----------------
Shares or Common Stock (issued upon conversion thereof) as of a particular date
means: (a) if traded on an exchange or quoted on The Nasdaq National Market,
then the prior trading day's closing price, (b) if conversion is effective as of
the closing of the Company's initial public offering of any securities pursuant
to a registration statement under the Securities Act, the "price to public"
specified for such shares in the final prospectus for such public offering, (c)
if listed by the National Daily Quotation Service "Pink Sheets," then the
average of the most-recently reported
-2-
bid and ask prices and (d) otherwise, the price as determined in good faith by
the Board of Directors of the Company.
3. Shares to be Fully Paid; Reservation of Shares. The Company covenants
----------------------------------------------
and agrees that all Warrant Shares (and shares of its Common Stock reserved for
issuance upon conversion of such Warrant Shares) which may be issued upon the
exercise or conversion of the rights represented by this Warrant will, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable and
free from all preemptive rights of any shareholder and free of all taxes, liens
and charges with respect to the issue thereof. The Company further covenants
and agrees that during the period within which the rights represented by this
Warrant may be exercised or converted, the Company will use its best efforts to
cause a sufficient number of shares of authorized but unissued capital stock
(and shares of its Common Stock for issuance on conversion of such capital
stock, if any) to be authorized when and as required to provide for the exercise
or conversion of the rights represented by this Warrant. The Company will take
all such action as may be necessary to assure that such shares of capital stock
(and shares of Common Stock for issuance on conversion of such capital stock, if
any) may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of any domestic securities exchange upon
which the stock may be listed. The Company will not take any action which would
result in any adjustment of the Stock Purchase Price (as described in Section 4)
if the total number of shares of capital stock issuable after such action upon
exercise or conversion of all outstanding warrants, together with all shares of
capital stock of the same class and series as such capital stock then
outstanding and all shares of capital stock of the same class and series as such
capital stock then issuable upon exercise of all options and upon the conversion
of all convertible securities then outstanding, would exceed the total number of
shares of capital stock of the same class and series as the Warrant Shares then
authorized by the Company's Articles of Incorporation.
4. Adjustment of Stock Purchase Price and Number of Shares. The Stock
-------------------------------------------------------
Purchase Price and the number of shares purchasable upon the exercise or
conversion of this Warrant shall be subject to adjustment from time to time upon
the occurrence of certain events described in this Section 4. Upon each
adjustment of the Stock Purchase Price, Holder shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
4.1 Subdivision or Combination of Stock. In case the Company shall
-----------------------------------
at any time subdivide any of its outstanding shares of the same class and series
as the Warrant Shares into a greater number of shares, the Stock Purchase Price
in effect immediately prior to such subdivision shall be proportionately
reduced, and conversely, in case any outstanding shares of the same class and
series as the Warrant Shares shall be combined into a smaller number of shares,
the Stock Purchase Price in effect immediately prior to such combination shall
be proportionately increased.
-3-
4.2 Dividends, Reclassification. If at any time or from time to time
---------------------------
any holders of securities of the same class and series as the Warrant Shares
shall have received or become entitled to receive, without payment thereof,
(A) any shares of the Company's Preferred Stock, Common Stock or
any shares of stock or other securities which are at any time directly or
indirectly convertible into or exchangeable for Common Stock, or any rights or
options to subscribe for, purchase or otherwise acquire any of the foregoing by
way of dividend or other distribution;
(B) any cash paid or payable otherwise than as a regular
periodic cash dividend at a rate which is substantially consistent with past
practice (or, in the case of an initial dividend, at a rate which is
substantially consistent with industry practice); or
(C) any shares of the Company's Preferred Stock, Common Stock or
other or additional stock or other securities or property (including cash) by
way of spinoff, split-up, reclassification, combination of shares or similar
corporate rearrangement; (other than shares of the same class and series as the
Warrant Shares issued as a stock split, adjustments in respect of which shall be
covered by the terms of Section 4.1),
then and in each such case, Holder shall, upon the exercise or conversion of
this Warrant, be entitled to receive, in addition to the number of shares of
such capital stock receivable thereupon, and without payment of any additional
consideration thereof, the amount of stock and other securities and property
(including cash in the cases referred to in clauses (B) and (C) above) which
Holder would hold on the date of such exercise or conversion had he or it been
the holder of record of such capital stock as of the date on which holders of
such capital stock received or became entitled to receive such shares and/or all
other additional stock and other securities and property.
4.3 Conversion or Redemption. Should all of the Company's capital
------------------------
stock of the same class and series as the Warrant Shares be, or if outstanding
would be, at any time prior to the expiration of this Warrant or any portion
thereof, redeemed or converted into shares of the Company's Common Stock, then
this Warrant shall immediately become exercisable or convertible for that number
of shares of the Company's Common Stock equal to the number of shares of the
Common Stock that would have been received if this Warrant had been exercised in
full and the capital stock received thereupon had been simultaneously converted
immediately prior to such event, and the Stock Purchase Price shall be
immediately adjusted to equal the quotient obtained by dividing (x) the
aggregate Stock Purchase Price of the maximum number of shares of capital stock
for which this Warrant was exercisable or convertible immediately prior to such
conversion or redemption, by (y) the number of shares of Common Stock for which
this Warrant is exercisable or convertible immediately after such conversion or
redemption.
4.4 Other Notices. If at any time:
-------------
(1) the Company shall declare any cash dividend upon its shares of
the same class and series as the Warrant Shares;
-4-
(2) the Company shall declare any dividend upon its shares of the
same class and series as the Warrant Shares payable in stock or make any special
dividend or other distribution to the holders of its shares of the same class
and series as the Warrant Shares;
(3) there shall be any capital reorganization or reclassification of
the capital stock of the Company, or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another corporation;
(4) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; or
(5) the Company shall take or propose to take any other action,
notice of which is actually provided to or is required to be provided, pursuant
to any written agreement, to holders of its shares of the same class and series
as the Warrant Shares,
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the Holder of this Warrant at the address of
such Holder as shown of the books of the Company, (a) at least 20 days prior
written notice of the date on which the books of the Company shall close or a
record shall be taken for such dividends or distribution or for determining
rights to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, and (b) in
the case of any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, at least 20 days prior written
notice of the date when the same shall take place. Any notice given in
accordance with the foregoing clause (a) shall also specify, in the case of any
such dividend or distribution, the date on which the holders of shares of the
same class and series as the Warrant Shares shall be entitled thereto. Any
notice given in accordance with the foregoing clause (b) shall also specify the
date on which the holders of shares of the same class and series as the Warrant
Shares shall be entitled to exchange their stock for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up, as the case may be.
5. Issue Tax. The issuance of certificates for shares of the Warrant
---------
Shares shall be made without charge to the Holder of the Warrant for any issue
tax in respect thereof; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of any certificate in a name other than that of the
then Holder of the Warrant being transferred.
6. Closing of Books. The Company will at no time close its transfer books
----------------
against the transfer of any Warrant or of any shares of Warrant Shares in any
manner which interferes with the timely exercise of this Warrant.
7. No Voting or Dividend Rights; Limitation of Liability. Nothing
-----------------------------------------------------
contained in this Warrant shall be construed as conferring upon Holder the right
to vote or to consent or to receive notice as a shareholder in respect of
meetings of shareholders for the election of directors of the Company or any
other matters or any rights whatsoever as a shareholder of the Company. No
dividends or interest shall be payable or accrued in respect of this Warrant or
the interest represented hereby or the shares purchasable hereunder until, and
only to the extent that, this
-5-
Warrant shall have been exercised or converted. No provisions hereof, in the
absence of affirmative action by the Holder to purchase shares of capital stock,
and no mere enumeration herein of the rights or privileges of Holder, shall give
rise to any liability of such Holder for the Stock Purchase Price or as a
shareholder of the Company, whether such liability is asserted by the Company or
by its creditors.
8. Expiration. This Warrant shall expire upon the earlier to occur of (a)
----------
5:00 PM on the third anniversary of the date hereof; (b) the effective date of
any (i) acquisition of the Company by another entity by means of any transaction
or series of related transactions (including, without limitation, any
reorganization, merger or consolidation but, excluding any merger effected
exclusively for the purpose of changing the domicile of the Company); or (ii)
sale of all or substantially all of the assets of the Company; unless the
Company's shareholders of record as constituted immediately prior to such
acquisition or sale will, immediately after such acquisition or sale (by virtue
of securities issued as consideration for the Company's acquisition or sale or
otherwise) hold at least 50% of the voting power of the surviving or acquiring
entity; or (c) the Company's sale of its Common Stock in a firm commitment
underwritten public offering pursuant to a registration statement under the
Securities Act of 1933, as amended, at a public offering price of at least
$10.00 per share (appropriately adjusted for stock dividends, stock splits,
reverse stock splits, recapitalizations or similar transactions) with gross
proceeds to the Company in excess of $15,000,000 (the "Expiration Date").
---------------
9. Warrants Transferable. Subject to the provisions of the Agreement,
---------------------
this Warrant and all rights hereunder are transferable, in whole or in part,
without charge to Holder (except for transfer taxes), upon surrender of this
Warrant properly endorsed by the completion of the Form of Assignment attached
hereto as Exhibit B. Each Holder of this Warrant, by taking or holding the
---------
same, consents and agrees that this Warrant, when endorsed in blank, shall be
deemed negotiable, and that such Holder, when this Warrant shall have been so
endorsed, may be treated by the Company and all other persons dealing with this
Warrant as the absolute owner hereof for any purpose and as transfer hereof on
the books of the Company any notice to the contrary notwithstanding, but, until
such transfer on such books, the Company may treat the registered owner hereof
as the owner for all purposes.
10. Modification and Waiver. This Warrant and any provision hereof may be
-----------------------
amended, waived or modified upon written consent of the Company and holders of
in excess of 50% in interest of the Warrants issued pursuant to the Agreement,
provided that all such Warrants are amended, waived or modified in a like
manner.
11. Notices. Any notice, request or other document required or permitted
-------
to be given or delivered to Holder or the Company shall be delivered or shall be
sent by certified or registered mail, postage prepaid, to each such Holder at
its address as shown on the books of the Company or to the Company at the
address indicated on the first paragraph of this Warrant.
12. Descriptive Headings and Governing Law. The descriptive headings of
--------------------------------------
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance
-6-
with, and the rights of the parties shall be governed by, the laws of the State
of California, without giving effect to the conflict of laws principles thereof.
13. Lost Warrants of Stock Certificates. The Company represents and
-----------------------------------
warrants to Holder that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of any Warrant or stock
certificate and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity reasonably satisfactory to the Company, or in the case
of any such mutilation upon surrender and cancellation of such Warrant or stock
certificate, the Company at its expense will make and deliver a new Warrant or
stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Warrant or stock certificate.
14. Fractional Shares. No fractional shares shall be issued upon exercise
-----------------
of this Warrant. The Company shall, in lieu of issuing any fractional share,
pay the Holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Stock Purchase Price.
-7-
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by a duly authorized officer of the Company, effective as of the date first
written above.
THE COMPANY: WORLDRES, INC.
By: _______________________________
Xxxxxxx X. Xxxxx, President
-8-
Exhibit A
---------
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: WorldRes, Inc.
00 Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
The undersigned, Holder of the within Warrant, hereby irrevocably elects
to exercise the purchase right represented by such Warrant for, and to purchase
thereunder, ___________________________________________________________
(_____________) shares of Series C Preferred Stock of WorldRes, Inc. and
herewith makes payment of ___________________________________________________
Dollars ($______________) thereof, and requests that the certificates for such
shares by issued in the name of, and delivered to
_________________________________________________________________________, whose
address is _____________________________________________________________
___________________________________________________________________________.
The undersigned represents that it is acquiring such Series C Preferred
Stock for its own account for investment and not with a view to or for sale in
connection with any distribution thereof (subject, however, to any requirement
of law that the disposition thereof shall at all times by within its control).
DATED: _____________________
____________________________________________
(Signature must conform in all respects to
name of Holder as set forth on the face of
the Warrant)
Address:
____________________________________________
____________________________________________
____________________________________________
Exhibit B
--------
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned, Holder of the within Warrant, hereby
sells, assigns and transfers all of the rights of the undersigned under the
within Warrant, with respect to the number of shares of Series C Preferred Stock
covered thereby set forth herein below, unto:
Name of Assignee Address No. of Shares
---------------- ------- -------------
DATED: ___________________
____________________________________________
(Signature must conform in all respects to
name of Holder as set forth on the face of
the Warrant)
