Exhibit 10.27
EXHIBIT E
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THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR AN OPINION OF COUNSEL OF THE HOLDER, REASONABLY SATISFACTORY TO
THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD
PURSUANT TO RULE 144 UNDER SUCH ACT.
WPC-1 Dated: __________________, ______
INTERNET TRAVEL NETWORK
WARRANT TO PURCHASE SHARES OF SERIES C PREFERRED STOCK
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This Warrant is issued to Covia LLC (the "Investor") by Internet
Travel Network, a California corporation (the "Company"), in connection with the
Investor's purchase of the Company's Series C Preferred Stock under that certain
Series C Preferred Stock, Warrant and Option Purchase Agreement dated as of May
10, 1998 (the "Purchase Agreement").
1. Purchase of Shares. Subject to (i) the validity and
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enforceability of the representations and warranties made by the Investor for
the benefit of the Company under Section 4 of the Purchase Agreement, which
such representations and warranties were true and correct when made and shall
be true and correct as of the date of this Warrant with the same force and
effect as if they had been made on and as of the date of this Warrant, and
(ii) the terms and conditions hereinafter set forth, the Investor (and any
subsequent holder of this Warrant) is entitled, upon surrender of this Warrant
at the principal office of the Company (or at such other place as the Company
shall notify the holder hereof in writing), to purchase from the Company Eight
Hundred Seven Thousand Six Hundred Ninety-Eight (807,698) duly authorized,
validly issued, fully paid and nonassessable shares of Series C Preferred
Stock of the Company, as more fully described below. The shares of Series C
Preferred Stock issuable pursuant to this Section 1 (the "Shares") shall also
be subject to adjustment pursuant to Section 8 hereof.
2. Exercise Price. The exercise price for the Shares shall be $0.01
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per share. Such exercise price shall be subject to adjustment pursuant to
Section 8 hereof (such price, as adjusted from time to time, is herein
referred to as the "Exercise Price").
3. Exercise Period. This Warrant is immediately exercisable and it
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shall remain exercisable indefinitely; provided, however, that in the event of
(a) the sale of all or substantially all the assets of the Company, or (b) the
merger of the Company into or consolidation with any other entity, after which
the shareholders of the Company prior to such
transaction own less than 50% of the voting power of the acquiring or
surviving entity after such transaction, this Warrant shall, on the date of
the consummation such event, terminate and no longer be exercisable. In the
event of a proposed transaction of the kind described above, the Company shall
notify the holder of the Warrant in writing at least twenty (20) days prior to
the consummation of such event or transaction.
4. Method of Exercise. While this Warrant remains outstanding and
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exercisable in accordance with Section 3 above, the holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise shall be
effected by:
(i) the surrender of the Warrant, together with a duly executed
copy of the form of subscription attached hereto, to the Secretary of the
Company at its principal offices; and
(ii) subject to Section 5 below, the payment to the Company in
cash or by check or wire transfer of the amount equal to the aggregate
Exercise Price for the number of Shares being purchased.
5. Net Exercise. In lieu of exercising this Warrant with the
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payment referenced in Section 4 above, the holder of this Warrant may elect to
receive shares equal to the value of this Warrant (or the portion thereof
being canceled) by surrender of this Warrant at the principal office of the
Company together with notice of such election, in which event the Company
shall issue to the holder hereof a number of shares of Series C Preferred
Stock computed using the following formula:
Y (A - B)
X = ---------
A
Where
X = The number of shares of Series C Preferred Stock to be issued to
the holder of this Warrant upon a net exercise.
Y = The number of shares of Series C Preferred Stock purchasable
under this Warrant (or the portion of this Warrant being
canceled).
A = The fair market value of one share of the Company's Series C
Preferred Stock.
B = The Exercise Price (as adjusted to the date of such
calculations).
For purposes of this Paragraph 5, if the Company's Common Stock is
then actively traded (i) over-the-counter, (ii) on a securities exchange or
(iii) through the Nasdaq National Market (either of (ii) or (iii) an
"Exchange"), the fair market value of Series C Preferred Stock shall mean the
average of the closing bid and asked prices of the Common Stock into which the
Series C Preferred Stock is then convertible as quoted in the over-the-counter
market
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in which the Common Stock is then traded or the closing price quoted on any
Exchange on which the Common Stock is listed, whichever is applicable, as
published in the Western Edition of The Wall Street Journal for the ten
trading days immediately prior to the date of the net exercise of the Warrant
(or such shorter period of time during which such stock was traded over-the-
counter or on such exchange). If the Common Stock is not traded on the over-
the-counter market or on an Exchange, the fair market value shall be the price
per share that the Company could obtain from a willing buyer for shares of
Series C Preferred Stock sold by the Company from authorized but unissued
shares, as such prices shall be determined in good faith by the Company's
Board of Directors. Notwithstanding the previous terms of this paragraph, (i)
in the event that the Warrant is exercised in connection with the initial
public offering of the Common Stock of the Company, the fair market value of
the Series C Preferred Stock shall be the per share offering price of the
Common Stock to the public as listed on the cover page of the effective
registration statement for such offering, and (ii) in the case of a sale or
merger of the Company as described under Section 3(a) or (b) hereof, the fair
market value of the Series C Preferred Stock shall be the value determined in
good faith by the Company's Board of Directors.
6. Certificates for Shares. Upon the exercise of the purchase
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rights evidenced by this Warrant, one or more certificates for the number of
Shares so purchased shall be issued as soon as practicable thereafter, and in
any event within thirty (30) days of the delivery of the subscription notice.
In case the holder shall exercise this Warrant with respect to less than all
of the Shares that may be purchased under this Warrant, the Company shall
execute a new warrant in the form of this Warrant for the balance of such
Shares and deliver such new warrant to the holder of this Warrant.
7. Reservation and Issuance of Shares. The Company covenants that
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it will at all times keep available such number of authorized shares of its
Series C Preferred Stock, free from all preemptive rights with respect
thereto, which will be sufficient to permit the exercise of this Warrant for
the full number of Shares specified herein. The Company further covenants that
the Shares, when issued pursuant to the exercise of this Warrant, will be duly
and validly issued, fully paid and nonassessable and free from all taxes,
liens, and charges with respect to the issuance thereof.
8. Adjustment of Exercise Price and Number of Shares. The number of
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and kind of securities purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:
(a) Subdivisions, Combinations and Other Issuances. If the
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Company shall at any time prior to the expiration of this Warrant subdivide
its Series C Preferred Stock, by stock split or otherwise, or combine its
Series C Preferred Stock, or issue additional shares of its Series C Preferred
Stock or Common Stock as a dividend with respect to any shares of its Series C
Preferred Stock, the number of Shares issuable on the exercise of this Warrant
shall forthwith be proportionately increased in the case of a subdivision or
stock dividend, or proportionately decreased in the case of a combination.
Appropriate adjustments shall also be made to the purchase price payable per
share, but the aggregate purchase price payable for the
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total number of Shares purchasable under this Warrant (as adjusted) shall
remain the same. Any adjustment under this Section 8(a) shall become effective
at the close of business on the date the subdivision or combination becomes
effective, or as of the record date of such dividend, or in the event that no
record date is fixed, upon the making of such dividend.
(b) Reclassification, Reorganization and Consolidation. In case
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of any reclassification, capital reorganization, or change in the Series C
Preferred Stock of the Company (other than as a result of a subdivision,
combination, or stock dividend provided for in Section 8(a) above), then, as a
condition of such reclassification, reorganization, or change, lawful
provision shall be made, and duly executed documents evidencing the same from
the Company or its successor shall be delivered to the holder of this Warrant,
so that the holder of this Warrant shall have the right at any time prior to
the expiration of this Warrant to purchase, at a total price equal to that
payable upon the exercise of this Warrant, the kind and amount of shares of
stock and other securities and property receivable in connection with such
reclassification, reorganization, or change by a holder of the same number of
shares of Series C Preferred Stock as were purchasable by the holder of this
Warrant immediately prior to such reclassification, reorganization, or change.
In any such case appropriate provisions shall be made with respect to the
rights and interest of the holder of this Warrant so that the provisions
hereof shall thereafter be applicable with respect to any shares of stock or
other securities and property deliverable upon exercise hereof, and
appropriate adjustments shall be made to the purchase price per share payable
hereunder, provided that the aggregate purchase price shall remain the same.
(c) Conversion of Preferred Stock. Immediately prior to the
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closing of any public offering of the Company's equity securities in which the
Company's outstanding Preferred Stock is converted into Common Stock, any
portion of this Warrant not then exercised will thereafter be exercisable for
the number of shares of the Company's Common Stock that would have resulted
from the conversion, pursuant to the Company's Articles of Incorporation in
effect immediately prior to the consummation of such public offering, of the
maximum number of shares of Preferred Stock that could have been acquired by
the holder of this Warrant upon the exercise of the unexpired portion of this
Warrant immediately prior to such public offering.
(d) Notice of Adjustment. When any adjustment is required to
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be made in the number or kind of shares purchasable upon exercise of the
Warrant, or in the Warrant Price, the Company shall promptly notify the holder
of such event and of the number of shares of Series C Preferred Stock or other
securities or property thereafter purchasable upon exercise of this Warrant.
(e) No Impairment. The Company and the holder of this Warrant
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will not, by any voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by the
Company or the holder of this Warrant, respectively, but will at all times in
good faith assist in the carrying out of all the provisions of this Section 8
and in the taking of all such action as may be necessary or appropriate in
order to protect the rights of the Company and the holder of this Warrant
against impairment.
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9. No Fractional Shares or Scrip. No fractional shares or scrip
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representing fractional shares shall be issued upon the exercise of this
Warrant, but in lieu of such fractional shares the holder of this Warrant
shall not be required to pay that portion of the Exercise Price for any such
fractional shares.
10. No Stockholder Rights. Prior to exercise of this Warrant, the
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holder shall not be entitled to any rights of a stockholder with respect to
the Shares, including (without limitation) the right to vote such Shares,
receive dividends or other distributions thereon, exercise preemptive rights
or be notified of shareholder meetings, and, except as explicitly stated
herein, such holder shall not be entitled to any notice or other communication
concerning the business or affairs of the Company.
11. Standoff Agreement. In connection with the initial public
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offering of the Company's securities, each holder of this Warrant agrees, upon
request of the Company or the underwriters managing any such offering of the
Company's securities, not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any securities of the
Company, including without limitation this Warrant, any shares of Series C
Preferred Stock issued or issuable upon exercise of this Warrant and any
shares of Common Stock issued or issuable in lieu of or upon conversion of
such shares of Series C Preferred Stock (other than those included in the
registration statement filed in connection with the offering), without the
prior written consent of the Company or such underwriters, as the case may be,
for such period of time (not to exceed one hundred eighty (180) days) from the
effective date of the registration statement filed in connection with the
offering as may be requested by the underwriters. The holder of this Warrant
agrees that the Company may instruct its transfer agent to place stop-transfer
notations in its records to enforce the provisions of this Section 11.
12. Registration Rights. The Shares issuable upon exercise of this
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Warrant, and any securities issuable upon conversion of such Shares, are
Registrable Securities, as such term is defined in that certain Amended and
Restated Investors' Rights Agreement, dated May 10, 1998, by and among the
Company and the Investors listed on Schedule A thereto, and possess
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registration rights as described in such agreement.
13. Successors and Assigns. The terms and provisions of this
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Warrant and the Purchase Agreement shall inure to the benefit of, and be
binding upon, the Company and the holder hereof and their respective
successors and assigns.
14. Amendments and Waivers. Any term of this Warrant may be amended
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and the observance of any term of this Warrant may be waived (either generally
or in a particular instance and either retroactively or prospectively), with
the written consent of the Company and the holder of this Warrant. Any waiver
or amendment effected in accordance with this Section 13 shall be binding upon
each current and future holder of this Warrant and the Company.
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15. Notices. Any notices or certificates sent by the Company to the
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holder of this Warrant or notices or other documents sent by the holder of
this Warrant to the Company shall be deemed delivered if delivered in person
or by registered mail (return receipt requested) addressed, if to the holder,
to such holder's address shown in the Company's records (as the same may be
changed from time to time by notice from the holder), and if to the Company,
to Internet Travel Network, 000 Xxxxxxx Xxxxxx, Xxxx Xxxx, XX 00000, Attn:
President (as the same may be changed from time to time by notice from the
Company).
16. Transferability of Warrant. This Warrant may not be transferred
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or assigned in whole or in part without compliance with all applicable federal
and state securities laws by the transferor and the transferee (including the
delivery of investment representation letters and legal opinions satisfactory
to the Company, if such are requested by the Company).
17. Captions. The section and subsection headings of this Warrant
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are inserted for convenience only and shall not constitute a part of this
Warrant in construing or interpreting any provision hereof.
18. Governing Law. This Warrant shall be governed by the laws of
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the State of California as applied to agreements among California residents
made and to be performed entirely within the State of California.
INTERNET TRAVEL NETWORK
By:_________________________________
Xxxxxxx X.X. Xxxxxxx,
President and Chief Executive Officer
Address: 000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
SUBSCRIPTION
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Internet Travel Network
000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attention: Corporate Secretary
The undersigned hereby elects to purchase, pursuant to the provisions
of the Warrant to Purchase Shares of Series C Preferred Stock dated
__________________, ______ issued by Internet Travel Network (the "Company") and
held by the undersigned, ___________ shares of Series C Preferred Stock of the
Company.
Payment of the exercise price per share required under such Warrant
accompanies this Subscription.
The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for its own account for investment purposes only, and not
for resale or with a view to distribution of such shares or any part thereof.
WARRANTHOLDER:
Date:___________________ By:______________________________________
Print Name:_______________________________
Address:
_______________________________________
_______________________________________
_______________________________________
Exact Name in which shares should be registered:
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