Exhibit 10.32
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE
144 UNDER SUCH ACT.
WARRANT TO PURCHASE PREFERRED STOCK
of
XXXXXXXX.XXX
Void after September 14, 2002
This Warrant is issued to Air Canada, or its registered assigns
("Holder") by XxxXxxxx.xxx, a California corporation (the "Company"), on
September 14, 1999 (the "Warrant Issue Date"). This Warrant is issued pursuant
to the terms of that certain Preferred Stock and Warrant Purchase Agreement
dated as of the Warrant Issue Date, a copy of which is attached hereto as
Attachment A (the "Purchase Agreement").
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1. Purchase Shares. Subject to the terms and conditions hereinafter
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set forth, the Holder 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 up to Two
Hundred Thousand (200,000) fully paid and nonassessable shares of Series E
Preferred Stock of the Company, as constituted on the Warrant Issue Date (the
"Preferred Stock"). The number of shares of Preferred Stock issuable pursuant to
this Section 1 (the "Shares") shall be subject to adjustment pursuant to
Section 8 hereof.
2. Exercise Price. The purchase price for the Shares shall be $12.50,
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as adjusted from time to time pursuant to Section 8 hereof (the "Exercise
Price").
3. Exercise Period. This Warrant shall be exercisable, in whole or in
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part, during the term commencing on October 25, 1999 and ending at 5:00 p.m. on
September 14, 2002; provided, however, that in the event of (a) the closing of
the Company's sale or transfer of all or substantially all of its assets or (b)
the closing of the acquisition of the Company by another entity by means of
merger, consolidation or other transaction or series of related transactions,
resulting in the exchange of the outstanding shares of the Company's capital
stock unless (i) the shareholders of the Company immediately prior to such
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transaction or series of related transactions are holders of a majority of the
voting equity securities of the surviving or acquiring corporation immediately
thereafter and (ii) each of such shareholders immediately prior to such
transaction or series of related transactions holds the same pro rata share of
such majority of the voting equity securities of the surviving or acquiring
corporation as each hold of the Company
immediately prior to such transaction or series of related transactions, this
Warrant shall, on the date of such event, no longer be exercisable and become
null and void. In the event of a proposed transaction of the kind described
above, the Company shall notify the Holder 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:
(a) the surrender of the Warrant, together with a duly executed
copy of the form of Notice of Election attached hereto, to the Secretary of the
Company at its principal offices; and
(b) the payment to the Company of a cash amount equal to the
aggregate Exercise Price for the number of Shares being purchased, such amount
to be paid by check or wire transfer.
5. Net Exercise. In lieu of exercising this Warrant pursuant to
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Section 4, the Holder may elect to receive, without the payment by the Holder of
any additional consideration, shares of Preferred Stock 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 Preferred Stock computed using the following formula:
Y (A - B)
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X = A
Where: X = The number of shares of Preferred Stock to be issued to the
Holder pursuant to this net exercise;
Y = The number of Shares in respect of which the net issue
election is made;
A = The fair market value of one share of the Preferred Stock at
the time the net issue election is made;
B = The Exercise Price (as adjusted to the date of the net
issuance).
For purposes of this Section 5, the fair market value of one share of Preferred
Stock (or, to the extent all such Preferred Stock has been converted into the
Company's Common Stock) as of a particular date shall be determined as follows:
(i) if traded on a securities exchange or through the Nasdaq Stock Market, the
value shall be deemed to be the average of the closing prices of the securities
on such exchange over the thirty (30) day period ending three (3) days prior to
the net exercise election; (ii) if traded over-the-counter, the value shall be
deemed to be the average of the closing bid or sale prices (whichever is
applicable) over the thirty (30) day period ending three (3) days prior to the
net exercise; and (iii) if there is no active public market, the value shall be
the fair market value thereof, as determined in good faith by the Board of
Directors of the Company; provided, that, if the Warrant is being exercised upon
the closing of the IPO, the value
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will be the initial "Price to Public" of one share of such Preferred Stock (or
of the aggregate number of shares of Common Stock issuable upon conversion of
such Preferred Stock) specified in the final prospectus with respect to such
offering.
6. Certificates for Shares. Upon the exercise of the purchase rights
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evidenced by this Warrant, one or more certificates for the number of Shares so
purchased shall be issued as soon as practicable thereafter (with appropriate
restrictive legends, if applicable), 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. Issuance of Shares. The Company covenants that it will at all
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times keep available such number of authorized shares of its Series E 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 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
Preferred Stock, by split-up or otherwise, or combine its Preferred Stock, or
issue additional shares of its Preferred Stock or Common Stock as a dividend
with respect to any shares of its 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 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 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, so that the Holder shall have the right at any
time prior to the expiration of this Warrant to purchase, at a total price equal
to that payable upon the exercise of this Warrant, the kind and amount of shares
of stock and other securities and property receivable in connection with such
reclassification, reorganization, or change by a holder of the same number of
shares of Preferred Stock as were purchasable by the Holder immediately prior
3
to such reclassification, reorganization, or change. In any such case
appropriate provisions shall be made with respect to the rights and interest of
the Holder so that the provisions hereof shall thereafter be applicable with
respect to any shares of stock or other securities and property deliverable upon
exercise hereof, and appropriate adjustments shall be made to the purchase price
per share payable hereunder, provided the aggregate purchase price shall remain
the same.
(c) Immediately prior to the closing of any public offering of
the Company's equity securities in which all of the Company's outstanding
Preferred Stock is converted into Common Stock (provided, however, that any
shares of Series D1, D2 or D3 Preferred Stock which are not converted into
Common Stock in such public offering shall not be included in the conditions of
this subsection 8(c)), any portion of this Warrant then not 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 as of such public offering, of the maximum number of shares of
Preferred Stock that could have been acquired by the Holder 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 be
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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 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.
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 Company shall make a cash
payment therefor on the basis of the Exercise Price then in effect.
10. No Shareholder Rights. Prior to exercise of this Warrant, the
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Holder shall not be entitled to any rights of a shareholder 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 such holder shall not be entitled to any
notice or other communication concerning the business or affairs of the Company.
However, nothing in this Section 10 shall limit the right of the Holder to be
provided the Notices required under this Warrant.
11. Registration Rights. The Shares issuable upon exercise of this
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Warrant, and any securities issuable upon conversion of such Shares, possess
certain "piggyback" registration rights as set forth in Section 5.2 of that
certain Amended and Restated Investors'
4
Rights Agreement, dated the Warrant Issue Date, by and among the Company and the
Investors listed on Schedule A thereto.
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12. Transfers of Warrant. Subject to compliance with applicable
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federal and state securities laws, this Warrant and all rights hereunder are
transferable in whole or in part by the Holder to any person or entity upon
written notice to the Company. The transfer shall be recorded on the books of
the Company upon the surrender of this Warrant, properly endorsed, to the
Company at its principal offices, and the payment to the Company of all transfer
taxes and other governmental charges imposed on such transfer. In the event of a
partial transfer, the Company shall issue to the holders one or more appropriate
new warrants.
13. Successors and Assigns. The terms and provisions of this Warrant
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and the Purchase Agreement shall inure to the benefit of, and be binding upon,
the Company and the Holders 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.
15. Notices. All notices required under this Warrant and shall be
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deemed to have been given or made for all purposes (i) upon personal delivery,
(ii) upon confirmation receipt that the communication was successfully sent to
the applicable number if sent by facsimile; (iii) one business day after being
sent, when sent by professional overnight courier service, or (iv) five days
after posting when sent by registered or certified mail. Notices to the Company
shall be sent to the principal office of the Company (or at such other place as
the Company shall notify the Holder hereof in writing). Notices to the Holder
shall be sent to the address of the Holder on the books of the Company (or at
such other place as the Holder shall notify the Company hereof in writing).
16. Attorneys' Fees. If any action of law or equity is necessary to
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enforce or interpret the terms of this Warrant, the prevailing party shall be
entitled to its reasonable attorneys' fees, costs and disbursements in addition
to any other relief to which it may be entitled.
17. Captions. The section and subsection headings of this Warrant are
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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 the
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State of California as applied to agreements among California residents made and
to be performed entirely within the State of California.
19. Termination Date. This Warrant shall terminate, not be
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exercisable for any shares of Preferred Stock (or any other securities of the
Company) and be null and void on the earliest of (i) the date when both the
Holder and the Company consent in writing to terminate the Warrant, (ii) the
date when either the Holder or the Company exercises its rights under that
certain Letter Agreement between the Holder, the Company and America West
Airlines, Inc.,
5
dated September __, 1999, or (iii) the date three (3) years from the Warrant
Issue Date (such earliest date shall herein be referred to as the "Termination
Date").
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IN WITNESS WHEREOF, XxxXxxxx.xxx caused this Warrant to be executed by
an officer thereunto duly authorized.
XXXXXXXX.XXX
By: /s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx,
Chief Operating Officer and Chief Financial
Officer
SIGNATURE PAGE TO XXXXXXXX.XXX
AIR CANADA WARRANT
NOTICE OF EXERCISE
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To: XxxXxxxx.xxx
The undersigned hereby elects to [check applicable subsection]:
________ (a) Purchase _________________ shares of Series E Preferred Stock of
_________________, pursuant to the terms of the attached Warrant
and payment of the Exercise Price per share required under such
Warrant accompanies this notice;
OR
________ (b) Exercise the attached Warrant for [all of the shares] [________
of the shares] [cross out inapplicable phrase] purchasable under
the Warrant pursuant to the net exercise provisions of Section 5
of such Warrant.
The undersigned hereby represents and warrants that the undersigned is
acquiring such shares for its own account for investment purposes only, and not
for resale or with a view to distribution of such shares or any part thereof.
WARRANTHOLDER:
_________________________________________
By:______________________________________
[NAME]
Address: _________________________________________
_________________________________________
Date:________________
Name in which shares should be registered:
__________________________________________
