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EXHIBIT 10.39
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WARRANT ISSUANCE AGREEMENT
among
▇▇▇▇▇▇▇.▇▇▇, INC.
and
THE PERSONS NAMED HEREIN
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Dated as of: August 5, 1999
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Table of Contents
Page
ARTICLE 1 DEFINITIONS............................................................2
1.1 Definitions...................................................................2
ARTICLE 2 COMMITMENT OF CAPITAL AND ISSUANCE OF WARRANTS.........................5
2.1 Commitment of Capital.........................................................5
2.2 Issuance of Warrants..........................................................6
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................7
3.1 Corporate Existence and Power.................................................7
3.2 Authorization; No Contravention...............................................7
3.3 Governmental Authorization; Third Party Consents..............................8
3.4 Binding Effect................................................................8
3.5 Litigation....................................................................8
3.6 Capitalization................................................................8
3.7 No Default or Breach..........................................................9
3.8 Private Offering.............................................................10
3.9 Broker's, Finder's or Similar Fees...........................................10
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS......................10
4.1 Existence and Power..........................................................10
4.2 Authorization; No Contravention..............................................10
4.3 Governmental Authorization; Third Party Consents.............................10
4.4 Binding Effect...............................................................10
4.5 Purchase for Own Account.....................................................11
4.6 Restricted Securities........................................................11
4.7 No Public Market.............................................................11
4.8 Broker's, Finder's or Similar Fees...........................................11
ARTICLE 5 CONDITIONS TO THE OBLIGATION OF THE PURCHASERS TO CLOSE...............12
5.1 Secretary's Certificate......................................................12
ARTICLE 6 AFFIRMATIVE COVENANTS.................................................12
6.1 Reservation of Common Stock..................................................12
ARTICLE 7 MISCELLANEOUS.........................................................12
7.1 Survival of Representations and Warranties...................................12
7.2 Notices......................................................................13
7.3 Successors and Assigns; Third Party Beneficiaries............................14
7.4 Amendment and Waiver.........................................................14
7.5 Counterparts.................................................................15
7.6 Headings.....................................................................15
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7.7 Governing Law................................................................15
7.8 Severability.................................................................15
7.9 Entire Agreement.............................................................15
7.10 Publicity....................................................................15
7.11 Further Assurances...........................................................16
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Page
EXHIBITS
A Letter Agreement
B Form of Warrant
SCHEDULES
2.1 Commitment of Capital
2.2 Warrants
3.6(a) List of Stockholders and Capital Stock and Stock Equivalents
3.6(b) Other Stockholders in Subsidiaries
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WARRANT ISSUANCE AGREEMENT
AGREEMENT, dated as of August 5, 1999 (this "Agreement"), among
▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation (the "Company"), and the persons
listed on Schedule A hereto (each, a "Purchaser" and collectively, the
"Purchasers").
WHEREAS, the Company and General Atlantic Partners, LLC, a Delaware
limited liability company ("GAP LLC"), entered into a Letter Agreement (the
"Letter Agreement"), dated May 28, 1999, attached hereto as Exhibit A, pursuant
to which GAP LLC agreed and committed to purchase (through its affiliated
limited partnerships) from the Company at any time prior to the Termination Date
(as hereinafter defined), in the event that the Company reasonably requires
capital to fund the working capital reasonably necessary to enable it to satisfy
and discharge its liabilities as such liabilities become due and payable, newly
issued shares of convertible preferred stock of the Company at a price per share
of $2.25 and for an aggregate purchase price of $12 million (the "New Preferred
Stock");
WHEREAS, pursuant to the Stockholders Agreement (as defined below),
the Purchasers enjoy preemptive rights with respect to the issuance of the New
Preferred Stock and the Warrants (as hereinafter defined) and agreed to commit
capital to the Company and purchase their ratable portion of the New Preferred
Stock in the event that the Company reasonably requires capital to fund the
working capital reasonably necessary to enable it to satisfy and discharge its
liabilities and such liabilities become due and payable;
WHEREAS, in order to induce the Purchasers to commit such capital,
the Company issued to the Purchasers on May 28, 1999 pursuant to the Letter
Agreement warrants (the "Warrants") to purchase, subject to the terms and
conditions thereof, an aggregate of 500,000 shares of common stock, par value
$.0001 per share of the Company (the "Common Stock"), at an exercise price of
$2.25 per share (subject to adjustment);
WHEREAS, the Warrants contain the terms and conditions set forth in
the form of warrant attached hereto as Exhibit B; and
WHEREAS, as contemplated by Section 5 of the Letter Agreement, the
Company and the Purchasers are entering into this Agreement to confirm and
ratify the terms of the Letter Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereto agree as
follows:
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ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Affiliate" shall mean any Person who is an "affiliate" as defined
in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. The
following shall be deemed to be Affiliates of GAP Coinvestment II and GAP 54:
(a) GAP LLC, the members of GAP LLC, the limited partners of GAP Coinvestment II
and the limited partners of GAP 54; (b) any Affiliate of GAP LLC, the members of
GAP LLC, the limited partners of GAP Coinvestment II and the limited partners of
GAP 54; and (c) any limited liability company or partnership a majority of whose
members or partners, as the case may be, are members, former members,
consultants or key employees of GAP LLC. GAP 54 and GAP Coinvestment II shall be
deemed to be Affiliates of one another.
"Agreement" has the meaning set forth in the preamble to this
Agreement.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in the States of New York or California are
authorized or required by law or executive order to close.
"Bylaws" means the bylaws of the Company in effect on the date
hereof, as the same may be amended from time to time.
"Capital Commitment" has the meaning set forth in Section 2.1(a) of
this Agreement.
"Certificate of Incorporation" means the Amended and Restated
Certificate of Incorporation of the Company in effect on the date hereof, as the
same may be amended from time to time.
"Claims" has the meaning set forth in Section 3.5 of this Agreement.
"Closing Date" has the meaning set forth in Section 2.1(c) of this
Agreement.
"Commission" means the Securities and Exchange Commission.
"Common Stock" has the meaning set forth in the recitals to this
Agreement.
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"Company" has the meaning set forth in the preamble to this
Agreement.
"Condition of the Company" means the assets, business, properties,
operations or financial condition of the Company and the Subsidiaries, taken as
a whole.
"Contractual Obligations" means, as to any Person, any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument to
which such Person is a party or by which it or any of its property is bound.
"Defaulting Purchaser" has the meaning set forth in Section 2.2(a)
of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"GAP Coinvestment II" means GAP Coinvestment Partners II, L.P., a
Delaware limited partnership.
"GAP 54" means General Atlantic Partners 54, L.P., a Delaware
limited partnership.
"GAP LLC" has the meaning set forth in the recitals to this
Agreement.
"Governmental Authority" means any federal, state, city or local
governmental authority or any political subdivision thereof.
"Investor Rights Agreement" means the Fourth Amended and Restated
Investor Rights Agreement, dated as of May 17, 1999, among the Company and the
parties set forth on Schedule I thereto, as the same shall be amended from time
to time.
"Knowledge of the Company" shall mean, with respect to the Company,
the knowledge of any officer of the Company.
"Letter Agreement" has the meaning set forth in the recitals to this
Agreement.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or other security interest.
"Notice of Claim" has the meaning set forth in Section 6.3 of this
Agreement.
"New Preferred Stock" has the meaning set forth in the recitals to
this Agreement.
"Orders" has the meaning set forth in Section 3.2 of this Agreement.
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"Person" means any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, Governmental Authority or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.
"Purchasers" has the meaning set forth in the preamble to this
Agreement.
"Redemption Price" has the meaning set forth in Section 2.2(b) of
this Agreement.
"Requirements of Law" means, as to any Person, any law, statute,
treaty, rule or regulation of a court or other Governmental Authority, in each
case applicable or binding upon such Person or any of its property or to which
such Person or any of its property is bound.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder.
"Stock Equivalents" means any security or obligation which is by its
terms convertible into or exchangeable for shares of Common Stock or other
capital stock or securities of the Company, and any option, warrant or other
subscription or purchase right with respect to Common Stock or such other
capital stock or securities of the Company.
"Stockholders Agreement" means the Third Amended and Restated
Stockholders Agreement, dated as of May 17, 1999, among the Company and the
parties set forth on Schedule I thereto, as the same shall be amended from time
to time.
"Subsidiary" means, with respect to any Person, a corporation or
other entity of which 50% or more of the combined voting power of the then
outstanding securities ordinarily (and apart from rights accruing under special
circumstances) having the right to vote in the election of directors is owned,
directly or indirectly, by such Person.
"Termination Date" means the earlier to occur of (a) the closing
date of the Company's initial public offering of shares of Common Stock pursuant
to an effective registration statement under the Securities Act and (b) March
31, 2000.
"Warrants" has the meaning set forth in the recitals to this
Agreement.
"Warrant Shares" has the meaning set forth in Section 2.2(a) of this
Agreement.
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ARTICLE 2
COMMITMENT OF CAPITAL AND ISSUANCE OF WARRANTS
2.1 Commitment of Capital.
(a) Each Purchaser agrees to commit capital to the Company in
the amount set forth opposite such Purchaser's name on Schedule 2.1 hereto at
any time on or prior to the Termination Date (the "Capital Commitment") in the
event the Company reasonably requires capital to fund the working capital
reasonably necessary to enable it to satisfy and discharge its liabilities as
such liabilities become due and payable (the "Working Capital Purposes"), in
consideration of the aggregate number of shares of New Preferred Stock set forth
opposite such Purchaser's name on Schedule 2.1 hereto. In the event that the
Company requires a portion, but not all, of the Purchasers' Capital Commitments
to fund the Working Capital Purposes, the aggregate Capital Commitments shall be
funded pro rata by all of the Purchasers based on the ratio that each
Purchaser's Capital Commitment bears to the aggregate Capital Commitments of all
of the Purchasers set forth on Schedule 2.1 hereto.
(b) (i) The shares of New Preferred Stock shall be issued in
consideration of each Purchaser's Capital Commitment at a price equal to $2.25
per share and have the same rank, dividend, voting, anti-dilution and other
rights and preferences as the Series D Convertible Preferred Stock, par value
$.0001 per share, of the Company and (ii) the terms of the New Preferred Stock
shall be in form and substance reasonably satisfactory to the Company and the
Purchasers. Each of the Purchasers hereby consents to the amendment to the
Certificate of Incorporation necessary to enable the Company to issue such New
Preferred Stock in accordance with this Agreement.
(c) If the Company requires capital to fund the Working Capital
Purposes, then it shall give written notice thereof not less than 10 Business
Days prior to the date upon which such capital is so required by the Company
(the "Closing Date"). The closing of the funding of the Capital Commitment and
the sale of the New Preferred Stock in consideration thereof shall take place at
the offices of the Company, at 10:00 a.m., local time, on the Closing Date. On
the Closing Date, (i) the Company shall deliver to each of the Purchasers a
stock certificate(s) representing the aggregate number of shares of New
Preferred Stock being purchased by such Purchaser, against delivery by such
Purchaser to the Company of the aggregate purchase price therefor by wire
transfer of immediately available funds and (ii) the Company and the Purchasers
shall execute such additional documents as are reasonably necessary to close
such transaction, including, without limitation, (x) a stock purchase agreement
in which the Company shall make representations and warranties to the Purchasers
substantially similar to those set forth in Article 3 below and other customary
representations and warranties reasonably required by the Purchasers and in
which the Purchasers severally shall make representations and warranties to the
Company substantially similar to those set forth in
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Article 4 below and (y) all necessary amendments to each of the Stockholders
Agreement and the Investor Rights Agreement.
2.2 Issuance of Warrants.
(a) Subject to the terms and conditions herein set forth, the
Company agrees in consideration of each of the Purchaser's Capital Commitment to
issue as of May 28, 1999 to such Purchaser, Warrants to purchase the aggregate
number of shares of Common Stock set forth opposite such Purchaser's name on
Schedule 2.2 hereto (all of the shares of Common Stock issuable upon exercise of
the Warrants being issued pursuant hereto being referred to herein as the
"Warrant Shares"); provided, however, that such Warrants shall be immediately
canceled and shall be of no further force and effect if a Purchaser (a
"Defaulting Purchaser") fails to satisfy its Capital Commitment when due to the
Company in accordance with Section 2.1; and provided, further, that such
canceled Warrants shall be re-issued to any Purchaser electing to fund the
Capital Commitment of a Defaulting Purchaser, which opportunity shall be offered
ratably to all Purchasers in accordance with their funded Capital Commitments
pursuant to Section 2.1.
(b) If a Defaulting Purchaser exercises its Warrants at any time
on or prior to the Termination Date and fails to satisfy its Capital Commitment
when due to the Company in accordance with Section 2.1, then the Company shall
have the right and option (the "Company Option") to purchase from such
Defaulting Purchaser all of the shares of Common Stock issued upon exercise of
such Warrants (subject to anti-dilution adjustment) for an aggregate purchase
price of $1.00 (the "Redemption Price"). If the Company wishes to exercise the
Company Option, then it shall deliver to such Defaulting Purchaser written
notice of the exercise thereof, and such Defaulting Purchaser shall be obligated
to sell all of such shares of Common Stock to the Company at the Redemption
Price. The closing of such transaction shall occur at the offices of the
Company, at 10:00 a.m., local time, not more than three Business Days after the
Company delivers such written notice to such Defaulting Purchaser. At such
closing, (i) the Defaulting Purchaser shall deliver the certificate(s)
representing such shares of Common Stock, against payment by the Company of the
Redemption Price and (ii) the Company and the Defaulting Purchaser shall execute
such additional documents as may be reasonably required.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchasers as
follows:
3.1 Corporate Existence and Power. Each of the Company and each
Subsidiary of the Company (a) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation;
(b) has all requisite
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power and authority to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged;
(c) is duly qualified as a foreign corporation, licensed and in good standing
under the laws of each jurisdiction in which its ownership, lease or operation
of property or the conduct of its business requires such qualification, except
(i) to the extent that the failure to do so would not have a material adverse
effect on the Condition of the Company or (ii) where such failure to be so
qualified is related solely to the fact that the Company is deemed to conduct
commerce over the Internet through interstate telephone lines or the use of an
"800" number in a particular jurisdiction; and (d) has the corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and the Warrants. To the Knowledge of the Company, no jurisdiction, other than
those referred to in clause (c) above, has claimed, in writing or otherwise,
that the Company or any Subsidiary is required to qualify as a foreign
corporation therein, and neither the Company nor any Subsidiary thereof files
any franchise, income or other tax returns in any other jurisdiction based upon
the ownership or use of property therein or the derivation of income therefrom.
3.2 Authorization; No Contravention. The execution, delivery and
performance by the Company of this Agreement and the Warrants, the issuance of
the Warrant Shares and the transactions contemplated hereby and thereby (a) have
been duly authorized by all necessary corporate action of the Company; (b) do
not contravene the terms of the Certificate of Incorporation or the Bylaws, or
the certificate of incorporation or bylaws or other organizational documents of
any Subsidiary of the Company; (c) do not, in any material respect, violate,
conflict with or result in any breach or contravention of, or the creation of
any Lien under, any Contractual Obligation of the Company or any Subsidiary
thereof, or any Requirement of Law applicable to the Company or any Subsidiary
thereof; and (d) do not violate any judgment, injunction, writ, award, decree or
order of any nature (collectively, "Orders") of any Governmental Authority
against, or binding upon, the Company or any Subsidiary thereof.
3.3 Governmental Authorization; Third Party Consents. Except as set
forth on Schedule 3.3, no approval, consent, compliance, exemption,
authorization or other action by, or notice to, or filing with, any Governmental
Authority or any other Person, and no lapse of a waiting period under a
Requirement of Law, is necessary or required in connection with the execution,
delivery or performance (including, without limitation, the sale, issuance and
delivery of the Warrant Shares) by, or enforcement against, the Company of this
Agreement and the Warrants or the transactions contemplated hereby and thereby.
3.4 Binding Effect. This Agreement and the Warrants have been duly
executed and delivered by the Company, and constitute the legal, valid and
binding obligations of the Company enforceable against the Company in accordance
with their terms, except (a) as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity relating to enforceability
(regardless of whether considered in a proceeding at law or in equity)
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and (b) to the extent the indemnification provisions of this Agreement may be
limited by applicable federal or state securities laws.
3.5 Litigation. Except as set forth on Schedule 3.5, there are no
actions, suits, proceedings, claims, complaints, disputes, arbitrations or
investigations (collectively, "Claims") pending or, to the Knowledge of the
Company, threatened, at law, in equity, in arbitration or before any
Governmental Authority against the Company or any Subsidiary thereof, which
would, if adversely determined, have a material adverse effect on the Condition
of the Company or the ability of the Company to perform its obligations under
this Agreement or the Warrants. No Order has been issued by any court or other
Governmental Authority against the Company or any Subsidiary purporting to
enjoin or restrain the execution, delivery or performance of this Agreement or
the Warrants.
3.6 Capitalization. On the closing date of the sale of the Company's
Series E Preferred Stock (the "Series E Closing Date") pursuant to that certain
Series E Preferred Stock Purchase Agreement, dated August 5, 1999, by and among
the Company, Excite, Inc., and ▇▇▇ Interactive Media, Inc. (the "Series E
Purchase Agreement"), after giving effect to the transactions contemplated by
the Series E Purchase Agreement to occur on or prior thereto, the authorized
capital stock of the Company shall consist of (i) 270,000,000 shares of Common
Stock, par value $.0001, of which 37,940,070 shares are and shall be issued and
outstanding and (ii) 90,000,000 shares of Preferred Stock, par value $.0001, of
which (A) 8,440,002 shares have been designated Series A Preferred Stock, of
which 8,440,002 shares are and shall be issued and outstanding, which shares are
convertible into 8,440,002 shares of Common Stock, (B) 2,718,018 shares have
been designated Series A1 Preferred Stock, of which 2,677,578 shares are and
shall be issued and outstanding, which shares are convertible into 2,677,578
shares of Common Stock, (C) 9,500,000 shares have been designated Series B
Preferred Stock, of which 9,499,874 shares are and shall be issued and
outstanding, which shares are convertible into 9,499,874 shares of Common Stock,
(D) 17,395,949 shares have been designated Series C Preferred Stock, of which
17,379,355 shares shall be issued and outstanding, which shares are convertible
into 17,379,355 shares of Common Stock, (E) 13,333,335 shares have been
designated Series D Preferred Stock, of which 13,333,335 shares shall be issued
and outstanding, which shares are convertible into 13,333,335 shares of Common
Stock and (F) 30,555,556 shares have been designated Series E Preferred Stock,
of which (i) 9,444,446 shares shall be issued and outstanding, which shares
shall be convertible into 9,444,446 shares of Common Stock and (ii) 21,111,110
shares shall be duly reserved for future sale and issuance pursuant to Section
2.1 of the Series E Purchase Agreement, which shares shall be convertible into
24,444,444 shares of Common Stock. Schedule 3.6(a) sets forth, at and on the
Series E Closing Date, a true and complete list of (x) the stockholders of the
Company and, opposite the name of each stockholder, the amount of all
outstanding capital stock and Stock Equivalents owned by each such stockholder
and (y) the holders of Stock Equivalents (other than the stockholders set forth
in clause (x) above) and, opposite the name of each such holder, the amount of
all Stock Equivalents owned by each such holder. The Company has reserved
500,000 shares of Common
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Stock for issuance upon conversion of the Warrants. Except as set forth on
Schedule 3.6(a) and except for the Warrants, there are no options, warrants,
conversion privileges, subscription or purchase rights or other rights presently
outstanding to purchase or otherwise acquire (i) any authorized but unissued,
unauthorized or treasury shares of the Company's capital stock, (ii) any Stock
Equivalents or (iii) other securities of the Company. The Warrants and the
Warrant Shares are duly authorized, and when the Warrant Shares are issued and
sold to the Purchasers upon exercise of the Warrants, will be validly issued,
fully paid and nonassessable and will be issued in compliance with the
registration and qualification requirements of all applicable federal and state
securities laws. The issued and outstanding shares of Common Stock are all duly
authorized, validly issued, fully paid and nonassessable, and, to the Knowledge
of the Company, except as set forth on Schedule 3.6(a), were issued in
compliance with the registration and qualification requirements of all
applicable federal and state securities laws.
3.7 No Default or Breach. Except as set forth on Schedule 3.7,
neither the Company nor any Subsidiary thereof has received notice of default
under or with respect to, or is in default under or with respect to, any
material Contractual Obligation. All of such Contractual Obligations are valid,
in full force and effect and binding upon the Company or the applicable
Subsidiary thereof, as the case may be, and the other parties thereto, and
neither the Company nor the applicable Subsidiary thereof, as the case may be,
is in breach or default under (and no event has occurred which with notice of
the passage of time or both would constitute a breach or default under) any
material provision thereof. To the Knowledge of the Company, no other party to
any such Contractual Obligation is in default thereunder nor does any condition
exist that with notice or lapse of time or both would constitute a default
thereunder.
3.8 Private Offering. No form of general solicitation or general
advertising was used by the Company or its representatives in connection with
the issuance of the Warrants. No registration of the Warrants or the Warrant
Shares, pursuant to the provisions of the Securities Act or any state securities
or "blue sky" laws, will be required by the offer, sale or issuance of the
Warrants or the Warrant Shares.
3.9 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by the Company
or any Subsidiary thereof in connection with the issuance of the Warrants or the
Warrant Shares or transactions contemplated hereby.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of the Purchasers severally and not jointly hereby represents
and warrants to the Company as follows:
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4.1 Existence and Power. Such Purchaser (a) is a corporation,
partnership, limited liability company or trust, as the case may be, duly
organized and validly existing under the laws of the jurisdiction of its
formation and (b) has the requisite corporate, partnership, limited liability
company or trust, as the case may be, power and authority to execute, deliver
and perform its obligations under this Agreement.
4.2 Authorization; No Contravention. The execution, delivery and
performance by such Purchaser of this Agreement and the transactions
contemplated hereby, (a) have been duly authorized by all necessary corporate,
partnership or limited liability company action, as the case may be, (b) do not
contravene the terms of such Purchaser's organizational documents, or any
amendment thereof, and (c) do not and will not violate, in any material respect,
conflict with or result in any breach or contravention of or the creation of any
Lien under, any Contractual Obligation of such Purchaser, or any Requirement of
Law applicable to such Purchaser.
4.3 Governmental Authorization; Third Party Consents. No approval,
consent, compliance, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person, and no lapse of
a waiting period under any Requirement of Law, is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, such Purchaser of this Agreement or the transactions contemplated
hereby.
4.4 Binding Effect. This Agreement has been duly executed and
delivered by such Purchaser and constitute the legal, valid and binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except (a) as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability (regardless of whether
considered in a proceeding at law or in equity) and (b) to the extent the
indemnification provisions of this Agreement may be limited by applicable
federal or state securities law.
4.5 Purchase for Own Account. The Warrants to be acquired by such
Purchaser pursuant to this Agreement and the Warrant Shares are being or will be
acquired for its own account and with no intention of distributing or reselling
such Warrants or Warrant Shares or any part thereof in any transaction that
would be in violation of the securities laws of the United States of America, or
any state, without prejudice, however, to the rights of such Purchaser at all
times to sell or otherwise dispose of all or any part of the Warrants or the
Warrant Shares under an effective registration statement under the Securities
Act, or under an exemption available under the Securities Act, and subject,
nevertheless, to the disposition of such Purchaser's property being at all times
within its control. If such Purchaser should in the future decide to dispose of
any of the Warrants or the Warrant Shares, such Purchaser understands and agrees
that it may do so only in compliance with the Securities Act and applicable
state
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securities laws, as then in effect. Such Purchaser agrees to the imprinting on
certificates representing the Warrant Shares of legends in substantially the
form stipulated in the Stockholders Agreement (so long as such agreement is in
effect) or, if the Stockholders Agreement is no longer in effect, of legends
required by law.
4.6 Restricted Securities. Such Purchaser understands that the
Warrants and the Warrant Shares will not be registered at the time of their
issuance under the Securities Act for the reason that exempt from registration
pursuant to Section 4(2) of the Securities Act and that the reliance of the
Company on such exemption is predicated in part on such Purchaser's
representations set forth herein. Such Purchaser represents that it is
experienced in evaluating companies such as the Company, is an "accredited
investor" within the meaning of Rule 501 promulgated under the Securities Act,
has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of its investment and has the ability
to suffer the total loss of its investment.
4.7 No Public Market. Such Purchaser understands that no public
market now exists for the Warrants and that it is unlikely that a public market
will ever exist for the Warrants.
4.8 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by the
Purchasers in connection with the transactions contemplated hereby.
ARTICLE 5
CONDITIONS TO THE OBLIGATION OF THE PURCHASERS TO CLOSE
The obligation of each Purchaser under Section 2.1 of this Agreement
shall be subject to the satisfaction or waiver of the following conditions on or
before the date hereof:
5.1 Secretary's Certificate. The Purchasers shall have received a
certificate from the Company, in form and substance satisfactory to the
Purchasers, dated the date hereof and signed by the Secretary or an Assistant
Secretary of the Company, certifying that the attached resolutions of the Board
of Directors of the Company approving this Agreement and the issuance of the
Warrants, and the transactions contemplated hereby and thereby, are true,
complete and correct and remain unamended and in full force and effect.
5.2 Warrants. The Company shall have delivered to each Purchaser
Warrants in definitive form to purchase the aggregate number of Warrant Shares
set forth opposite such Purchaser's name on Schedule 2.2 hereto.
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ARTICLE 6
AFFIRMATIVE COVENANTS
The Company hereby covenants and agrees with the Purchasers as
follows:
6.1 Reservation of Common Stock. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issue and delivery of the Warrant Shares upon exercise of the
Warrants, the maximum number of shares of Common Stock that may be issuable or
deliverable upon such exercise. Such shares of Common Stock are duly authorized
and, when issued or delivered upon exercise of the Warrants, shall be validly
issued, fully paid and nonassessable.
ARTICLE 7
MISCELLANEOUS
7.1 Survival of Representations and Warranties. All of the
representations and warranties made herein shall survive the execution and
delivery of this Agreement, any investigation by or on behalf of the Purchaser,
or exercise of the Warrants, until sixty days after the date upon which each of
the Purchasers receives the audited financial statements of the Company for the
fiscal year ending December 31, 2000 (or any successor fiscal year then in
effect), but, notwithstanding the foregoing, the representations and warranties
in Sections 3.2, 3.4, 3.6, 4.2, 4.4, 4.5 and 4.6 shall survive until the third
anniversary of the date hereof.
7.2 Notices. All notices, demands and other communications provided
for or permitted hereunder shall be made in writing and shall be by registered
or certified first-class mail, return receipt requested, telecopier, courier
service or personal delivery:
(a) if to the Company:
▇▇▇▇▇▇▇.▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
W. ▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
and
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
(b) if to GAP 54 or GAP Coinvestment II:
c/o General Atlantic Service Corporation
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
(c) if to any other Purchaser, at its address as it
appears on the record books of the Company.
All such notices and communications shall be deemed to have been
duly given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial courier service; five (5) Business Days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is mechanically acknowledged, if telecopied.
7.3 Successors and Assigns; Third Party Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties hereto. Subject to applicable securities laws
and the terms and conditions of the Warrants, each of the Purchasers may assign
any of its rights or obligations under this Agreement or the Warrants to any of
its Affiliates. Except as
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provided in the foregoing sentence, neither the Company nor any Purchaser may
assign any of its rights under this Agreement without the written consent of the
other parties hereto. Except as provided in Article 6, no Person other than the
parties hereto and their successors and permitted assigns is intended to be a
beneficiary of this Agreement.
7.4 Amendment and Waiver.
(a) No failure or delay on the part of the Company or the
Purchasers in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
Company or the Purchasers at law, in equity or otherwise.
(b) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by the Company or the Purchasers from the terms of
any provision of this Agreement, shall be effective only if it is made or given
in writing and signed by the Company and the Purchasers to whom a majority of
the Warrants are issued pursuant to this Agreement. Except where notice is
specifically required by this Agreement, no notice to or demand on the Company
in any case shall entitle the Company to any other or further notice or demand
in similar or other circumstances.
7.5 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
7.6 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
7.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW OF ANY JURISDICTION.
7.8 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
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7.9 Entire Agreement. This Agreement, together with the schedules
and exhibits hereto, is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein or therein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to the subject matter hereof.
7.10 Publicity. Except as may be required by applicable Requirement
of Law, none of the parties hereto shall issue a publicity release or public
announcement or otherwise make any disclosure concerning this Agreement or the
transactions contemplated hereby, without prior approval by the other parties
hereto (which approval shall not be unreasonably withheld); provided, however,
that nothing in this Agreement shall restrict any party from disclosing
information (a) that is already publicly available; (b) to a permitted
prospective transferee in connection with any contemplated transfer of any of
the Warrants or Warrant Shares; (c) to its Affiliates, members, with respect to
any Purchaser that is a limited liability company, or partners, with respect to
any Purchaser that is a limited partnership, and (d) to its attorneys,
accountants, consultants and other advisors in connection with such Persons
rendering of service to any such party in connection with the transactions
contemplated hereby or by the other Transaction Documents. In addition, GAP LLC
and the idealab! Entities shall be permitted to disclose the fact of their
respective investment in the Company, the aggregate amount so invested and the
identity of the Company and its President on their respective Worldwide Web
Pages, ▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇.▇▇▇.▇▇▇. If any announcement is required by
law to be made by any party hereto, prior to making such announcement such party
will deliver a draft of such announcement to the other parties and shall give
the other parties an opportunity to comment thereon.
7.11 Further Assurances. Each of the parties shall execute such
documents and perform such further acts as may be reasonably required or
desirable to carry out or to perform the provisions of this Agreement and to
consummate and make effective as promptly as possible the transactions
contemplated by this Agreement.
7.12 Expenses. The Company shall pay all of the transaction-related
legal expenses of GAP 54 and GAP Coinvestment II in connection with the
transactions contemplated by this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their respective officers hereunto duly authorized
on the date first above written.
▇▇▇▇▇▇▇.▇▇▇, INC.
By:
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
GENERAL ATLANTIC PARTNERS 54, L.P.
By: GENERAL ATLANTIC PARTNERS,
LLC, its General Partner
By:
----------------------------------
Name:
Title: Managing Member
GAP COINVESTMENT PARTNERS II, L.P.
By:
----------------------------------
Name:
Title: Managing Member
▇.▇.▇. TRUST
By:
----------------------------------
Name:
Title:
ATTRACTOR INSTITUTIONAL LP
By: Attractor Ventures LLC,
its General Partner
By:
----------------------------------
Name:
Title:
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ATTRACTOR LP
By: Attractor Ventures LLC,
its General Partner
By:
----------------------------------
Name:
Title:
ATTRACTOR VENTURES LLC
By:
----------------------------------
Name:
Title:
IDEALAB! CAPITAL PARTNERS I-A LP
By: idealab! Capital Management I,LLC,
its General Partner
By:
----------------------------------
Name:
Title:
IDEALAB! CAPITAL PARTNERS I-B LP
By: idealab! Capital Management I,LLC,
its General Partner
By:
----------------------------------
Name:
Title:
▇▇▇▇▇ GLOBAL INVESTMENTS, LTD.
By: ▇▇▇▇▇ Capital Management, Inc.,
its Trading Advisor
By:
----------------------------------
Name:
Title:
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THE ▇▇▇▇ ▇. AND ▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ FOUNDATION
By:
----------------------------------
Name:
Title:
REMINGTON INVESTMENTS STRATEGIES, L.P.
By: ▇▇▇▇▇ Capital Advisors, L.L.C.,
its General Partner
By:
----------------------------------
Name:
Title:
MULTI-STRATEGIES FUND, L.P.
By: ▇▇▇▇▇ Capital Management, Inc.,
its Trading Advisor
By:
----------------------------------
Name:
Title:
MULTI-STRATEGIES FUND LTD.
By: ▇▇▇▇▇ Capital Advisors, L.L.C.,
its General Partner
By:
----------------------------------
Name:
Title:
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▇▇▇▇▇▇▇ INTERNATIONAL, LLC
By:
----------------------------------
Name:
Title:
SPORTS CAPITAL TICKETS, LLC
By:
----------------------------------
Name:
Title:
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Schedule 2.1
Commitment of Capital
--------------------------------------------------------------------------------
SHARES OF
NEW PREFERRED COMMITMENT
NAME OF PURCHASER STOCK (DOLLARS)
General Atlantic Partners 54, L.P. 3,964,854 $ 8,920,921.50
GAP Coinvestment Partners II, L.P. 827,732 1,862,397.00
Attractor Institutional LP 14,985 33,716.25
Attractor Ventures LLC 12,687 28,545.75
Attractor LP 172,949 389,135.25
idealab! Capital Partners 1-A LP 85,590 192,577.50
idealab! Capital Partners 1-B LP 70,022 157,549.50
▇▇▇▇▇ Global Investments, Ltd. 39,717 89,363.25
Remington Investments Strategies, L.P. 5,654 12,721.50
▇▇▇ Trust 4,682 10,534.50
Multi-Strategies Fund, L.P. 3,141 7,067.25
Multi-Strategies Fund, Ltd. 14,311 32,199.75
▇▇▇▇▇▇▇ International, LLC 42,105 94,736.25
The ▇▇▇▇ ▇. and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 32,797 73,793.25
Foundation
Sports Capital Tickets, LLC 42,105 94,736.25
TOTAL 5,333,331 $11,999,994.75
--------------------------------------------------------------------------------
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Schedule 2.2
Warrants
--------------------------------------------------------------------------------
NAME OF PURCHASER NUMBER OF WARRANT SHARES
General Atlantic Partners 54, L.P. 371,706
GAP Coinvestment Partners II, L.P. 77,600
Attractor Institutional LP 1,405
Attractor Ventures LLC 1,189
Attractor LP 16,214
idealab! Capital Partners 1-A LP 8,024
idealab! Capital Partners 1-B LP 6,565
▇▇▇▇▇ Global Investments, Ltd. 3,723
Remington Investments Strategies, L.P. 530
▇▇▇ Trust 439
Multi-Strategies Fund, L.P. 294
Multi-Strategies Fund, Ltd. 1,342
▇▇▇▇▇▇▇ International, LLC 3,947
Sports Capital Tickets, LLC 3,947
The ▇▇▇▇ ▇. and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Foundation 3,075
-------
TOTAL 500,000
--------------------------------------------------------------------------------
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