Warrant to Purchase Stock - PlanetOut Corp. and America Onlnie Inc.
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
PLANETOUT CORPORATION
AMENDED AND RESTATED WARRANT TO PURCHASE SERIES C PREFERRED STOCK
NO. PCW-4 ORIGINAL ISSUANCE DATE: JULY 25, 2000
AMENDED: MARCH 21, 2001
VOID AFTER JULY 25, 2005
THIS CERTIFIES THAT, for value received, AMERICA ONLINE, INC. or its
assigns (the "Holder"), is entitled to subscribe for and purchase at the
Exercise Price (defined below in Section 1(b)) from PLANETOUT CORPORATION, a
Delaware Corporation, with its principal office at 657 Harrison Street, San
Francisco, CA 94107 (the "Corporation") up to 20,821 shares of the Corporation's
Preferred Stock (defined below in Section 1(d)) subject to adjustment as set
forth below in Section 5.
This Amended and Restated Warrant to Purchase Series C Preferred Stock
amends, restates and supersedes in all respects that certain Warrant to Purchase
Series C Preferred Stock No. PCW-4 issued to the Holder on July 25, 2000 (the
"Original Warrant"). The Original Warrant is henceforth void and shall be of no
further force or effect as of the date hereof.
1. DEFINITIONS. As used herein, the following terms shall have
the following respective meanings:
(a) "Common Stock" shall mean shares of the Corporation's
common stock each having a par value of $0.001
(b) "Exercise Period" shall mean the period commencing
September 18, 2000 and ending July 25, 2005, unless sooner terminated as
provided below.
(c) "Exercise Price" shall mean $3.602 per share, subject
to adjustment pursuant to Section 5 below.
(d) "Exercise Shares" shall mean the shares of Preferred
Stock issuable upon exercise of this Warrant.
1.
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2. EXERCISE OF WARRANT. The rights represented by this Warrant
may be exercised in whole or in part at any time during the Exercise Period, by
delivery of the following to the Corporation at its address set forth above (or
at such other address as it may designate by notice in writing to the Holder):
(a) An executed Notice of Exercise in the form attached
hereto;
(b) Payment of the Exercise Price either (i) in cash or
by check, or (ii) by cancellation of indebtedness; and
(c) This Warrant.
Upon the exercise of the rights represented by this Warrant, a
certificate or certificates for the Exercise Shares so purchased, registered in
the name of the Holder or persons affiliated with the Holder, if the Holder so
designates, shall be issued and delivered to the Holder within a reasonable time
after the rights represented by this Warrant shall have been so exercised.
The person in whose name any certificate or certificates for Exercise
Shares are to be issued upon exercise of this Warrant shall be deemed to have
become the holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Exercise Price was made, irrespective of the date
of delivery of such certificate or certificates, except that, if the date of
such surrender and payment is a date when the stock transfer books of the
Corporation are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.
2.1. NET EXERCISE. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of the Corporation's Preferred
Stock is greater than the Exercise Price (at the date of exercise), in lieu of
exercising this Warrant by payment of cash, the Holder may elect to receive
shares equal to the value (as determined below) of this Warrant (or the portion
thereof being canceled) by surrender of this Warrant at the principal office of
the Corporation together with the properly endorsed Notice of Exercise in which
event the Corporation shall issue to the Holder a number of shares of Preferred
Stock computed using the following formula:
X = Y (A-B)
------
A
Where X = the number of shares of Preferred Stock to be issued
to the Holder
Y = the number of shares of Preferred Stock purchasable
under the Warrant or if only a portion of the Warrant
is being exercised, the portion of the Warrant being
canceled (at the date of such calculation)
A = the fair market value of one share of the
Corporation's Preferred Stock (at the date of such
calculation)
B = Exercise Price (as adjusted to the date of such
calculation)
2.
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For purposes of the above calculation, the fair market value of one
share of Preferred Stock shall be determined by the Corporation's Board of
Directors in good faith as of the date of exercise; provided, however, that in
the event that this Warrant is exercised pursuant to this Section 2.1 in
connection with the Corporation's initial public offering of its Common Stock,
the fair market value per share shall be the product of (i) the per share
offering price to the public of the Corporation's initial public offering, and
(ii) the number of shares of Common Stock into which each share of Preferred
Stock is convertible at the time of such exercise.
3. COVENANTS OF THE CORPORATION.
3.1. COVENANTS AS TO EXERCISE SHARES. The Corporation covenants
and agrees that all Exercise Shares that may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be validly issued and
outstanding, fully paid and nonassessable, and free from all taxes, liens and
charges with respect to the issuance thereof. The Corporation further covenants
and agrees that the Corporation will at all times during the Exercise Period,
have authorized and reserved, free from preemptive rights, a sufficient number
of shares of its Preferred Stock to provide for the exercise of the rights
represented by this Warrant. If at any time during the Exercise Period the
number of authorized but unissued shares of Preferred Stock shall not be
sufficient to permit exercise of this Warrant, the Corporation will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Preferred Stock to such number of shares
as shall be sufficient for such purposes.
3.2. NO IMPAIRMENT. Except and to the extent as waived or consented
to by the Holder, the Corporation will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant and
in the taking of all such action as may be necessary or appropriate in order to
protect the exercise rights of the Holder against impairment.
3.3. NOTICES OF RECORD DATE. In the event of any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend which is the same as cash dividends paid in
previous quarters) or other distribution, the Corporation shall mail to the
Holder, at least ten (10) says prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend or distribution.
4. REPRESENTATIONS OF HOLDER.
4.1. ACQUISITION OF WARRANT FOR PERSONAL ACCOUNT. The Holder
represents and warrants that it is acquiring the Warrant solely for its account
for investment and not with a view to or for sale or distribution of said
Warrant or any part thereof. The Holder also represents that the entire legal
and beneficial interests of the Warrant and Exercise Shares the Holder is
acquiring is being acquired for, and will be held for, its account only.
3.
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4.2. SECURITIES ARE NOT REGISTERED.
(a) The Holder understands that the Warrant and the
Exercise Shares have not been registered under the Securities Act of 1933, as
amended (the "Act") on the basis that no distribution or public offering of the
stock of the Corporation is to be effected. The Holder realizes that the basis
for the exemption may not be present if, notwithstanding its representations,
the Holder has a present intention of acquiring the securities for a fixed or
determinable period in the future, selling (in connection with a distribution or
otherwise), granting any participation in, or otherwise distributing the
securities. The Holder has no such present intention.
(b) The Holder recognizes that the Warrant and the
Exercise Shares must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such registration is available.
The Holder recognizes that the Corporation has no obligation to register the
Warrant or the Exercise Shares of the Corporation, or to comply with any
exemption from such registration.
(c) The Holder is aware that neither the Warrant nor the
Exercise Shares may be sold pursuant to Rule 144 adopted under the Act unless
certain conditions are met, including, among other things, the existence of a
public market for the shares, the availability of certain current public
information about the Corporation, the resale following the required holding
period under Rule 144 and the number of shares being sold during any three month
period not exceeding specified limitations. Holder is aware that the conditions
for resale set forth in Rule 144 have not been satisfied and that the
Corporation presently has no plans to satisfy these conditions in the
foreseeable future.
4.3. DISPOSITION OF WARRANT AND EXERCISE SHARES.
(a) The Holder further agrees not to make any disposition
of all or any part of the Warrant or Exercise Shares in any event unless and
until:
(i) The Corporation shall have received a letter
secured by the Holder from the Securities and Exchange Commission stating that
no action will be recommended to the Commission with respect to the proposed
disposition; or
(ii) There is then in effect a registration
statement under the Act covering such proposed disposition and such disposition
is made in accordance with said registration statement; or
(iii) The Holder shall have notified the
Corporation of the proposed disposition and shall have furnished the Corporation
with a detailed statement of the circumstances surrounding the proposed
disposition, and if reasonably requested by the Corporation, the Holder; shall
have furnished the Corporation with an opinion of counsel, reasonably
satisfactory to the Corporation, for the Holder to the effect that such
disposition will not require registration of such Warrant or Exercise Shares
under the Act or any applicable state securities laws.
4.
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(b) The Holder understands and agrees that all
certificates evidencing the shares to be issued to the Holder may bear the
following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT: OF
1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
(c) The Holder hereby agrees not to sell or otherwise
transfer or dispose of all or any part of this Warrant or the Exercise Shares
during a period specified by the representative of the underwriters of Common
Stock (not to exceed one hundred eighty (180) days) following the effective date
of the registration statement of the Corporation filed under the Act. Holder
further agrees that the Corporation may impose stop-transfer instructions with
respect to securities subject to the foregoing restrictions until the end of
such period.
(d) ACCREDITED INVESTOR. The Holder represents that it
is an accredited investor within the meaning of Regulation D of the Securities
Act.
5. ADJUSTMENT OF EXERCISE PRICE. In the event of changes in the
outstanding Preferred Stock of the Corporation by reason of stock dividends,
split-ups, recapitalizations, reclassifications, combinations or exchanges of
shares, separations, reorganizations, liquidations, or the like, the number and
class of shares available under the Warrant in the aggregate and the Exercise
Price shall be correspondingly adjusted to give the Holder of the Warrant, on
exercise for the same aggregate Exercise Price, the total number, class, and
kind of shares as the Holder would have owned had the Warrant been exercised
prior to the event and had the Holder continued to hold such shares until after
the event requiring adjustment; provided, however, that such adjustment shall
not be made with respect to, and this Warrant shall terminate if not exercised
prior to, the events set forth in Section 7 below. The form of this Warrant need
not be changed because of any adjustment in the number of Exercise Shares
subject to this Warrant.
6. FRACTIONAL SHARES. No fractional shares shall be issued upon
the exercise of this Warrant as a consequence of any adjustment pursuant hereto.
All Exercise Shares (including fractions) issuable upon exercise of this Warrant
may be aggregated for purposes of determining whether the exercise would result
in the issuance of any fractional share. If, after aggregation, the exercise
would result in the issuance of a fractional share, the Corporation shall, in
lieu of issuance of any fractional share, pay the Holder otherwise entitled to
such fraction a sum in cash equal to the product resulting from multiplying the
Exercise Price by such fraction.
7. EFFECT OF CERTAIN TRANSACTIONS. In the event of any capital
reorganization, or any reclassification of the capital stock of the Corporation
(other than a change in par value or from par value to no par value or no par
value to par value or as a result of a stock dividend or subdivision, split-up
or combination of shares), or the consolidation or merger of the Corporation
with or into another corporation (other than a merger solely to effect a
re-incorporation of the
5.
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Corporation into another state), or the sale or other disposition of all or
substantially all the properties and assets of the Corporation in its entirety
to any other person, lawful provision shall be made so that the Holder, on the
exercise hereof as provided in Section 1 at any time after the consummation of
such reorganization, reclassification, consolidation, merger, sale or other
disposition, as the case may be, shall be entitled to receive, in lieu of the
Preferred Stock issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which the Holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if the Holder had so
exercised this Warrant, immediately prior thereto.
8. NO STOCKHOLDER RIGHTS. This Warrant in and of itself shall not
entitle the Holder to any voting rights or other rights as a stockholder of the
Corporation.
9. TRANSFER OF WARRANT. Subject to applicable laws and the
restriction on transfer set forth on the first page of this Warrant, this
Warrant and all rights hereunder are transferable, by the Holder in person or by
duly authorized attorney, upon delivery of this Warrant and the form of as
assignment attached hereto to any transferee designated by Holder. The
transferee shall sign an investment letter in form and substance satisfactory
to the Corporation.
10. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant
is lost, stolen, mutilated or destroyed, the Corporation may, on such terms as
to indemnity or otherwise as it may reasonably impose (which shall, in the case
of a mutilated Warrant, include the surrender thereof), issue a new Warrant of
like denomination and tenor as the Warrant so lost, stolen, mutilated or
destroyed. Any such new Warrant shall constitute an original contractual
obligation of the Corporation, whether or not the allegedly lost, stolen,
mutilated or destroyed Warrant shall be at any time enforceable by anyone.
11. NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be sent by telex, telegram,
express mail or other form Of rapid communications, if possible, and if not then
such notice or communication shall be mailed by first-class mail, postage
prepaid, addressed in each case to the party entitled thereto at the following
addresses: (a) if to the Corporation, to PlanetOut Corporation, Attention:
President, 657 Harrison Street, San Francisco, CA 94107 and (b) if to the
Holder, to
AMERICA ONLINE, INC.
22000 AOL WAY
DULLES, VA 20166
ATTN: TED MAIDENBERG
or at such other address as one party may furnish to the other in writing.
Notice shall be deemed effective on the date dispatched if by personal delivery,
telecopy, telex or telegram, two days after mailing if by express mail, or three
days after mailing if by first-class mail.
12. ACCEPTANCE. Receipt of this Warrant by the Holder shall
constitute acceptance of and agreement to all of the terms and conditions
contained herein.
6.
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13. GOVERNING LAW. This Warrant and all rights, obligations and
liabilities hereunder shall be governed by the laws of the State of California.
7.
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IN WITNESS WHEREOF, the Corporation has caused this Amended and
Restated Warrant to be executed by its duly authorized officer as of March 21,
2001.
PLANETOUT CORPORATION
By /s/ Megan Smith
--------------------------------------
Megan Smith
Chief Executive Officer
ATTEST:
/s/ Michael Sullivan
-------------------------------------
Michael Sullivan
Secretary
ACKNOWLEDGED AND AGREED:
AMERICA ONLINE, INC.
_____________________________________
By:__________________________________
Name:________________________________
Title:_______________________________
8.