Exhibit 4.3
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AS AMENDED, OR ANY STATE SECURITIES
LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL (WHICH
MAY BE COMPANY COUNSEL) REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAWS.
WARRANT AGREEMENT
To Purchase Shares of the Series B
Preferred Stock of
OPENTABLE.COM,
INC.
Dated as of August 3, 1999 (the
“Effective Date”)
WHEREAS , OpenTable.com, a California corporation (the
“Company”) has entered into a Master Lease Agreement
dated as of August 3, 1999, Equipment Schedule No. VL-1
and VL-2 dated as of August 3, 1999 (collectively, the
“Schedules”), and related Summary Equipment Schedules
(collectively, the “Leases”) with Comdisco, Inc.,
a Delaware corporation (the “Warrantholder”);
and
WHEREAS , the Company desires to grant to Warrantholder,
in consideration for such Leases, the right to purchase shares of
its Series B Preferred Stock;
NOW , THEREFORE , in consideration of the
Warrantholder executing and delivering such Leases and in
consideration of mutual covenants and agreements contained herein,
the Company and Warrantholder agree as follows:
1.
GRANT OF THE RIGHT TO PURCHASE
PREFERRED STOCK .
The Company hereby grants to the
Warrantholder, and the Warrantholder is entitled, upon the terms
and subject to the conditions hereinafter set forth, to subscribe
to and purchase, from the Company, such number of fully paid and
non-assessable shares of the Company’s Series B
Preferred Stock (“Preferred Stock”) equal to $73,500.00
divided by the Exercise Price. For any portion of the
Commitment Amounts under the Schedules (as such term is defined in
the Schedules) utilized prior to the closing of the Next Round
(“Utilized Commitment Amount”), the number of shares
issuable hereunder shall be calculated by multiplying the Utilized
Commitment Amount by 4.9% divide by an Exercise Price equal to
$0.70 (“Exercise Price I”). The remaining number
of shares issuable hereunder shall equal the difference between the
Commitment Amounts under the Schedules and the Utilized Commitment
Amount multiplies by 4.9% divided by an Exercise Price equal to the
Next Round price per share (“Exercise Price II”).
Hereinafter the term Exercise Price shall mean both Exercise Price
I and Exercise Price II.
Next Round shall be defined as
(i) preferred stock financing of at least $2,000,000,
(ii) the sale, conveyance disposal, or encumbrance of all or
substantially all of the Company’s property or business or
Company’s merger into or consolidation with any other
corporation (other than a wholly-owned subsidiary corporation) or
any other transaction or series of related transactions in which
more than fifty percent (50%) of the voting power of Company is
disposed of (“Merger Event”), provided that a Merger
Event shall not apply to a merger effected exclusively for the
purpose of changing the domicile of the company or (iii) an
initial public offering of the Company’s Common Stock which
such public offering has been declared effective by the
SEC.
The number and purchase price of
such shares are subject to adjustment as provided in Section 8
hereof.
2.
TERM OF THE WARRANT
AGREEMENT .
Except as otherwise provided for
herein, the term of this Warrant Agreement and the right to
purchase Preferred Stock as granted herein shall commence on the
Effective Date and shall be exercisable for a period of
(i) ten (10) years or (ii) five (5) years from
the effective date of the Company’s initial public offering,
whichever is shorter.
Notwithstanding the term of this
Warrant Agreement fixed pursuant to the above paragraph, the right
to purchase Preferred Stock as granted herein shall expire, if not
previously exercised immediately upon the closing of a merger or
consolidation of the Company with or into another corporation when
the Company is not the surviving
1
corporation, or the sale of all or substantially
all of the Company’s properties and assets to any other
person (the “Merger”) provided in which Warrantholder
realizes a value for its shares equal to or greater that a per
share of at least 3 times the Exercise Price.
The Company shall notify the
Warrantholder if the Merger is proposed in accordance with the
terms of 8(f) hereof, and if the Company fails to deliver such
written notice, then notwithstanding anything to the contrary in
this Warrant Agreement, the rights to purchase the Company’s
Preferred Stock shall not expire until the Company complies with
such notice provisions. Such notice shall also contain such
details of the proposed Merger as are reasonable in the
circumstances. If such closing does not take place, the
Company shall promptly notify the Warrantholder that such proposed
transaction has been terminated, and the Warrantholder may rescind
any exercise of its purchase rights promptly after such notice of
termination of the proposed transaction if the exercise of Warrants
has occurred after the Company notified the Warrantholder that the
Merger was proposed. In the event of such recission, the
Warrants will continue to be exercisable on the same terms and
conditions contained herein.
3.
EXERCISE OF THE PURCHASE
RIGHTS .
The purchase rights set forth in
this Warrant Agreement are exercisable by the Warrantholder, in
whole or in part, at any time, or from time to time, prior to the
expiration of the term set forth in Section 2 above, by
tendering to the Company at its principal office a notice of
exercise in the form attached hereto as Exhibit I (the
“Notice of Exercise”), duly completed and
executed. Promptly upon receipt of the Notice of Exercise and
the payment of the purchase price in accordance with the terms set
forth below, and in no event later than twenty-one (21) days
thereafter, the Company shall issue to the Warrantholder a
certificate for the number of shares of Preferred Stock purchased
and shall execute the acknowledgment of exercise in the form
attached hereto as Exhibit II (the “Acknowledgment of
Exercise”) indicating the number of shares which remain
subject to future purchases, if any.
The Exercise Price may be paid at
the Warrantholder’s election either (i) by cash or
check, or (ii) by surrender of Warrants (“Net
Issuance”) as determined below. If the Warrantholder
elects the Net Issuance method, the Company will issue Preferred
Stock in accordance with the following formula:
X = Y(A-B)
A
|
Where:
|
X =
|
|
the number of shares of Preferred Stock to be
issued to the Warrantholder.
|
|
|
|
|
|
|
|
Y =
|
|
the number of shares of Preferred Stock
requested to be exercised under this Warrant Agreement.
|
|
|
|
|
|
|
|
A =
|
|
the fair market value of one (1) share of
Preferred Stock.
|
|
|
|
|
|
|
|
B =
|
|
the Exercise Price.
|
For purposes of the above
calculation, current fair market value of Preferred Stock shall
mean with respect to each share of Preferred Stock:
(i)
if the exercise is in connection
with an initial public offering of the Company’s Common
Stock, and if the Company’s Registration Statement relating
to such public offering has been declared effective by the SEC,
then the fair market value per share shall be the product of
(x) the initial “Price to Public” specified in the
final prospectus with respect to the offering and (y) the
number of shares of Common Stock into which each share of Preferred
Stock is convertible at the time of such exercise;
(ii)
if this Warrant is exercised after,
and not in connection with the Company’s initial public
offering, and:
(a)
if traded on a securities exchange,
the fair market value shall be deemed to be the product of
(x) the average of the closing prices over a five (5) day
period ending three days before the day the current fair market
value of the securities is being determined and (y) the number
of shares of Common Stock into which each share of Preferred Stock
is convertible at the time of such exercise; or
(b)
if actively traded over-the-counter,
the fair market value shall be deemed to be the product of
(x) the average of the closing bid and asked prices quoted on
the NASDAQ system (or similar system) over the five (5) day
period ending three days before the day the current fair
2
market value of the securities is
being determined and (y) the number of shares of Common Stock
into which each share of Preferred Stock is convertible at the time
of such exercise;
(iii)
if at any time the Common Stock is
not listed on any securities exchange or quoted in the NASDAQ
System or the over-the-counter market, the current fair market
value of Preferred Stock shall be the product of (x) the
highest price per share which the Company could obtain from a
willing buyer (not a current employee or director) for shares of
Common Stock sold by the Company, from authorized but unissued
shares, as determined in good faith by its Board of Directors and
(y) the number of shares of Common Stock into which each share
of Preferred Stock is convertible at the time of such exercise,
unless the Company shall become subject to a merger, acquisition or
other consolidation pursuant to which the Company is not the
surviving party, in which case the fair market value of Preferred
Stock shall be deemed to be the value received by the holders of
the Company’s Preferred Stock on a common equivalent basis
pursuant to such merger or acquisition.
Upon partial exercise by either cash
or Net Issuance, the Company shall promptly issue an amended
Warrant Agreement representing the remaining number of shares
purchasable hereunder. All other terms and conditions of such
amended Warrant Agreement shall be identical to those contained
herein, including, but not limited to the Effective Date
hereof.
4.
RESERVATION OF
SHARES .
(a)
Authorization
and Reservation of Shares . During the term of
this Warrant Agreement, the Company will at all times have
authorized and reserved a sufficient number of shares of its
Preferred Stock to provide for the exercise of the rights to
purchase Preferred Stock as provided for herein.
(b)
Registration
or Listing . If any shares of
Preferred Stock required to be reserved hereunder require
registration with or approval of any governmental authority under
any Federal or State law (other than any registration under the
Securities Act of 1933, as amended (“1933 Act”), as
then in effect, or any similar Federal statute then enforced, or
any state securities law, required by reason of any transfer
involved in such conversion), or listing on any domestic securities
exchange, before such shares may be issued upon conversion, the
Company will, at its expense and as expeditiously as possible, use
its best efforts to cause such shares to be duly registered, listed
or approved for listing on such domestic securities exchange, as
the case may be.
5.
NO FRACTIONAL SHARES OR
SCRIP .
No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of
the Warrant, but in lieu of such fractional shares the Company
shall make a cash payment therefor upon the basis of the Exercise
Price then in effect.
6.
NO RIGHTS AS
SHAREHOLDER .
This Warrant Agreement does not
entitle the Warrantholder to any voting rights or other rights as a
shareholder of the Company prior to the exercise of the
Warrant.
7.
WARRANTHOLDER
REGISTRY .
The Company shall maintain a
registry showing the name and address of the registered holder of
this Warrant Agreement.
8.
ADJUSTMENT
RIGHTS .
The purchase price per share and the
number of shares of Preferred Stock purchasable hereunder are
subject to adjustment, as follows.
(a)
Merger and
Sale of Assets . If at any time there
shall be a capital reorganization of the shares of the
Company’s stock (other than a combination, reclassification,
exchange or subdivision of shares otherwise provided for herein),
or a merger or consolidation of the Company with or into another
corporation whether or not the Company is the surviving
corporation, or the sale of all or substantially all of the
Company’s properties and assets to any other person
(hereinafter referred to as a “Merger Event”), then, as
a part of such Merger Event, lawful provision shall be made so that
the Warrantholder shall thereafter be entitled to receive, upon
exercise of the Warrant, the number of shares of preferred stock or
other securities of the successor corporation resulting from such
Merger Event, equivalent in value to that which would have been
issuable if Warrantholder had exercised this Warrant immediately
prior to the Merger Event. In any such case, appropriate
adjustment (as determined in good faith by the
3
Company’s
Board of Directors) shall be made in the application of the
provisions of this Warrant Agreement with respect to the rights and
interest of the Warrantholder after the Merger Event to the end
that the provisions of this Warrant Agreement (including
adjustments of the Exercise Price and number of shares of Preferred
Stock purchasable) shall be applicable to the greatest extent
possible.
(b)
Reclassification of
Shares . If the Company at any
time shall, by combination, reclassification, exchange or
subdivision of securities or otherwise, change any of the
securities as to which purchase rights under this Warrant Agreement
exist into the same or a different number of securities of any
other class or classes, this Warrant Agreement shall thereafter
represent the right to acquire such number and kind of securities
as would have been issuable as the result of such change with
respect to the securities which were subject to the purchase rights
under this Warrant Agreement immediately prior to such combination,
reclassification, exchange, subdivision or other
change.
(c)
Subdivision or
Combination of Shares . If the Company at any
time shall combine or subdivide its Preferred Stock, the Exercise
Price shall be proportionately decreased in the case of a
subdivision, or proportionately increased in the case of a
combination.
(d)
Stock
Dividends . If the Company at any
time shall pay a dividend payable in, or make any other
distribution (except any distribution specifically provided for in
the foregoing subsections (a) or (b)) of the Company’s
stock, then the Exercise Price shall be adjusted, from and after
the record date of such dividend or distribution, to that price
determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction (i) the numerator of
which shall be the total number of all shares of the
Company’s stock outstanding immediately prior to such
dividend or distribution, and (ii) the denominator of which
shall be the total number of all shares of the Company’s
stock outstanding immediately after such dividend or
distribution. The Warrantholder shall thereafter be entitled
to purchase, at the Exercise Price resulting from such adjustment,
the number of shares of Preferred Stock (calculated to the nearest
whole share) obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares of
Preferred Stock issuable upon the exercise hereof immediately prior
to such adjustment and dividing the product thereof by the Exercise
Price resulting from such adjustment.
(e)
Right to
Purchase Additional Stock . If, the
Warrantholder’s total cost of equipment leased pursuant to
the Leases exceeds $1,500,000, Warrantholder shall have the right
to purchase from the Company, at the Exercise Price (adjusted as
set forth herein), an additional number of shares, which number
shall be determined by (i) multiplying the amount by which the
Warrantholder’s total equipment cost exceeds $1,500,000 by
4.9%, and (ii) dividing the product thereof by the Exercise
Price per share referenced above.
(f)
Antidilution
Rights . Additional
antidilution rights applicable to the Preferred Stock purchasable
hereunder are as set forth in the Company’s Certificate of
Incorporation, as amended through the Effective Date, a true and
complete copy of which is attached hereto as Exhibit IV (the
“Charter”). The Company shall promptly provide
the Warrantholder with any restatement, amendment, modification or
waiver of the Charter. The Company shall provide
Warrantholder with prior written notice of any issuance of its
stock or other equity security to occur after the Effective Date of
this Warrant, which notice shall include (a) the price at
which such stock or security is to be sold, (b) the number of
shares to be issued, and (c) such other information as
necessary for Warrantholder to determine if a dilutive event has
occurred.
(g)
Notice of
Adjustments . If: (i) the
Company shall declare any dividend or distribution upon its stock,
whether in cash, property, stock or other securities; (ii) the
Company shall offer for subscription prorata to the holders of any
class of its Preferred or other convertible stock any additional
shares of stock of any class or other rights; (iii) there
shall be any Merger Event; (iv) there shall be an initial
public offering; or (v) there shall be any voluntary
dissolution, liquidation or winding up of the Company; then, in
connection with each such event, the Company shall send to the
Warrantholder: (A) at least twenty (20) days’ prior
written notice of the date on which the books of the Company shall
close or a record shall be taken for such dividend, distribution,
subscription rights (specifying the date on which the holders of
Preferred Stock shall be entitled thereto) or for determining
rights to vote in respect of such Merger Event, dissolution,
liquidation or winding up; (B) in the case of any such Merger
Event, dissolution, liquidation or winding up, at least twenty (20)
days’ prior written notice of the date when the same shall
take place (and specifying the date on which the holders of
Preferred Stock shall be entitled to exchange their Preferred Stock
for securities or other property deliverable upon such Merger
Event, dissolution, liquidation or winding up); and (C) in the
case of a public offering, the Company shall give the Warrantholder
at least twenty (20) days written notice prior to the effective
date thereof.
Each such written notice shall set
forth, in reasonable detail, (i) the event requiring the
adjustment, (ii) the amount of the adjustment, (iii) the
method by which such adjustment was calculated, (iv) the
Exercise Price, and (v) the number of shares subject to
purchase hereunder after giving effect to such adjustment, and
shall be given by
4
first class mail, postage prepaid, addressed to
the Warrantholder, at the address as shown on the books of the
Company.
(h)
Timely
Notice . Failure to timely
provide such notice required by subsection (g) above shall
entitle Warrantholder to retain the benefit of the applicable
notice period notwithstanding anything to the contrary contained in
any insufficient notice received by Warrantholder. The notice
period shall begin on the date Warrantholder actually receives a
written notice containing all the information specified
above.
9.
REPRESENTATIONS, WARRANTIES
AND COVENANTS OF THE COMPANY .
(a)
Reservation of
Preferred Stock . The Preferred Stock
issuable upon exercise of the Warrantholder’s rights has been
duly and validly reserved and, when issued in accordance with the
provisions of this Warrant Agreement, will be validly issued, fully
paid and non-assessable, and will be free of any taxes, liens,
charges or encumbrances of any nature whatsoever; provided,
however, that the Preferred Stock issuable pursuant to this Warrant
Agreement may be subject to restrictions on transfer under state
and/or Federal securities laws. The Company has made
available to the Warrantholder true, correct and complete copies of
its Charter and Bylaws, as amended. The issuance of
certificates for shares of Preferred Stock upon exercise of the
Warrant Agreement shall be made without charge to the Warrantholder
for any issuance tax in respect thereof, or other cost incurred by
the Company in connection with such exercise and the related
issuance of shares of Preferred Stock. The Company shall not
be required to pay any tax which may be payable in respect of any
transfer involved and the issuance and delivery of any certificate
in a name other than that of the Warrantholder.
(b)
Due
Authority . The execution and
delivery by the Company of this Warrant Agreement and the
performance of all obligations of the Company hereunder, including
the issuance to Warrantholder of the right to acquire the shares of
Preferred Stock, have been duly authorized by all necessary
corporate action on the part of the Company, and the Leases and
this Warrant Agreement are not inconsistent with the
Company’s Charter or Bylaws, do not contravene any law or
governmental rule, regulation or order applicable to it, do not and
will not contravene any provision of, or constitute a default
under, any indenture, mortgage, contract or other instrument to
which it is a party or by which it is bound, and the Leases and
this Warrant Agreement constitute legal, valid and binding
agreements of the Company, enforceable in accordance with their
respective terms.
(c)
Consents and
Approvals . No consent or
approval of, giving of notice to, registration with, or taking of
any other action in respect of any state, Federal or other
governmental authority or agency is required with respect to the
execution, delivery and performance by the Company of its
obligations under this Warrant Agreement, except for the filing of
notices pursuant to Regulation D under the 1933 Act and any filing
required by applicable state securities law, which filings will be
effective by the time required thereby.
(d)
Issued
Securities . All issued and
outstanding shares of Common Stock, Preferred Stock or any other
securities of the Company have been duly authorized and validly
issued and are fully paid and nonassessable. All outstanding
shares of Common Stock, Preferred Stock and any other securities
were issued in full compliance with all Federal and state
securities laws. In addition:
(i)
The authorized
capital of the Company consists of (A) 23,000,000 shares of
Common Stock, of which 7,063,917 shares are issued and outstanding,
and (B) 2,950,000 shares of Series A preferred stock, of
which 2,777,777 shares are issued and outstanding, and
(C) 3,600,000 shares of Series B preferred stock, of
which 2,892,858 shares are issued and outstanding.
(ii)
The Company has
reserved 2,740,000 shares of Common Stock for issuance under its
1999 Stock Option Plan, under which 804,500 options are outstanding
at an average price of $0.0781 per share. There are no other
options, warrants, conversion privileges or other rights presently
outstanding to purchase or otherwise acquire any authorized but
unissued shares of the Company’s capital stock or other
securities of the Company.
(iii)
In accordance
with the Company’s Articles of Incorporation, no shareholder
of the Company has preemptive rights to purchase new issuances of
the Company’s capital stock.
(e)
Insurance
. The
Company has in full force and effect insurance policies, with
extended coverage, insuring the Company and its property and
business against such losses and risks, and in such amounts, as are
customary for corporations engaged in a similar business and
similarly situated and as otherwise may be required pursuant to the
terms of any other contract or agreement.
5
(f)
Other
Commitments to Register Securities . Except as set forth
in that certain Amended and Restated Investor Rights Agreement
dated as of May 18, 1999, the Company is not, pursuant to the
terms of any other agreement currently in existence, under any
obligation to register under the 1933 Act any of its presently
outstanding securities or any of its securities which may hereafter
be issued.
(g)
Exempt
Transaction . Subject to the
accuracy of the Warrantholder’s representations in
Section 10 hereof, the issuance of the Preferred Stock upon
exercise of this Warrant will constitute a transaction exempt from
(i) the registration requirements of Section 5 of the
1933 Act, in reliance upon Section 4(2) thereof, and
(ii) the qualification requirements of the applicable state
securities laws.
(h)
Compliance
with Rule 144 . At the written
request of the Warrantholder, who proposes to sell Preferred Stock
issuable upon the exercise of the Warrant in compliance with
Rule 144 promulgated by the Securities and Exchange
Commission, the Company shall furnish to the Warrantholder, within
ten days after receipt of such request, a written statement
confirming the Company’s compliance with the filing
requirements of the Securities and Exchange Commission as set forth
in such Rule, as such Rule may be amended from time to
time.
10.
REPRESENTATIONS AND COVENANTS
OF THE WARRANTHOLDER .
This Warrant Agreement has been
entered into by the Company in reliance upon the following
representations and covenants of the Warrantholder:
(a)
Investment
Purpose . The right to acquire
Preferred Stock or the Preferred Stock issuable upon exercise of
the Warrantholder’s rights contained herein will be acquired
for investment and not with a view to the sale or distribution of
any part thereof, and the Warrantholder has no present intention of
selling or engaging in any public distribution of the same except
pursuant to a registration or exemption.
(b)
Private
Issue . The Warrantholder
understands (i) that the Preferred Stock issuable upon
exercise of this Warrant is not registered under the 1933 Act or
qualified under applicable state securities laws on the ground that
the issuance contemplated by this Warrant Agreement will be exempt
from the registration and qualifications requirements thereof, and
(ii) that the Company’s reliance on such exemption is
predicated on the representations set forth in this
Section 10.
(c)
Disposition of
Warrantholder’s Rights . In no event will the
Warrantholder make a disposition of any of its rights to acquire
Preferred Stock or Preferred Stock issuable upon exercise of such
rights unless and until (i) it shall have notified the Company
of the proposed disposition, and (ii) if requested by the
Company, it shall have furnished the Company with an opinion of
counsel (which counsel may either be inside or outside counsel to
the Warrantholder) satisfactory to the Company and its counsel to
the effect that (A) appropriate action necessary for
compliance with the 1933 Act has been taken, or (B) an
exemption from the registration requirements of the 1933 Act is
available. Notwithstanding the foregoing, the restrictions
imposed upon the transferability of any of its rights to acquire
Preferred Stock or Preferred Stock issuable on the exercise of such
rights do not apply to transfers from the beneficial owner of any
of the aforementioned securities to its nominee or from such
nominee to its beneficial owner, and shall terminate as to any
particular share of Preferred Stock when (1) such security
shall have been effectively registered under the 1933 Act and sold
by the holder thereof in accordance with such registration or
(2) such security shall have been sold without registration in
compliance with Rule 144 under the 1933 Act, or (3) a
letter shall have been issued to the Warrantholder at its request
by the staff of the Securities and Exchange Commission or a ruling
shall have been issued to the Warrantholder at its request by such
Commission stating that no action shall be recommended by such
staff or taken by such Commission, as the case may be, if such
security is transferred without registration under the 1933 Act in
accordance with the conditions set forth in such letter or ruling
and such letter or ruling specifies that no subsequent restrictions
on transfer are required. Whenever the restrictions imposed
hereunder shall terminate, as hereinabove provided, the
Warrantholder or holder of a share of Preferred Stock then
outstanding as to which such restrictions have terminated shall be
entitled to receive from the Company, without expense to such
holder, one or more new certificates for the Warrant or for such
shares of Preferred Stock not bearing any restrictive
legend.
(d)
Financial
Risk .&n
|
