Exhibit 10.26
Exhibit D
NEITHER THE SECURITY EVIDENCED BY THIS WARRANT NOR THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY APPLICABLE STATE LAW, AND NO INTEREST HEREIN OR THEREIN MAY
BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
(A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING SAID SECURITIES,
(B) THE COMPANY RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE HOLDER OF SAID
SECURITIES (REASONABLY CONCURRED WITH BY LEGAL COUNSEL FOR THE COMPANY) STATING
THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THE COMPANY OTHERWISE
SATISFIES ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION. FURTHERMORE,
THIS WARRANT MAY NOT, UNDER ANY CIRCUMSTANCES, BE TRANSFERRED BY THE HOLDER
HEREOF WITHOUT THE PRIOR WRITTEN CONSENT OF THE ISSUER, SUCH CONSENT NOT TO BE
UNREASONABLY WITHHELD, AND ANY SUCH TRANSFER IN CONTRAVENTION OF THE FOREGOING
SHALL BE NULL AND VOID.
No. _____
ISSUED: August 31, 1999
VOID AFTER: August 31, 2001
DELPHI INFORMATION SYSTEMS, INC.
WARRANT
THIS IS TO CERTIFY that, subject to the terms and conditions hereof,
InfoSpace.com, Inc. (the "Holder") or assigns is entitled, at any time on or
after the date hereof, but not later than 5:00 p.m. Chicago time, on August 31,
2001 (the "Exercise Period"), subject to the provisions hereof, to purchase in
whole or from time to time in part up to 4.9% of the shares of Common Stock of
the Company outstanding on the date hereof (on a fully diluted basis including
the Conversion Warrant and the Warrant, as defined in the Promotion Agreement),
fully paid and nonassessable shares of Common Stock, $.10 par value per share,
of Delphi Information Systems, Inc., a Delaware corporation (the "Company"), at
a price of $15.00 per share for the period from the date hereof until August 31,
2000 and, thereafter, $20.00 per share between August 31, 2000 and August 31,
2001 (the "Exercise Price") (such number of shares subject to this Warrant and
such Exercise Price being subject to adjustment as provided in Section 5
hereof). As used herein, the term "Warrant Stock" shall mean the Company's
Common Stock. This Warrant is being issued pursuant to an Internet Promotion
Agreement dated as of August 31, 1999 between the Holder and the Company (the
"Promotion Agreement"). All capitalized terms used but nor otherwise defined
herein shall have the meaning ascribed to such terms in the Promotion Agreement.
Notwithstanding the foregoing, in the event that the Promotion Agreement is
terminated for any reason whatsoever, this Warrant shall terminate in its
entirety.
1. Exercise
This Warrant may be exercised by the Holder simultaneously with the
delivery of its quarterly invoice for Fees by delivering to the Company
simultaneously with such invoice, at the address of the Company set forth in
Section 17, (a) the form of Exercise Notice attached hereto duly completed and
executed by the Holder and (b) this Warrant certificate. Upon any such exercise,
the Holder will be deemed to have converted an amount of Fees equal to the
Exercise Price multiplied by the number of shares for which this Warrant is
being exercised (the "Purchase Price"); provided, that the Purchase Price may
not exceed the amount of unpaid fees indicated on such invoice. The Holder will
be deemed to be the holder of record of the shares of Common Stock as to which
the Warrant was exercised in accordance with this Warrant, effective at the
close of business, Chicago time, on the date such exercise is completed and all
documents specified above are delivered to the Company, and the Fees converted
into Warrant Shares shall be deemed to have been irrevocably paid in full as of
such time.
2. Delivery of Stock Certificate
Within twenty days after the exercise of this Warrant (in full or in
part), the Company at its expense shall issue in the name of and deliver to the
Holder (a) a certificate or certificates for the number of fully paid and
nonassessable shares of Warrant Stock to which the Holder shall be entitled upon
such exercise and (b) if applicable, a new Warrant of like tenor to purchase up
to that number of shares of Warrant Stock, if any, as to which this Warrant
shall not have been previously exercised by the Holder or repurchased by the
Company.
3. Covenants as to Warrant Stock
The Company covenants and agrees that the Company will at all times have
authorized and reserved a sufficient number of shares of Warrant Stock to
provide for the exercise of the rights represented by this Warrant. The Company
further covenants that all shares of Warrant Stock which may be issued upon the
exercise of the rights represented by this Warrant, will, upon issuance, be
validly issued, fully paid and non-assessable and free from all taxes, liens
and charges solely with respect to the issuance thereof. The Company further
covenants and agrees that the Company will from time to time take all such
action as may be requisite to assure that the stated or par value per share of
Warrant Stock is at all times equal to or less than the then effective Exercise
Price per share of Warrant Stock issuable upon exercise of this Warrant. If and
so long as the Common Stock issuable upon the exercise of the rights represented
by this Warrant is listed on any national securities exchange or quotation
system, the Company will, if permitted by the rules of such exchange or
quotation system, use its best efforts to list and keep listed on such exchange
or quotation system, upon official notice of issuance, all shares of such
capital stock.
4. Termination Upon Reorganization
Simultaneous with the closing of a merger, consolidation, acquisition of
all or substantially all of the assets or stock, of the Company by another
entity (the "Surviving Entity") as a result of which the stockholders of the
Company will own less than 50% of the voting capital stock of the surviving
entity or the entity that controls such surviving entity immediately after the
transaction or,
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in the case of a sale of assets, the Company will own after the transaction less
than 50% of the assets owned by the Company prior to the transaction
(collectively, a "Reorganization") prior to the expiration of the Exercise
Period, as a result of which the stockholders of the Company receive cash, stock
or other property in respect of their shares of Warrant Stock, this Warrant
shall be canceled and all rights granted hereunder shall terminate; provided,
however, that (a) the Company shall have delivered to the Holder notice of the
Reorganization no less than ten (10) business days before the date scheduled for
closing of the Reorganization, and (b) at the closing of such Reorganization
this Warrant will be exchanged for a warrant to purchase such kind and number of
shares of capital stock or other securities or property of the Company or the
Surviving Entity to which the Holder would have been entitled if it had held the
Warrant Stock issuable upon the exercise hereof immediately prior to such
Reorganization, which warrant shall have the same terms and conditions hereof.
5. Adjustments for Certain Issuances
5.1 Stock Splits and Reverse Stock Splits
If the Company shall issue any shares of Warrant Stock as a stock dividend
or subdivide the number of outstanding shares of Warrant Stock into a. greater
number of shares, then, in either such case, the Exercise Price in effect before
such dividend or subdivision shall be proportionately reduced and the number of
shares of Warrant Stock at that time purchasable pursuant to this Warrant shall
be proportionately increased; and, conversely, if the Company shall reduce the
number of outstanding shares of Warrant Stock by combining such shares into a
smaller number of shares, then the Exercise Price in effect before such
combination shall be proportionately increased and the number of shares of
Warrant Stock at that time purchasable pursuant to this Warrant shall be
proportionately decreased. Upon each adjustment in the Exercise Price pursuant
to this Section 5, the number of shares of Warrant Stock purchasable hereunder
shall be adjusted, to the nearest whole share, to the product obtained by
multiplying such number of shares purchasable immediately prior to such
adjustment in the Exercise Price by a fraction, the numerator of which shall be
the Exercise Price immediately prior to such adjustment and the denominator of
which shall be the Exercise Price immediately thereafter. The Holder shall be
entitled to the same notice and information regarding such dividend or
subdivision as is furnished to holders of Warrant Stock, which notice shall be
sent to the Holder no later than the date such notice is sent to all holders of
Warrant Stock.
5.2 Other Dividends and Distributions
In case the Company shall take a record of the holders of its Warrant
Stock (or other stock or securities at the time receivable upon the exercise of
this Warrant) for the purpose of entitling them in receive any dividend or other
distribution other than as described in Section 5.1, or any right to subscribe
for or purchase any shares of stock of any class or any other securities, or to
receive any other right, then the Company will mail or cause to be mailed to the
Holder a notice specifying the date on which a record is to be taken for the
purpose of such dividend, distribution or right (the "Record Date"), and stating
the amount and character of such dividend, distribution or right. Such notice
shall be mailed at least 5 days prior to the Record Date therein specified.
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6. Fractional Shares
No fractional shares shall be issued upon the exercise of this Warrant. In
lieu of fractional shares, the Company shall pay the Holder a sum in cash equal
to the fair market value of the fractional shares (as determined under paragraph
1.3 above) on the date of exercise.
7. Restrictions on Transfer
This Warrant may not be transferred by the Holder without the prior
written consent of the Company, which consent shall not be unreasonably
withheld. Any transfer of this Warrant in contravention of the foregoing
shall be null and void. In addition, neither this Warrant nor any securities
purchased upon exercise of this Warrant may be transferred unless (a) such
transfer is registered under the Securities Act of 1933, as amended (the
"Securities Act"), and any applicable state securities or blue sky laws, (b)
the Company has received a legal opinion reasonably satisfactory to the
Company to the effect that the transfer is exempt from the prospectus
delivery and registration requirements of the Securities Act and any
applicable state securities or blue sky laws, or (c) the Company otherwise
satisfies itself that such transfer is exempt from registration.
8. Legend
A legend setting forth or referring to the above restrictions shall be
placed on this Warrant, any replacement hereof and any certificate representing
a security issued pursuant to the exercise hereof, and a stop transfer
restriction or order shall be placed on the books of the Company and with any
transfer agent until such securities may be legally sold or otherwise
transferred; provided, however, that such legend shall not be required and a
stop transfer restriction order shall not be placed if (i) in the opinion of
counsel to the Holder (reasonably concurred with by counsel to the Company)
registration of any future transfer is not required by the applicable provisions
of the Securities Act or (ii) the Company shall have waived the requirements of
such legends.
9. Holder its Owner
Subject to the terms of Section 7, the Company may deem and treat the
Holder of this Warrant as the absolute owner hereof for all purposes regardless
of any notice to the contrary.
10. Warrantholder Rights
10.1 Registration Rights in Connection with Warrant Stock
Upon exercise of all or part of this Warrant, the holder of the Warrant
Stock shall be entitled to the registration rights with respect to the Warrant
Stock set forth in Exhibit E of the Promotion Agreement.
10.2 No Rights As a Stockholder
Other than as set forth in Section 10.1 above, this Warrant shall not
entitle the Holder to any voting rights or any other rights as a stockholder of
the Company or to any other rights whatsoever except the rights stated herein;
and except as otherwise provided herein, no dividend or interest shall
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be payable or shall accrue in respect of this Warrant or the Warrant Stock
purchasable hereunder unless, until and to the extent that this Warrant shall be
exercised.
11. Construction
The validity and interpretation of the terms and provisions of this
Warrant shall be governed by the laws of the State of Delaware. The descriptive
headings of the several sections of this Warrant are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions thereof.
12. Expiration
This Warrant shall be void and all rights represented thereby shall cease
unless exercised during the Exercise Period. All restrictions set forth herein
on the shares of capital stock issued upon exercise of any rights hereunder
shall survive such exercise and expiration of the rights granted hereunder.
13. Exchange of Warrant
This Warrant is exchangeable upon the surrender hereof by the Holder at
the office of the Company for new Warrants of like tenor representing in the
aggregate the rights to subscribe for and purchase the number of shares which
may be subscribed for and purchased hereunder, each of such new Warrants to
represent the right to subscribe for and purchase such number of shares as shall
be designated by the Holder at the time of such surrender.
14. Lost Warrant Certificate
If this Warrant is lost, stolen, mutilated or destroyed, the Company
shall, upon request in writing from the Holder and subject to compliance by
Holder with the following sentence, issue a new Warrant of like denomination,
tenor and date as this Warrant, subject to the Company's right to require the
Holder to give the Company a bond or other satisfactory security sufficient to
indemnify the Company against any claim that may be made against it (including
any expense or liability) on account of the alleged loss, theft, mutilation or
destruction of this Warrant or the issuance of such new Warrant. The Holder
shall reimburse the Company for any and all expenses and costs incurred by the
Company in connection with issuing a new Warrant under this Section.
15. Waivers and Amendments
This Warrant or any provision hereof may be changed, waived, discharged or
terminated only by a statement in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought.
16. Successors and Assigns.
This Warrant shall be binding upon the Company and inure to the benefit of
InfoSpace.com and its successors and assigns.
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17. Notices.
All notices or other communications required or permitted hereunder shall
be in writing and shall be delivered by personal delivery, reputable overnight
courier service, telecopier or mailed by United States mail, first-class postage
prepaid, or by registered or certified mail with return receipt requested,
addressed as follows:
If to the Holder:
InfoSpace.com, Inc.
15375 N.E. 90th Street
Redmond, WA 98052
Fax: (425) 883-4846
Attention: General Counsel
If to the Company:
Delphi Information Systems, Inc.
3501 Algonquin Road
Suite 500
Rolling Meadows, Illinois 60008
Attention: Chief Financial Officer
With copies to: Delphi Information Systems, Inc. Law Department
Each of the foregoing parties shall be entitled to specify a different address
by giving five days' advance written notice as aforesaid to the other parties.
All such notices and communications shall be deemed to have been received (i) in
the case of personal delivery, on the date of such delivery and (ii) in the case
of mailing, on the third business day following the date of such mailing.
18. Investment Intent
By accepting this Warrant, the Holder represents that it is acquiring this
Warrant (and upon exercise hereof will acquire any Warrant Stock) for investment
and not with a view to, or for sale in connection with, any distribution
thereof. Furthermore, the Company reserves the right, in connection with the
exercise hereof, to require the Holder hereof to make appropriate
representations and warranties regarding their status as an accredited investor
and their investment intent, as the Company (in consultation with its counsel)
determines to be necessary or appropriate.
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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
first written above.
DELPHI INFORMATION SERVICES, INC.
By: /s/ Richard J. Baum
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Its: CFO
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ACCEPTED AND AGREED:
InfoSpace.com, Inc.
By: /s/ Bernee D.L. Strom
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Its: President & CEO
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Date: 8/31/97
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NOTICE OF EXERCISE
TO DELPHI INFORMATION SYSTEMS, INC.
1. The undersigned hereby elects to purchase _____________ shares
of Common Stock of Delphi Information Systems, Inc. pursuant
to the terms of the attached Warrant.
2. The undersigned elects to exercise the attached Warrant by the
conversion of $ _____ of the outstanding Fee reflected on the
attached invoice.
3. Please issue a certificate or certificates representing said
shares of Warrant Stock in the name of the undersigned or in
such other name as is specified below:
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(Name)
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(Address)
4. The undersigned hereby agrees with and represents to the
Company that said shares of common stock are acquired for
investment and not with a view to, or for sale in connection
with, any distribution or public offering thereof within the
meaning of the Securities Act of 1933, as amended, and agrees
that the exercise of the Warrant and the issuance and transfer
of the common stock to be purchased are subject to Section 7
of the Warrant.
Dated:
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Holder
By:
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Its:
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