AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
---------
LEISUREPLANET HOLDINGS, LTD.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Bermuda Not Applicable
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Clarendon House Clive Kabatznik Copy to:
Church Street President Henry I. Rothman, Esq.
Hamilton HM CX First South Africa Management Corp. Parker Chapin Flattau & Klimpl,
Bermuda 1348 Washington Avenue, Suite 155 LLP
(441) 295-1422 Miami, Florida 33139 1211 Avenue of the Americas
(Address, including zip code, and (305) 857-5009 New York, New York 10036
telephone number, including area (Name, address, including zip code, and Tel: (212) 704-6000
code, of registrant's principal telephone Fax: (212) 704-6288
executive offices) number, including area code, of agent for
service)
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time
to time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. |_| _______________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, please check the following box and list the
Securities Act registration number of the earlier effective registration
statement for the same offering. |_|__________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
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<CAPTION>
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CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER SHARE OFFERING PRICE REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of Common Stock par
value $.01 per share 1,379,310 $10.09375(1) $13,922,410.31 $3,675.52
- --------------------------------------------------------------------------------------------------------------------
Shares of Common Stock par
value $.01 per share 135,000(2) $6.00 $810,000 $213.84
- --------------------------------------------------------------------------------------------------------------------
Shares of Common Stock par
value $.01 per share 800,000(3) $6.00 $4,800,000 $1,267.20
- --------------------------------------------------------------------------------------------------------------------
Shares of Common Stock par
value $.01 per share 720,000(2) $.01 $7,200 $1.90
- --------------------------------------------------------------------------------------------------------------------
Shares of Common Stock par
value $.01 per share 120,620 $10.09375(1) $1,217,508.13 $321.42
- --------------------------------------------------------------------------------------------------------------------
Shares of Common Stock par
value $.01 per share 11,617 $10.09375(1) $117,259.09 $30.96
- --------------------------------------------------------------------------------------------------------------------
Total
$20,874,377.53 $5,510.84
- ----------------------------- -------------- --------------------------- -------------------- ----------------------
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(1) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act of 1933, as amended;
based on the average bid and ask prices on the Nasdaq National Market
on January 25, 2000.
(2) Issuable upon exercise of certain warrants.
(3) Issuable upon exercise of certain unit purchase options and securities
underlying such unit purchase options.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION DATED JANUARY 28, 2000
PROSPECTUS
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3,166,547 Shares of Common Stock
(par value $.01 per share)
LEISUREPLANET HOLDINGS, LTD.
- --------------------------------------------------------------------------------
The shareholders of Leisureplanet Holdings, Ltd. listed on page 19 of
this Prospectus are offering to sell under this Prospectus up to an aggregate of
3,166,547 shares of our common stock. We issued 1,379,310 shares of our common
stock to one of the selling shareholders in a private placement under a purchase
agreement in December 1999. Another 135,000 shares of our common stock are
issuable upon exercise of a warrant which we issued as a placement fee in
connection with a private placement of debentures in 1997. An aggregate of
another 800,000 shares of our common stock are issuable upon exercise of certain
unit purchase options and class A and class B warrants underlying such unit
purchase options. The unit purchase options were issued to the underwriter of
our initial public offering in January 1996. Another 720,000 shares of our
common stock are issuable upon exercise of another warrant issued to one of our
co-branding partners in June 1999. The remaining 132,237 shares of our common
stock may be offered by an escrow agent pursuant to escrow agreements between
us, the escrow agent and various former shareholders of certain of our lifestyle
products companies.
The selling shareholders may offer their shares from time to time on
any stock exchange, market or trading facility on which our shares are traded or
in private transactions. These sales may be at fixed or negotiated prices.
The selling shareholders will receive all net proceeds from the sale of
the shares. We will not receive any of the proceeds from the sale of the shares
being sold under this Prospectus. We have agreed to bear the expenses relating
to the registration of the shares, other than brokerage commissions and
expenses, if any, and fees and expenses of counsel or other advisers, if any, to
the selling shareholders, all of which will be paid by the selling shareholders.
Our common stock is traded on The Nasdaq National Market under the
symbol LPHL. On January 25, 2000, the closing price of our common stock on such
market was $10.1875 per share.
Our principal executive offices are located at Clarendon House, Church
Street, Hamilton HM CX Bermuda, and our telephone number at such location is
(441) 295-1422.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. YOU
SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE CAPTION
"INVESTMENT CONSIDERATIONS" ON PAGE 4 OF THIS PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------------
The date of this Prospectus is __________ __, 2000
<PAGE>
TABLE OF CONTENTS
PAGE
----
WHERE YOU CAN FIND MORE INFORMATION ABOUT US...................................3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE................................3
RISK FACTORS...................................................................4
USE OF PROCEEDS...............................................................18
DIVIDEND POLICY...............................................................18
SELLING SHAREHOLDERS .........................................................18
DESCRIPTION OF SECURITIES.....................................................20
PLAN OF DISTRIBUTION .........................................................27
LEGAL MATTERS.................................................................28
EXPERTS ......................................................................28
2
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WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from the SEC's Website at "http://www.sec.gov."
We have filed with the SEC a registration statement on Form S-3 to
register shares of our common stock. This Prospectus is part of that
registration statement and, as permitted by the SEC's rules, does not contain
all the information included in the registration statement. For further
information with respect to us and our common stock, you may refer to the
registration statement and to the exhibits and schedules filed as part of that
registration statement. You can review and copy the registration statement and
its exhibits and schedules at the public reference facilities maintained by the
SEC as described above. The registration statement, including its exhibits and
schedules, is also available on the SEC's web site.
This Prospectus may contain summaries of contracts or other documents.
Because they are summaries, they will not contain all of the information that
may be important to you. If you would like complete information about a contract
or other document, you should read the copy filed as an exhibit to the
registration statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be a part of this Prospectus, and information that we file later
with the SEC will automatically update or supersede this information. We
incorporate by reference the documents listed below and any future filing we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:
1. Annual Report on Form 10-K for the fiscal year ended June 30,
1999;
2. Quarterly Reports on Form 10-Q for the period ended September 30,
1999;
3. The description of our common stock contained in the Registration
Statement on Form 8-A, which was filed with the SEC on January 1,
1996 (File No. 0-24624) as amended on Form 8-A/A (filed on
January 16, 1996).
You may request a copy of these filings, at no cost, by writing or
telephoning us at First South Africa Management Corp., 1348 Washington Avenue,
Suite 155, Miami, Florida 33139, (305) 857-5009, Attention: Mr. Clive Kabatznik.
3
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RISK FACTORS
BEFORE YOU BUY SHARES OF OUR COMMON STOCK, YOU SHOULD BE AWARE THAT
THERE ARE VARIOUS RISKS ASSOCIATED WITH SUCH PURCHASE, INCLUDING THOSE DESCRIBED
BELOW. YOU SHOULD CONSIDER CAREFULLY THESE RISK FACTORS, TOGETHER WITH ALL OF
THE OTHER INFORMATION IN THIS PROSPECTUS BEFORE YOU DECIDE TO PURCHASE SHARES OF
OUR COMMON STOCK.
SOME OF THE INFORMATION IN THIS PROSPECTUS MAY CONTAIN FORWARD-LOOKING
STATEMENTS. SUCH STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
WORDS SUCH AS "MAY," "WILL," "EXCEPT," "ANTICIPATE," "INTEND," "ESTIMATE,"
"CONTINUE," "BELIEVE," OR OTHER SIMILAR WORDS. THESE STATEMENTS DISCUSS FUTURE
EXPECTATIONS, CONTAIN PROJECTIONS OF OUR FUTURE RESULTS OF OPERATIONS OR
FINANCIAL CONDITION OR STATE OTHER "FORWARD-LOOKING" INFORMATION. WHEN
CONSIDERING SUCH STATEMENTS, YOU SHOULD KEEP IN MIND THE RISK FACTORS AND OTHER
CAUTIONARY STATEMENTS IN THIS PROSPECTUS. THE RISK FACTORS NOTED IN THIS SECTION
AND OTHER FACTORS NOTED IN THIS PROSPECTUS COULD CAUSE OUR ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENTS.
RISKS RELATED TO OUR ONLINE TRAVEL OPERATIONS
OUR ONLINE TRAVEL SERVICES BUSINESS HAS RECEIVED MINIMAL REVENUE, IS NOT
PROFITABLE AND WE EXPECT THAT IT WILL CONTINUE TO INCUR SUBSTANTIAL LOSSES.
Our revenue to date in our online travel services business has been
minimal. In addition, our online travel services business incurred net losses of
approximately $6.5 million during the period from February 23, 1999 (the date we
acquired the business) through June 30, 1999, and has incurred net losses of $7
million thus far in fiscal 2000. We expect our online travel services business
to continue to incur substantial losses for the foreseeable future. The
principal causes of our losses are likely to continue to be significant brand
development costs, marketing and promotion costs and technology and systems
development costs. There can be no assurance that our online travel services
business will ever achieve significant revenues or profitability, and failure to
do so could have a negative effect on our operating results and stock price.
WE RELY ON OUR RELATIONSHIPS WITH LYCOS-BERTELSMANN, YAHOO!, INFOSPACE, NOMADE
AND CNN TO DEVELOP OUR BRAND AND INCREASE TRAFFIC TO OUR WEB SITES. A FAILURE OF
THESE RELATIONSHIPS TO DELIVER THE EXPECTED TRAFFIC OR A TERMINATION OF THESE
RELATIONSHIPS COULD ADVERSELY EFFECT THE VALUE OF YOUR INVESTMENT.
In order to enhance our brand and increase traffic to our web sites, we
entered into co-branding agreements with Lycos-Bertelsmann, Yahoo!, InfoSpace,
Nomade and CNN pursuant to which we operate a co-branded version of the
leisureplanet.com web site on their respective sites. During the terms of these
agreements, we are obligated to make minimum monthly payments to our partners
and, in the case of CNN, to advertise on its networks. The cost of these
commitments is expected to exceed $15 million during year 2000. We expect that
these substantial financial commitments will cause us to experience increasing
operating losses for the foreseeable future. In addition, there can be no
assurance that we will achieve sufficient online traffic, travel bookings or
commissions that justify our significant fixed financial obligations to
Lycos-Bertelsmann, Yahoo!, InfoSpace, Nomade and CNN, and failure to do so would
likely have a material adverse effect on our operating results and stock price.
Also, our agreements with Lycos-Bertelsmann, Yahoo!, InfoSpace, Nomade and CNN
do not provide us with renewal rights upon expiration of their respective terms.
There can be no assurance that such agreements will be renewed on commercially
acceptable terms, or at all.
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<PAGE>
Furthermore, our significant investment in our relationships with
Lycos-Bertelsmann, Yahoo!, InfoSpace, Nomade and CNN is based on the continued
positive market presence, reputation and anticipated growth of their web sites.
Any decline in the significant market presence, business or reputation of any of
them or their web sites will reduce the value of these strategic agreements to
us.
Except for our arrangements with Lycos-Bertelsmann, Yahoo!, InfoSpace,
Nomade and CNN, we have no other long-term distribution arrangements with any
other service provider on the Internet or commercial online services and
accordingly must rely on search engines, directories and other navigational
tools to direct traffic to our web sites. There can be no assurance that such
cooperation will be available to us on acceptable commercial terms or at all or
that such relationships will not already be established with our competitors. If
we are unable to maintain satisfactory relationships with Lycos-Bertelsmann,
Yahoo!, InfoSpace, Nomade and CNN, or if we are unable to develop and maintain
satisfactory relationships with additional third parties on acceptable
commercial terms, or if our competitors are better able to leverage such
relationships, our operating results and stock price could be materially
adversely affected.
Our future success depends in part upon our ability to maintain our
relationships with Lycos-Bertelsmann, Yahoo!, InfoSpace, Nomade and CNN. Our
agreements with them may be terminated in the event that we fail to make our
minimum payments or meet their operating criteria. There can be no assurance
that we will be able to meet our significant financial obligations to
Lycos-Bertelsmann, Yahoo!, InfoSpace, Nomade and CNN, and termination of these
agreements would likely have a material adverse effect on our operating results
and stock price.
OUR SUCCESS DEPENDS ON GROWTH OF OUR ONLINE SALES. BECAUSE WE HAVE A LIMITED
ONLINE OPERATING HISTORY, WE CANNOT BE SURE THAT OUR ONLINE SALES WILL GROW.
Our future success is heavily dependent upon growth of the online
operations of our online travel subsidiary LPI Limited, which was organized in
1995 and which we have operated since February, 1999. We believe the ability to
grow our online operations will depend upon a number of factors, many of which
we do not control.
These factors include, among others:
o Increased market acceptance of e-commerce. While e-commerce
has grown rapidly to date, there is no guarantee that this
growth will continue or that our business will benefit from
this growth.
o Our success in establishing brand awareness and increasing web
site traffic through online and offline marketing, and
strategic relationships.
o Increased customer acceptance of our automated online booking
system. Booking travel has traditionally involved intensive
human contact, and we do not know if customers will accept our
system as a substitute for personal interaction.
o Increased customer acceptance of our independent hotel
inventory.
o Our ability to provide a fast, easy to use, reliable and
secure online shopping experience.
o Our ability to build customer loyalty and increase the
percentage of visitors to our web sites who make travel
purchases.
5
<PAGE>
If we are unable to take advantage of growth in e-commerce, or to
successfully meet any of the foregoing challenges, we may not be able to grow
our online travel business and our operating results and our stock price would
be adversely affected.
OUR OPERATING RESULTS ARE SUBJECT TO QUARTERLY FLUCTUATIONS AND OUR REVENUE IS
UNPREDICTABLE. FUTURE FLUCTUATIONS IN OPERATING RESULTS OR REVENUE SHORTFALLS
COULD ADVERSELY AFFECT THE VALUE OF YOUR INVESTMENT.
Because we have a limited operating history in e-commerce and because
of the emerging nature of the markets in which we compete, our revenue is highly
unpredictable. At the same time, our current and future expense levels are based
on our operating plans and are to a large extent fixed. We are unlikely to be
able to adjust spending quickly to compensate for any revenue shortfall. As a
result, any significant revenue shortfall would have an immediate negative
effect on our results of operations and stock price.
We expect to experience significant fluctuations in our future
quarterly operating results due to a variety of factors, many of which we do not
control. Factors that may adversely affect our quarterly operating results
include, but are not limited to:
o our inability to successfully replicate our business model in
new destination markets;
o our inability to develop strong brand recognition, build
customer loyalty and attract new and repeat customers;
o our inability to increase the level of traffic on our web
sites;
o our inability to retain or expand our hotel and airfare supply
arrangements or reductions in discounts we receive on these
travel services;
o decreases in commission rates paid by travel suppliers on
published rates and fares;
o the announcement or introduction of lower prices or new travel
services and products by our competitors;
o any deterioration in general economic conditions, such as a
global recession, or economic conditions specific to the
Internet or travel industry;
o seasonal fluctuations in consumer travel spending patterns;
o slower growth in the level of use of online services and
consumer acceptance of the Internet for the purchase of
consumer products and services such as those we offer;
o any inability to upgrade and develop our systems and
infrastructure;
o any inability to retain or to attract qualified personnel in a
timely and effective manner;
o technical difficulties, system downtime or slowdowns in
Internet response times;
o increases in operating expenses or capital expenditures
relating to expansion of our business, operations and
infrastructure that are not accompanied by increased revenue;
6
<PAGE>
o difficulties in assimilating the operations and personnel of
any acquired business;
o adverse government regulation; and
o events affecting the travel industry such as natural
disasters, wars or terrorist attacks.
For any of the foregoing reasons, or for other reasons we do not
presently anticipate, in a future quarter it is possible that our operating
results will not meet market expectations, including the expectations of
financial analysts. If this occurs, it would have a material adverse effect on
our stock price.
WE RELY ON FULFILLMENT PARTNERS IN EACH OF THE COUNTRIES IN WHICH WE OPERATE.
ANY LOSS OF FULFILLMENT PARTNERS OR INABILITY TO ESTABLISH FULFILLMENT PARTNERS
COULD HARM OUR BUSINESS.
We require travel fulfillment partners in all the countries in which we
operate to provide ticketing on services as well as access to preferable rates.
Any inability to attract fulfillment partners with access to competitive fares,
or any loss of any of our existing fulfillment partners, or any failure of any
of our fulfillment partners to provide quality customer service could have a
material adverse effect on our operations and stock price.
CHANGES TO OR CANCELLATIONS OF OUR ARRANGEMENTS WITH HOTELS COULD ADVERSELY
AFFECT OUR OPERATING RESULTS.
We rely on our relationship with our independent hotels to provide us
with hotel room capacity to sell. We do not have any non-cancelable, long-term
contracts with any of these hotels. If we are unable to maintain satisfactory
relationships with our independent hotels, establish relationships with new
independent hotels or if our independent hotels establish similar or more
favorable relationships with our competitors, our operations, results of
operations and financial conditions could be adversely affected.
WE EXPECT INCREASED OPERATING EXPENSES IN CONNECTION WITH NEW AND EXPANDED
SERVICES. IF THESE SERVICES ARE UNSUCCESSFUL OR REVENUE INCREASES ARE
SIGNIFICANTLY BELOW EXPENSES, THE VALUE OF YOUR INVESTMENT COULD BE NEGATIVELY
AFFECTED.
We currently intend to:
o develop and offer new and expanded travel services;
o further develop our technology and transaction-processing
systems; and
o expand our offerings of international travel services.
Of the approximately $25 million we expect to invest to grow our online
business during the next 12 months, we expect to invest approximately $6 million
to develop these new and expanded services. We expect that these investments
will contribute to net losses for the foreseeable future. To the extent the
expenses we incur to fund these activities are not followed by increased
revenue, we may be unable to achieve or maintain profitability. In addition, we
may incur expenses when we enter new markets or offer new services that
significantly exceed the amounts we anticipate. If so, our management, financial
and operational resources may be severely strained. Our inability to generate
revenue from such expanded services or products sufficient to offset our
expenses could be damaging to our business.
7
<PAGE>
DECLINES IN CONSUMER TRAVEL SPENDING COULD HARM OUR OPERATING RESULTS.
The majority of our online revenue is derived from consumer spending in
the travel industry. The travel industry, especially leisure travel, depends on
personal discretionary spending levels and suffers during economic downturns and
recessions. The travel industry is also highly susceptible to unforeseen events,
such as political instability, regional hostilities, terrorism, fuel price
escalation, travel-related accidents, natural disasters, unusual weather
patterns or travel industry related labor strikes. Any event that results in
decreased consumer travel spending would likely have a negative effect on our
operating results.
WE MAY NEED MORE FUNDING TO SUPPORT OUR ONLINE OPERATIONS, WHICH MAY NOT BE
AVAILABLE TO US ON FAVORABLE TERMS OR AT ALL.
We require substantial working capital to fund our online business. We
currently anticipate that our existing funds and ability to borrow will be
sufficient to meet our capital requirements for the foreseeable future. We may,
however, be required to raise additional funds if our needs or circumstances
change. Additional financing may not be available in sufficient amounts or on
favorable terms. If we raise additional funds by issuing equity or convertible
debt securities, the percentage ownership of our shareholders may be diluted, or
our ownership of our online travel services subsidiary, LPI Limited, may be
diluted. In addition, any new securities could have rights, preferences and
privileges senior to those of our common stock. If we are unable to raise
additional financing when necessary, our operations and financial condition will
be materially adversely affected.
WE COULD FACE LITIGATION BECAUSE OF OUR WEB PAGE CONTENT, WHICH MIGHT REQUIRE
CONSIDERABLE EFFORT AND EXPENSE TO DEFEND AND WHICH MIGHT RESULT IN SIGNIFICANT
LIABILITY.
As a publisher and distributor of online content, we face potential
liability for defamation, negligence, copyright, patent or trademark
infringement and other claims based on the nature and content of the materials
that we publish or distribute. Such claims have been brought, and sometimes
successfully pressed, against other online services. In addition, we do not and
cannot practically screen all of the content generated by other web sites that
are linked to our web sites, and we could be exposed to liability with respect
to such content. Although we carry general liability insurance, our insurance
may not cover claims of these types or may not be adequate to indemnify us for
all liability that may be imposed. Any imposition of liability, particularly
liability that is not covered by insurance or is in excess of insurance
coverage, could have a damaging effect on our reputation, operating, results,
financial condition and stock price.
WE MAY NOT BE ABLE TO KEEP UP WITH RAPID TECHNOLOGICAL CHANGE.
The market for our services is characterized by rapidly changing
technology, evolving industry standards, emerging competition and frequent
product introductions. There can be no assurance that we can successfully
identify new product and service opportunities as they arise and develop and
bring new products and services to market in a timely manner or that products,
services or technologies developed by others will not render our services or
technologies noncompetitive, obsolete or less marketable.
8
<PAGE>
WE COULD LOSE MARKET SHARE IF WE DO NOT KEEP UP WITH THE SIGNIFICANT COMPETITION
IN THE TRAVEL SERVICES MARKET.
The online travel services market is new, rapidly evolving, intensely
competitive and has relatively low barriers to entry. We compete primarily with
online travel reservation services such as Travelscape.com, Preview Travel,
Expedia Travel and Travelocity, as well as online travel wholesalers such as
Cheap Tickets, Hotel Reservation Network, Lowestfare.com and Priceline.com. In
addition, and to a lesser extent, we compete with traditional travel agencies,
such as American Express Travel Service, Carlson Wagonlit Travel and Uniglobe
Travel, individual airlines and hotels selling directly to consumers and
consolidators and wholesalers of airline tickets and other travel products such
as Global Vacation Group and 800 Travel Systems.
Some of our current and potential competitors have competitive
advantages due to various factors, which include, among others:
o greater brand recognition and web site traffic;
o longer operating histories;
o larger customer bases;
o greater financial, marketing and other resources; and
o ability to obtain travel inventory at greater discounts and on
more favorable terms than we can.
In addition, we may face competitive pressure due to the expansion of
current and the creation of new technologies. Announcements of technological
innovations, new services, business relationships or acquisitions by our
competitors could cause our stock price to decline. Increased competition could
reduce our operating margins and profitability, result in loss of market share
and diminish our brand recognition, which would materially and adversely affect
our business, results of operations and financial condition.
WE MAY NOT ACQUIRE OR MAINTAIN OUR DOMAIN NAME IN ALL OF THE COUNTRIES IN WHICH
WE DO BUSINESS, AND WE MAY BE REQUIRED TO EXPEND SIGNIFICANT FUNDS TO PREVENT
INFRINGEMENT OF OUR DOMAIN NAME, WHICH COULD INHIBIT OUR ABILITY TO EXPAND OUR
BUSINESS INTERNATIONALLY.
We currently hold the Internet domain name www.leisureplanet.com as
well as various other related names. Third parties may acquire domain names that
are similar to, infringe or otherwise decrease the value of our domain names,
trademarks and other proprietary rights, which may hurt our business. We may be
required to expend significant funds in the legal defense of our domain names.
Domain names generally are regulated by Internet regulatory bodies. The
regulation of domain names is subject to change. Regulatory bodies could
establish additional top-level domains, appoint additional domain name
registrars or modify the requirements for holding domain names. The relationship
between regulations governing domain names and laws protecting trademarks and
similar proprietary rights is unclear. As a result, we may not acquire or
maintain the "leisureplanet" domain name in all of the countries in which we
conduct business in the future.
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WE MAY NOT BE ABLE TO SUCCESSFULLY PROTECT OUR PROPRIETARY RIGHTS.
Our success and ability to compete is dependent in part on the
protection of our content for the Internet and the goodwill associated with our
trademarks, trade names and trade secrets. A substantial amount of uncertainty
exists concerning the application of copyright laws to the Internet, and there
can be no assurance that existing laws will provide adequate protection for our
original content. In addition, because copyright laws do not prohibit
independent development of similar content, there can be no assurance that
copyright laws will provide us with any competitive advantage.
We rely on trade secret and copyright laws to protect our proprietary
technologies, primarily the software that we have developed to manage and
improve our web sites. There can be no assurance that these laws will provide
sufficient protection to us, that others will not develop technologies that are
similar or superior to ours, or that third parties will not copy or otherwise
obtain and use our technologies without authorization.
Policing unauthorized use of our proprietary technology and other
intellectual property rights could entail significant expense and could be
difficult or impossible, particularly given the global nature of the Internet
and the fact that the laws of other countries may afford us little or no
effective protection of our intellectual property.
In addition, we rely on certain technology licensed from third parties,
and may be required to license additional technology in the future, for use in
managing our web sites and providing related services to our customers and other
users of our web sites. There can be no assurance that these third party
technology licenses will be available or will continue to be available to us on
acceptable commercial terms or at all. If we are unable to enter into and
maintain any of these technology licenses, it could damage our business.
WE DEPEND ON INTERNALLY AND EXTERNALLY DEVELOPED TECHNOLOGY SYSTEMS AND INTERNET
CAPACITY TO HANDLE ALL TRAFFIC TO OUR WEB SITES, AND WE COULD BE SUBJECT TO
INTERNET CAPACITY CONSTRAINTS. IF OUR SYSTEMS FAIL OR DO NOT PERFORM OPTIMALLY,
OUR OPERATIONS AND REVENUE MAY BE NEGATIVELY AFFECTED.
Our revenue depends on the number of customers who use our web sites to
book their travel reservations. Accordingly, the satisfactory performance,
reliability and availability of our web sites, transaction processing systems
and network infrastructure are critical to our operating results, as well as our
ability to attract and retain customers and maintain adequate customer service
levels. Any system interruptions that result in the loss of data, the
unavailability of our web sites or reduced performance of the reservation system
would reduce the volume of reservations and the attractiveness of our service
offerings, which could have a negative effect on our operating results and stock
price.
We use an internally developed system that supports our web sites and
substantially all aspects of transaction processing. We have experienced
periodic system interruptions and delays, which we believe will continue to
occur from time to time. Any substantial increase in the volume of traffic on
our web sites or the number of reservations made by customers will require us to
expand and upgrade our technology, transaction-processing systems and network
infrastructure. We do not know whether we will be able to accurately project the
rate or timing of any such increases, or expand and upgrade our systems and
infrastructure to accommodate such increases in a timely manner.
Our systems and operations are vulnerable to damage or interruption
from human error, fire, flood, power loss, telecommunications failure,
break-ins, sabotage, intentional acts of vandalism, natural disasters and
similar events. We currently do not have redundant systems or a disaster
recovery plan and
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do not carry sufficient business interruption insurance to compensate us for
losses that may occur. Despite our implementation of network security measures,
our servers are vulnerable to computer viruses, physical or electronic break-ins
and similar disruptions, which could lead to interruptions, delays, loss of data
or the inability to accept and confirm customer reservations.
IF PROVIDERS OF THE THIRD-PARTY SYSTEMS ON WHICH WE RELY DECIDE TO NO LONGER
OFFER OR MAINTAIN OUR SERVICES, THE VALUE OF YOUR INVESTMENT MIGHT DECREASE.
We rely on many third-party computer systems or third-party service
providers, including the Worldspan computerized central reservation systems of
the airline and hotel industries to satisfy demand for airline tickets and hotel
room reservations. Any interruption in these third-party services, or a
deterioration in their performance, could be disruptive to our business. In the
past, these third-party providers have experienced interruptions or failures in
their systems or services that have temporarily prevented our customers from
accessing, or purchasing certain travel services through our web sites. Any
reduction in performance, disruption in Internet or web site access or
discontinuation of services provided by any other Internet service provider, or
any disruption in our ability to access the Worldspan global distribution system
or any other travel reservation systems, could have a negative effect on our
operating results and financial condition.
OUR OPERATIONS ARE SUSCEPTIBLE TO SECURITY RISKS.
Experienced programmers may attempt on occasion to penetrate the
security on our web sites. We expect that an attempt may occur from time to
time. Because a hacker who is able to penetrate the security on our web sites
could misappropriate proprietary information or cause interruptions in our
products and services, we may be required to expend significant capital and
resources to protect against or to alleviate problems caused by such parties.
Additionally, we may not have a timely remedy against a hacker who is able to
penetrate the security on our web sites. Such purposeful security breaches could
have a material adverse effect on our business, results of operations and
financial condition. In addition to purposeful security breaches, the
inadvertent transmission of computer viruses could expose us to a material risk
of loss or litigation and possible liability.
We are seeking to develop or license encryption and authentication
technology and software to provide the security and authentication necessary to
effect secure transmission of confidential information, such as customer credit
card numbers and to prevent unauthorized users to enter our site, obtain and
copy proprietary material. We are also seeking to develop or license encryption
and authentication technology to prevent authorized users from copying our
proprietary content and disseminating it to others. Advances in computer
capabilities, discoveries in the field of cryptography and other discoveries,
events, or developments could lead to a compromise or breach of the algorithms
in any encryption and authentication technology that we develop or license to
protect our confidential information and proprietary content. If such a
compromise or breach of any encryption authentication technology that we develop
or license occurs, it could have a material adverse effect on our business,
results of operations and financial condition. We may be required to expend
significant capital and resources and engage the services of third parties to
protect against the threat of such security, encryption and authentication
technology breaches or to alleviate problems caused by such breaches. Concerns
over the security of Internet transactions and the privacy of users may also
inhibit the growth of the Internet generally, particularly as a means of
conducting commercial transactions.
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WE ARE SUBJECT TO GOVERNMENT REGULATIONS AND LEGAL UNCERTAINTIES.
We are subject to various laws and regulations relating to our
business. Few laws or regulations are currently directly applicable to access to
the Internet. However, because of the Internet's popularity and increasing use,
new laws and regulations may be adopted. Such laws and regulations may cover
issues such as:
o user privacy;
o pricing;
o content;
o copyrights;
o distribution; and
o characteristics and quality of products and services.
In addition, the growth of the Internet and electronic commerce,
coupled with publicity regarding Internet fraud, may lead to the enactment of
more stringent consumer protection laws. These laws may impose additional
burdens on our business. The enactment of any additional laws or regulations may
impede the growth of the Internet, which could decrease our potential revenues
form electronic commerce or otherwise adversely affect our business, financial
condition and operating results.
Laws and regulations directly applicable to electronic commerce or
Internet communications are becoming more prevalent. The most recent session of
Congress enacted Internet laws regarding on-line copyright infringement.
Although not yet enacted, Congress is considering laws regarding Internet
taxation. The European Union recently enacted new privacy regulations. These are
all recent enactments, and there is uncertainty regarding their marketplace
impact. In addition, various jurisdictions already have enacted laws that are
not specifically directed to electronic commerce but that could affect our
business. The applicability of many of these laws to the Internet is uncertain
and could expose us to substantial liability.
Any new legislation or regulation regarding the Internet, or the
application of existing laws and regulations to the Internet, could materially
adversely affect us. If we were alleged to violate federal, state or foreign,
civil or criminal law, even if we could successfully defend such claims, it
could materially adversely affect us.
Several telecommunications carriers are seeking to have
telecommunications over the Internet regulated by the Federal Communications
Commission in the same manner as other telecommunications services.
Additionally, local telephone carriers have petitioned the Federal
Communications Commission to regulate Internet service providers and online
service providers in a manner similar to long distance telephone carriers and to
impose access fees on such providers. If either of these petitions are granted,
the costs of communicating on the Internet could increase substantially. This,
in turn, could slow the growth of use of the Internet. Any such legislation or
regulation could materially adversely affect our business, financial condition
and operating results.
RISKS RELATING TO OUR OPERATIONS IN SOUTH AFRICA
Many of our operations are conducted through subsidiaries located in
South Africa. For the foreseeable future, we expect to continue to focus many of
our efforts in South Africa. Conducting business in South Africa exposes us to
certain risks, including:
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o political risks;
o risks related to currency exchange;
o economic risks; and
o governmental regulatory considerations.
WE ARE SUBJECT TO POLITICAL RISKS IN SOUTH AFRICA.
The social structure of South Africa was, prior to 1994, governed
according to the apartheid system. Racial tensions in South Africa have from
time to time resulted in social unrest, strikes, riots and other sporadic
localized violence. The apartheid system also resulted in international
financial and trade sanctions against South Africa. Although a new interim
constitution was adopted and two successful and peaceful national elections have
been held in April 1994 and June 1999, we cannot assure you that social unrest,
which could range from civil disobedience to civil war, will not occur. Our
businesses in South Africa have experienced politically-related work stoppages
in the past. Since 1994, however, no disturbance has had a material adverse
effect on our business. We cannot assure you of the economic and tax policies
which the South African government may pursue. Other developments which could
adversely effect the economy of South Africa include:
o nationalization;
o expropriation;
o confiscatory taxation;
o currency blockage;
o political changes;
o government regulation;
o strikes;
o political or social instability; or
o diplomatic developments.
WE ARE SUBJECT TO RISKS RELATED TO CURRENCY EXCHANGE IN SOUTH AFRICA.
Currently the vast majority of our revenues are derived from our
subsidiaries which do business in South African Rand and most of our revenues
are generally received in this currency. Historically, the rate of inflation in
South Africa has averaged 10-15% per annum, although this has fallen in recent
years. There have also been significant fluctuations in the exchange rate of the
South African Rand. South Africa's level of inflation may increase our risk
related to currency fluctuation. The U.S. Dollar equivalent of our South African
based net assets and results of operations will be adversely affected by
reductions in the value of the Rand relative to the U.S. Dollar.
WE ARE SUBJECT TO ECONOMIC RISKS IN SOUTH AFRICA.
The economy of South Africa may differ unfavorably from the U.S.
economy in the following respects:
o growth of gross domestic product or gross national product;
o rate of inflation;
o taxation;
o capital reinvestment;
o resource self-sufficiency; and
o balance of payments position.
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South Africa may be particularly susceptible to changes in the world
price of gold and other primary commodities as these represent a majority of
South Africa's exports. Any unfavorable aspects of the South African economy may
materially adversely affect our financial condition.
WE ARE SUBJECT TO GOVERNMENT REGULATORY CONSIDERATIONS IN SOUTH AFRICA.
Generally, the Exchange Control Department of the South African Reserve
Bank regulates:
o our making of loans to our subsidiaries;
o the ability of those subsidiaries to borrow from South
African sources; and
o the repatriation of dividends, interest and royalties
by those subsidiaries.
In addition, under current South African Exchange Control Regulation,
we may be required to obtain the permission of the South African Treasury prior
to loaning money to, providing guarantees on behalf of, or providing "financial
assistance" to First South African Holdings (Pty.) Ltd., our wholly owned
subsidiary. A South African company such as First South African Holdings (Pty.)
Ltd., may be permitted a certain level of local borrowing without reference to
the exchange control authorities and without prior consent. In addition, the
terms of repayment of any such loan and the interest rate, which is generally
market-related, will be regulated.
Certain other regulations impact the remittance of dividends and
interest from South Africa, including any potential dividends to us from a South
African subsidiary. In practice, the South African Reserve Bank does not
restrict the remittance of genuine dividends from income earned by South African
companies although approval must be obtained. As a result, there can be no
assurance that a South African subsidiary would be permitted to declare and pay
a dividend to us.
POSSIBLE ACQUISITIONS OF SOUTH AFRICAN COMPANIES
South African companies that may be acquired by us are subject to South
African GAAP which, in certain instances, may differ from U.S. GAAP. Although we
intend to prepare financial statements in accordance with U.S. GAAP, we can
provide no assurance that we will be able to do so. Although we are unaware of
any South African GAAP requirement that would adversely affect us, there can be
no assurance that our financial condition or our ability to consummate future
acquisitions will not be adversely affected by differences between South African
GAAP and U.S. GAAP.
POSSIBLE FLUCTUATION IN OPERATING RESULTS
There can be no assurance that our South African operating subsidiaries
will continue to operate profitably, or that prior trends will be indicative of
future results of operations. Future results of operations may fluctuate
significantly based upon factors such as increases in competition, losses
incurred by new businesses that may be acquired in the future, currency
fluctuations, political changes, macroeconomic factors, the continued
availability of new materials and other circumstances that may not be reasonably
foreseeable at this time.
COMPETITION
We compete with a number of companies, from South Africa and from other
countries, offering similar products and services, some of whom may have
substantially greater financial, management, technical and other resources than
us. As a result of South Africa's recent political transformation, some South
African businesses may be adversely affected by increased competition from
foreign firms doing
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business in South Africa. In addition, South Africa has historically imposed
significant tariffs against a number of industrial products. To the extent
tariffs are reduced or removed to comply with international treaty requirements
or otherwise, we would face much greater pressure from globally competitive
firms. We cannot assure you that we will compete effectively with other
companies or that other companies will not develop products which are superior
to ours or which achieve greater market penetration. In addition, we may
experience competition from other companies seeking to identify and consummate
acquisitions of South African companies. Such competition may result in the loss
of an acquisition candidate or an increase in the price we would be required to
pay for any such acquisition.
LABOR RELATIONS
A significant number of South Africa's workers belong to either
registered or unregistered trade unions, and most of the major industries are
unionized. A number of the trade unions have close links to various political
parties. In the past, trade unions have had a significant influence in South
Africa as vehicles for social and political reform as well as the collective
bargaining process. It is uncertain whether labor disruptions will be used to
advocate political causes in the future. Significant labor disruptions could
have a material adverse effect on our financial condition.
South Africa has also recently enacted a new Labor Relations Act. This
Act entrenches the rights of employees to belong to trade unions and the rights
of representative trade unions to have access to the workplace. The right to
strike is guaranteed, as is the right to participate in strikes, in certain
circumstances. The right to picket has also been entrenched. This Act recognizes
the rights of employers to belong to employers' associations. Importantly, the
Act envisages an increased role for employees in the decision making of
companies by providing, where a majority trade union so requests, for the
establishment of workplace forums to represent the interests of employees where
a company employs more than 100 employees. The range of issues on which the
workplace forum must be consulted include:
o restructuring of the workplace;
o partial or total plant closures;
o mergers and transfers of ownership insofar as these
affect employees; and
o retrenchments.
The implementation of the Labor Relations Act's provisions may have a
material adverse effect on our cost of labor and consequently on our financial
condition. New legislation is currently being proposed regarding minimum
conditions of labor. If enacted, this legislation is expected to increase South
African labor costs.
GENERAL RISKS RELATED TO THE COMPANY
DEPENDENCE ON KEY PERSONNEL
Our success depends upon the continued contributions of our executive
officers, some of whom are also our principal shareholders, and the continued
contributions of the management of our subsidiaries. Our business could be
adversely affected by the loss of services of, or a material reduction in the
amount of time devoted to us by our executive officers or the executive officers
of our subsidiaries.
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CONTROL BY INSIDERS; OWNERSHIP OF SHARES HAVING DISPROPORTIONATE VOTING RIGHTS;
POSSIBLE DEPRESSIVE EFFECT ON THE PRICE OF OUR SECURITIES
Our founders and certain other shareholders own 796,589 shares of our
Class B common stock, representing approximately 13.51% of our outstanding
capital stock and approximately 43.85% of the total voting power (assuming no
conversion of the outstanding debentures and the increasing rate debentures and
no exercise of the other outstanding warrants and options) and are able to elect
all of the our directors and otherwise control our operations. Furthermore, the
disproportionate vote afforded the Class B common stock could also serve to
impede or prevent a change of control. As a result, potential acquirees may be
discouraged from seeking to acquire control through the purchase of our common
stock, which could have a depressive effect on the price of our securities and
will make it less likely that shareholders receive a premium for their shares as
a result of any such attempt.
DIVIDENDS UNLIKELY
We have not paid any cash dividends and do not anticipate paying any
such cash dividends in the foreseeable future. Earnings, if any, will be
retained to finance future growth.
SHARES ELIGIBLE FOR FUTURE SALES; POSSIBLE DEPRESSIVE EFFECT OF FUTURE SALES
OF COMMON STOCK; REGISTRATION RIGHTS
Future sales of common stock by existing shareholders pursuant to Rule
144 under the Securities Act of 1933, as amended, or otherwise, including with
respect to our outstanding redeemable Class A warrants and redeemable Class B
warrants, or the possibility of such sales in the public market, could have a
material adverse effect on the market price of our common stock. Rule 144
generally provides that a person holding restricted securities for a period of
one year may sell every three months in brokerage transactions and/or
market-maker transactions an amount not to exceed the greater of one percent of
our issued and outstanding common stock, or the average weekly trading volume of
our common stock during the four calendar weeks prior to such sale. Rule 144
also permits, under certain circumstances, the sale of shares without any
quantity limitation by a person who is not an affiliate of us and who has
satisfied a two-year holding period.
POTENTIAL ANTI-TAKEOVER EFFECTS OF PREFERRED STOCK
Our Memorandum of Association authorizes the issuance of 5,000,000
shares of preferred stock with such designations, rights and preferences as may
be determined from time to time by the board of directors. Accordingly, the
board of directors is empowered, without shareholder approval, but subject to
applicable government regulatory restrictions, to issue preferred stock with
dividend, liquidation, conversion, voting or other rights which could adversely
affect the voting power or other rights of the holders of our common stock. In
the event of issuance, the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of us. Although we have no present intention to issue any shares of our
preferred stock, we cannot assure we will do so in the future.
LIMITED RIGHTS OF SHAREHOLDERS UNDER BERMUDA LAW AND BYE-LAWS
Our corporate affairs are governed by our Memorandum of Association and
bye-laws, as well as the common law of Bermuda relating to companies and the
Companies Act 1981. Our bye-laws limit the right of security holders to bring an
action against our officers and directors. The laws of Bermuda relating to
shareholder rights, protection of minorities, fiduciary duties of directors and
officers, matters
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of corporate governance, corporate restructuring, mergers and similar
arrangements, takeovers, shareholder suits, indemnification of directors and
inspection of corporate records, may differ from those that would apply if we
were incorporated in a jurisdiction within the United States. The rights of
shareholders in a Bermuda company may not be as extensive as the rights of a
shareholder of a United States company and, accordingly, the holders of our
shares of common stock may be more limited in their ability to protect their
interests in us. In addition, there is uncertainty whether the courts of Bermuda
would enforce judgments of the courts of the United States and of other foreign
jurisdictions. There is also uncertainty whether the courts of Bermuda would
enforce actions brought in Bermuda which are predicated upon the securities laws
of the United States.
YEAR 2000 RISKS MAY HARM OUR BUSINESS
Although we have developed internal proprietary software that is Year
2000 compliant, can operate on a stand-alone basis and does not rely on
technology supplied by third parties, there can be no assurance that discovered
Year 2000 problems will not occur in the hardware, software or equipment of our
customers that will require substantial revision.
In addition, there can be no assurance that governmental agencies,
utility companies, third-party service providers and others outside of our
control will be Year 2000 compliant. The failure by these entities to be Year
2000 compliant could result in a systemic failure beyond our control such as a
transportation systems, telecommunications or electrical failure. Any of these
failures could also prevent us from delivering our system to our customers,
which would have a material adverse effect on our business, results of
operations and financial condition.
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USE OF PROCEEDS
The selling shareholders are selling all of the shares covered by this
Prospectus for their own account. Accordingly, we will not receive any proceeds
from the sale of the shares. We may receive proceeds from the exercise of the
various warrants and unit purchase options. We will use the net proceeds for
general corporate purposes. We have agreed to bear the expenses relating to the
registration of the shares, other than brokerage commissions and expenses, if
any, and fees and expenses of counsel or other advisers, if any, to the selling
shareholders, all of which will be paid by the selling shareholders.
DIVIDEND POLICY
We have never declared or paid cash dividends on our common stock. We
currently anticipate that we will retain all available funds for use in the
operation of our business. As such, we do not anticipate paying any cash
dividends on our common stock in the foreseeable future.
SELLING SHAREHOLDERS
This Prospectus covers 3,166,547 shares of our common stock. We issued
1,379,310 of the shares of common stock covered by this Prospectus to UBS AG
under the terms of a Purchase Agreement dated December 22, 1999 between UBS AG,
UBS Capital (Jersey) Ltd. and us. Another 135,000 shares of our common stock are
issuable upon exercise of a warrant which we issued to Value Investing Partners,
Inc. as a placement fee in connection with a private placement of debentures in
1997. An aggregate of another 800,000 shares of our common stock are issuable
upon exercise of certain unit purchase options and class A and class B warrants
underlying such unit purchase options. The unit purchase options were issued to
the DH Blair Investment Banking Corp. for services as the underwriter of our
initial public offering in January 1996. DH Blair has assigned some of these
unit purchase options to various persons. Another 720,000 shares of our common
stock are issuable upon exercise of another warrant issued to InfoSpace.com,
Inc. in June 1999 as compensation for acting as one of our co-branding partners.
The remaining 132,237 shares of our common stock may be offered by
American Stock Transfer & Trust Company, as escrow agent, pursuant to two
separate escrow agreements between us, the escrow agent and certain former
shareholders of two of our lifestyle products companies, Gull Foods and Fifers
Bakery. These shareholders are residents of South Africa and are prohibited by
South African law from holding shares in a foreign company. Therefore, they own
shares in our South African subsidiary, First South African Holding (Pty.) Ltd.
In the event they tender their shares in our First South African subsidiary to
the escrow agent, the escrow agent will sell a like number of shares of our
common stock and deliver the proceeds of such sale to the tendering shareholder.
The shares of our South African subsidiary will be issued as follows:
Shares
------
The Allen Vivian James Family Trust 54,279
The Ian Stuart Store Family Trust 42,217
The Marlys Francis Store Family Trust 12,062
The Douglas John Varkevisser Family Trust 12,062
Charles Edwin Brown Hind 11,617
------
Total 132,237
=======
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The following table lists certain information regarding the selling
shareholders' ownership of shares of our common stock as of January 28, 2000,
and as adjusted to reflect the sale of the shares. Information concerning the
selling shareholders may change from time to time.
<TABLE>
<CAPTION>
Shares of Common Stock Owned
after Offering (1)
-----------------------------------
Shares of
Common Stock Shares
Owned Prior to Registered
Offering Hereby Number Percent
---------------- ----------------- ---------------- -----------------
<S> <C> <C> <C> <C>
UBS AG 1,379,310 1,379,310 0 0.00%
Value Investing Partners, Inc. 135,000(2) 135,000 0 0.00%
DH Blair Investment Banking Corp. 800,000(3) 800,000 0 0.00%
and assignees
InfoSpace.com, Inc. 720,000(2) 720,000 0 0.00%
American Stock Tranfer & Trust 0 132,237 0 0.00%
Company --------- --------- --------- ---------
Total 3,034,310 3,166,547 0 0.00%
========= ========= ===== =====
</TABLE>
- -----------------
(1) Assumes that all of the shares of common stock offered hereby are sold.
(2) Represents shares issuable upon exercise of a warrant.
(3) Represent shares issuable upon exercise of a unit purchase option and
shares issuable upon exercise of securities underlying such unit
purchase option.
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DESCRIPTION OF SECURITIES
GENERAL
Our authorized capital stock consists of an aggregate of 23,000,000
shares of common stock, par value $.01 per share, 2,000,000 shares of Class B
common stock, par value $.01 per share, and 5,000,000 shares of Preferred Stock,
par value $.01 per share. As of the date hereof, 946,589 shares of our Class B
common stock are outstanding. The following statements describe the material
provisions of the securities being registered hereby and certain other of our
securities. See "Anti-Takeover Protections" and "Differences in Corporate Law"
for a description of the Company's Memorandum of Association, bye-laws and The
Companies Act 1981 of Bermuda, regarding anti-takeover provisions and related
matters affecting us. Such statements and disclosure do not purport to be
complete and are qualified in their entirety by reference to the full Memorandum
of Association and bye-laws which are exhibits to the Company's Registration
Statement of which this Prospectus is a part.
COMMON STOCK
Holders of our common stock have one vote per share on each matter
submitted to a vote of the shareholders and a ratable right to our net assets
upon liquidation. Holders of our common stock do not have preemptive rights to
purchase additional shares of our common stock or other subscription rights. Our
common stock carries no conversion rights and is not subject to redemption or to
any sinking fund provisions. All shares of our common stock are entitled to
share equally in dividends from legally available sources as determined by the
Board of Directors, subject to any preferential dividend rights of our preferred
stock. Upon our dissolution or liquidation, whether voluntary or involuntary,
holders of our common stock are entitled to receive our assets available for
distribution to the shareholders, subject to the preferential rights of our
preferred stock. All of the shares of our common stock offered hereby are
validly authorized and issued, fully paid and non-assessable.
CLASS B COMMON STOCK
Our Class B common stock and our common stock are substantially
identical on a share-for-share basis, except that the holders of our Class B
common stock have five votes per share on each matter considered by
shareholders, and the holders of our common stock have one vote per share on
each matter considered by shareholders, and except that the holders of each
class will vote as a separate class with respect to any matter requiring class
voting by The Companies Act 1981 of Bermuda.
Each share of our Class B common stock is automatically converted into
one share of common stock upon:
o the death of the original holder, or, if such shares are subject
to a shareholders agreement or voting trust granting the power to
vote such shares to another original holder of our Class B common
stock, then upon the death of such other original holder; or
o the sale or transfer to any person other than the following
transferees:
o the spouse of a holder of Class B common stock;
o any lineal descendants of a holder of Class B common stock,
including adopted children;
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o a trust for the sole benefit of a Class B common
shareholder's lineal descendants, including adopted
children;
o a partnership made up exclusively of Class B common
shareholders and their lineal descendants, including adopted
children or a corporation wholly-owned by a holder of Class
B common stock and their lineal descendants; and
o any other holder of Class B common stock.
The difference in voting rights increases the voting power of the
holders of Class B common stock and accordingly has an anti-takeover effect. The
existence of our Class B common stock may make us a less attractive target for a
hostile takeover bid or render more difficult or discourage a merger proposal,
an unfriendly tender offer, a proxy contest, or the removal of incumbent
management, even if such transactions were favored by our shareholders other
than the holders of Class B common stock. Thus, the shareholders may be deprived
of an opportunity to sell their shares at a premium over prevailing market
prices in the event of a hostile takeover bid. Those seeking to acquire us
through a business combination will be compelled to consult first with the
holders of Class B common stock in order to negotiate the terms of such business
combination. Any such proposed business combination will have to be approved by
the Board of Directors, which may be under the control of the holders of Class B
common stock, and if shareholder approval were required, the approval of the
holders of Class B common stock will be necessary before any such business
combination can be consummated.
PREFERRED STOCK
We are authorized to issue up to 5,000,000 shares of preferred stock.
The Board of Directors has the authority to issue this preferred stock in one or
more series and to fix the number of shares and the relative rights, conversion
rights, voting rights and terms of redemption, including sinking fund
provisions, and liquidation preferences, without further vote or action by the
shareholders. Issuing shares of preferred stock with voting rights could affect
the voting rights of the holders of our common stock by increasing the number of
outstanding shares having voting rights, and by the creation of another class or
series with voting rights. If the Board of Directors authorizes the issuance of
shares of preferred stock with conversion rights, the number of shares of common
stock outstanding could potentially be increased. Issuance of preferred stock
could, under certain circumstances, have the effect of delaying or preventing a
change in control and may adversely affect the rights of holders of common
stock. Also, preferred stock could have preferences over the common stock and
other series of preferred stock with respect to dividend and liquidation rights.
We currently have no plans to issue any preferred stock.
ANTI-TAKEOVER PROTECTIONS
The voting provisions of our common stock and Class B common stock and
the broad discretion conferred upon our Board of Directors with respect to the
issuance of series of preferred stock, including with respect to voting rights,
could substantially impede the ability of one or more shareholders acquiring
sufficient influence over the election of directors and other matters to effect
a change in control or management, and our Board of Directors' ability to issue
preferred stock could also be utilized to change our economic and control
structure. Those provisions, together with certain other provisions of our
bye-laws summarized in the succeeding paragraph, may be deemed to have an
anti-takeover effect and may delay, defer or prevent a tender offer or takeover
attempt that a shareholder might consider in his, her
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or its best interest, including attempts that might result in a premium over the
market price for our common stock.
Our bye-laws establish an advance notice procedure for the nomination,
other than by or at the direction of our Board of Directors, of candidates for
election as directors at annual general meetings of shareholders. In general,
notice of intent to nominate a director at such meeting must be received by us
not less than 90 days prior to the meeting and must contain certain specified
information concerning the person to be nominated and concerning the shareholder
submitting the proposal.
DIFFERENCES IN CORPORATE LAW
The Companies Act 1981 of Bermuda differs in material respects from
laws generally applicable to United States corporations and their shareholders.
Set forth below is a summary of significant provisions of The Companies Act,
including any modifications adopted pursuant to our bye-laws, applicable to us,
which differ in general material respects from provisions of Delaware corporate
law. The following statements are summaries, and do not purport to deal with all
aspects of Bermuda law that may be relevant to us and our shareholders.
Interested Directors. Our bye-laws provide that any transaction entered
into by us in which a director has an interest is not voidable by us nor can
such director be liable to us for any profit realized pursuant to such
transaction provided the nature of the interest is disclosed at the first
opportunity at a meeting of directors, or in writing to the directors. Under
Delaware law, no such transaction would be voidable if:
o the material facts as to such interested directors' relationship or
interests are disclosed or are known to the board of directors and the board in
good faith authorizes the transaction by the affirmative vote of a majority of
the disinterested directors;
o such material facts are disclosed or are known to the shareholders
entitled to vote on such transaction and the transaction is specifically
approved in good faith by vote of the shareholders; or
o the transaction is fair as to the corporation as of the time it is
authorized, approved or ratified.
Under Delaware law, such interested director could be held liable for
any transaction for which such director derived an improper personal benefit.
Merger and Similar Arrangements. We may merge with another Bermuda
exempted company or a company incorporated outside Bermuda and carry on business
within the objects of our Memorandum of Association. See "Description of
Securities _ Certain Provisions of Bermuda Law." In the event of a merger, a
shareholder may apply to a Bermuda court for a proper valuation of such
shareholder's shares if such shareholder is not satisfied that fair value has
been paid for such shares. The court ordinarily would not disapprove a merger
absent evidence of fraud or bad faith. Under Delaware law, with certain
exceptions, any merger, consolidation or sale of all or substantially all the
assets of a corporation must be approved by the board of directors and a
majority of the outstanding shares entitled to vote. Under Delaware law, a
shareholder of a corporation participating in certain major corporate
transactions may, under varying circumstances, be entitled to appraisal rights
pursuant to which such shareholder may receive cash in the amount of the fair
market value of the shares held by such shareholder, as determined by a court or
by agreement of the corporation and the shareholder, in lieu of the
consideration such
22
<PAGE>
shareholder would otherwise receive in the transaction. Delaware law does not
provide shareholders of a corporation with voting or appraisal rights when the
corporation acquires another business through the issuance of its stock or other
consideration:
o in exchange for the assets of the business to be acquired;
o in exchange for the outstanding stock of the corporation to be
acquired; or
o in a merger of the corporation to be acquired with a
subsidiary of the acquiring corporation.
Under Bermuda law, our shareholders have the right to vote on:
o any compromise or arrangement between us and our shareholders;
o a take-over scheme for 100% of our shares enabling the
compulsory acquisition of a 10% minority interest;
o a merger; and
o our discontinuance in Bermuda.
Takeover. Bermuda law provides that where an offer is made for shares
of a company and, within four months of the offer the holders of not less than
90% of the shares which are the subject of the offer accept, the offeror may by
notice require the nontendering shareholders to transfer their shares on the
terms of the offer. Dissenting shareholders may apply to the court within one
month of the notice objecting to the transfer. The burden is on the dissenting
shareholders to show that the court should exercise its discretion to enjoin the
required transfer, which the court will be unlikely to do unless there is
evidence of fraud or bad faith or collusion as between the offeror and the
holders of the shares who have accepted the offer as a means of unfairly forcing
out minority shareholders. Delaware law provides that a parent corporation, by
resolution of its board of directors and without any shareholder vote, may merge
with any 90% or more owned subsidiary. Upon any such merger, dissenting
shareholders of the subsidiary would have appraisal rights.
Shareholder's Suit. The rights of shareholders under Bermuda law are
not as extensive as the right of shareholders under legislation or judicial
precedent in many United States jurisdictions. Class actions and derivative
actions are generally not available to shareholders under the laws of Bermuda.
However, the Bermuda courts ordinarily would be expected to follow English case
law precedent, which would permit a shareholder to commence an action in our
name to remedy a wrong done to us where the act complained of is alleged to be
beyond our corporate power or is illegal or would result in the violation of our
Memorandum of Association and bye-laws. Our bye-laws limit the right of
securityholders to bring an action against our officers and directors.
Furthermore, consideration would be given by the court to acts that are alleged
to constitute a fraud against the minority shareholders or where an act requires
the approval of a greater percentage of our shareholders than actually approved
it. The winning party in such an action generally would be able to recover a
portion of attorneys fees incurred in connection with such action. Class actions
and derivative actions generally are available to shareholders under Delaware
law for, among other things, breach of fiduciary duty, corporate waste and
actions not taken in accordance with applicable law. In such actions, the court
has discretion to permit the winning party to recover attorney fees incurred in
connection with such action.
23
<PAGE>
Indemnification of Directors. We may indemnify our directors or
officers in their capacity as such in respect of any loss arising or liability
attaching to them by virtue of any rule of law in respect of any negligence,
default, breach of duty or breach of trust of which a director or officer may be
guilty in relation to us other than in respect of his own fraud or dishonesty.
Under Delaware law, a corporation may adopt a provision eliminating or limiting
the personal liability of a director to the corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director, except for breaches
of the director's duty of loyalty, for acts or omission not in good faith or
which involve intentional misconduct or knowing violations of law, for improper
payment of dividends or for any transaction from which the director derived an
improper personal benefit. Delaware law has provisions and limitations similar
to Bermuda regarding indemnification by a corporation of its directors or
officers, except that under Delaware law the statutory rights to indemnification
may not be as limited.
Inspection of Corporate Records. Members of the general public have the
right to inspect our public documents available at the office of the Registrar
of Companies in Bermuda which will include the Memorandum of Association,
including its objects and powers, and any alteration to the Memorandum of
Association and documents relating to an increase, reduction or other alteration
of our share capital. The shareholders have the additional right to inspect our
bye-laws, minutes of general meetings and audited financial statements, which
must be presented to the annual general meeting of shareholders. Our register of
shareholders is also open to inspection by shareholders without charge, and to
members of the public for a fee. We are required to maintain our share register
in Bermuda but may establish a branch register outside Bermuda. We are required
to keep at our registered office a register of its directors and officers which
is open for inspection by members of the public without charge. Bermuda law does
not, however, provide a general right for shareholders to inspect or obtain
copies of any other corporate records. Delaware law permits any shareholder to
inspect or obtain copies of a corporation's shareholder list and its other books
and records for any purpose reasonably related to such person's interest as a
shareholder.
BERMUDA TAX CONSIDERATIONS
The following describes a summary of some of the material anticipated
tax consequences of an investment in our common stock under current Bermuda tax
laws. This discussion does not address the tax consequences under non-Bermuda
tax laws and, accordingly, each prospective investor should consult its own tax
advisors regarding the tax consequences of an investment in our common stock.
The discussion is based upon laws and relevant interpretation of current laws in
effect, all of which are subject to change.
BERMUDA TAXATION
Currently, there is no Bermuda:
o income tax;
o corporation or profits tax;
o withholding tax;
o capital gains tax;
o capital transfer tax;
o estate duty; or
o inheritance tax
24
<PAGE>
payable by us or our shareholders other than those who are ordinarily resident
in Bermuda. We are not subject to stamp or other similar duty on the issue,
transfer or redemption of our common stock.
We have obtained an assurance from the Minister of Finance of Bermuda
under the Exempted Undertakings Tax Protection Act that, if there is enacted in
Bermuda any legislation imposing tax on any capital assets, gain or appreciation
or any tax in the nature of estate duty or inheritance tax, such tax shall not
be applicable to us or any of our operations, or to our shares or our other
obligations until March 28, 2016. No reciprocal tax treaty affecting us exists
between Bermuda and the U.S.
As an exempted company, we are liable to pay in Bermuda a registration
fee based upon our authorized share capital and the premium on our issued shares
at a rate not more than $25,000 per year.
CERTAIN PROVISIONS OF BERMUDA LAW
In a September 1, 1995 letter to our Bermuda counsel, the Bermuda
Monetary Authority approved our application for "non-resident" status in Bermuda
for exchange control purposes.
The transfer of securities between persons regarded as resident outside
Bermuda for exchange control purposes and the issue of securities after the
completion of the issuance of the shares to such persons may be effected without
specific consent under the Exchange Control Act 1972 and regulations thereunder.
Issues and transfers of securities involving any person regarded as resident in
Bermuda for exchange control purposes require specific prior approval under the
Exchange Control Act 1972.
Consequently, owners of our common stock who are non-residents of
Bermuda for Bermuda exchange control purposes are not restricted in the exercise
of the rights to hold or vote their shares. Because we have been designated as a
non-resident for Bermuda exchange control purposes there are no restrictions on
our ability to transfer funds in and out of Bermuda or to pay dividends to
United States residents who are holders of our common stock, other than in
respect of local Bermuda currency.
In accordance with Bermuda law, security certificates are only issued
in the names of corporations, partnerships or individuals. In the case of an
applicant acting in a special capacity, for example as a trustee, certificates
may, at the request of the applicant, record the capacity in which the applicant
is acting. Notwithstanding the recording of any such special capacity, we are
not bound to investigate or incur any responsibility in respect of the proper
administration of any such trust.
We will take no notice of any trust applicable to any of our securities
whether or not we had notice of such trust. Specifically, we have no obligation
under Bermuda law to ensure that a trustee who is holding our shares subject to
a trust is properly carrying out the terms of such trust.
As an "exempted company", we are exempt from Bermuda laws which
restrict the percentage of share capital that may be held by non-Bermudians.
However, as an exempted company, we may not participate in certain business
transactions including:
o the acquisition or holding of land in Bermuda, except as
required for our business and held by way of lease or tenancy
for terms of not more than 50 years;
o the taking of mortgages on land in Bermuda to secure an amount
in excess of $50,000 without the consent of the Minister of
Finance of Bermuda; or
25
<PAGE>
o the carrying on of business of any kind in Bermuda other than
with persons outside Bermuda, except in furtherance of our
business carried on outside Bermuda or under a license granted
by the Minister of Finance of Bermuda.
26
<PAGE>
PLAN OF DISTRIBUTION
The selling shareholder and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling shareholders may use any one or more of the
following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the applicable
exchange;
o privately negotiated transactions;
o short sales;
o broker-dealers may agree with the selling shareholders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling shareholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended, if available, rather than under this
Prospectus.
The selling shareholders may also engage in short sales against the
box, puts and calls and other transactions in our securities or derivatives of
our securities and may sell or deliver shares in connection with these trades.
The selling shareholders may pledge their shares to their brokers under the
margin provisions of customer agreements. If the selling shareholders default on
a margin loan, the broker may, from time to time, offer and sell the pledged
shares.
Broker-dealers engaged by the selling shareholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling shareholders, or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser, in amounts to be
negotiated. The selling shareholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The selling shareholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, as amended, in connection with such
sales. In such event, any commissions received by such broker-dealers or agents
and any profit on the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act of 1933, as
amended.
We have agreed to bear the expenses relating to the registration of the
shares, other than brokerage commissions and expenses, if any, and fees and
expenses of counsel or other advisers, if any, to the selling shareholders, all
of which will be paid by the selling shareholders. We have also agreed to
indemnify the selling shareholders against certain losses, claims, damages and
liabilities, including certain liabilities under Securities Act of 1933, as
amended.
27
<PAGE>
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon by
Conyers Dill & Pearman, our Bermuda counsel.
EXPERTS
The financial statements as of June 30, 1999 and 1998, and for each of
the three years in the period ended June 30, 1999, incorporated by reference in
this Prospectus have been audited by PricewaterhouseCoopers Inc, and have been
so incorporated by reference herein in reliance upon such firm, its reports and
upon the authority of such firm as an expert in accounting and auditing.
28
<PAGE>
<TABLE>
<CAPTION>
======================================================== ===============================================
<S> <C>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION IN
CONNECTION WITH THIS OFFERING OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS OR A SUPPLEMENT TO THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY LEISUREPLANET
HOLDINGS, LTD. OR ANY OTHER PERSON. NEITHER THIS
PROSPECTUS NOR ANY SUPPLEMENT TO THIS PROSPECTUS LEISUREPLANET HOLDINGS, LTD.
CONSTITUTES AN OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
SECURITIES TO WHICH IT RELATES OR AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES
IN ANY JURISDICTIONS WHERE, OR TO ANY PERSON TO WHOM,
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS OR A
SUPPLEMENT TO THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL, UNDER ANY 3,166,547 Shares of Common Stock
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF LEISUREPLANET
HOLDINGS, LTD. SINCE THE DATE HEREOF OR THEREOF OR
THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
----------
Table of Contents Page
- ----------------- ----
Where You Can Find More Information About Us .............3
Incorporation of Certain Documents by Reference............3
Risk Factors...............................................4 ________ __, 2000
Use of Proceeds...........................................18
Dividend Policy...........................................18
Selling Shareholders......................................18
Description of Securities.................................20
Plan of Distribution......................................27
Legal Matters.............................................28
Experts...................................................28
======================================================== ===============================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
It is estimated that the following expenses will be incurred in
connection with the proposed offering hereunder. All of such expenses will be
borne by the registrant.
Registration fee - Securities and Exchange Commission........ $5,510.84
Legal fees and expenses...................................... 10,000
Accounting fees and expenses................................. 5,000
Miscellaneous................................................ 489.16
----------
Total...................................... $21,000.00
----------
Item 15. Indemnification of Directors and Officers.
Under Bermuda law and the registrant's Memorandum of Association and
bye-laws, the directors, officers, liquidators and auditors of the registrant
and their heirs, executors and administrators are indemnified and held harmless
out of the assets of the Company from and against all actions, costs, charges,
losses and expenses which they or any of them, their heirs, executors or
administrators, shall or may incur or sustain by or by reason of any act done,
concurred in or omitted in or about the execution of their duty, or supposed
duty, or in their respective offices or trusts, and none of them shall be
answerable for the acts, receipts, neglects or defaults of the others of them or
for joining in any receipts for the sake of conformity or for any loss,
misfortune or damage which may happen in the execution of their respective
offices or trusts, or in relation thereto, provided that, they are not entitled
to indemnification in respect of any willful negligence, willful default, fraud
or dishonesty which may attach to them.
Item 16. Exhibits and Financial Statement Schedules:
(a) EXHIBITS
<TABLE>
<CAPTION>
Exhibit
- -------
Number Description
- ------ -----------
<S> <C>
3.1 Memorandum of Association of the Registrant(7)
3.2 Bye-Laws of the Registrant(7)
4.1 Form of Warrant Agreement(7)
4.2 Form of Unit Purchase Option(7)
4.3 Indenture dated April 25, 1997 between the Registrant and American Stock Transfer & Trust
Company(1)
4.4 Form of Debenture(8)
4.5 Form of Placement Warrant(8)
4.6 Stock Option Agreement(8)
4.7 Indenture dated October 29, 1997, between the Registrant and American Stock Transfer & Trust
Company(3)
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
Exhibit
- -------
Number Description
- ------ -----------
<S> <C>
4.8 Loan Note dated May 27, 1999 granted by LPI Limited in favor of Twin Media (Proprietary)
Limited(9)
4.9 Purchase Agreement dated December 22, 1999 between Leisureplanet Holdings Ltd., UBS AG and UBS
Capital (Jersey) Ltd.(10)
4.10 Warrant to Purchase Common Stock of Leisureplanet Holdings, Ltd. issued to InfoSpace.com,
Inc.(10)
5.1 Opinion of Conyers Dill & Pearman(10)
10.1 Form of Escrow Agreement regarding the Earnout Escrow Shares(7)
10.2 Form of FSAH Escrow Agreement(7)
10.3 Form of Employment Agreement of Clive Kabatznik(7)
10.4 Form of FSAM Management Agreement(7)
10.5 Form of Consulting Agreement with Michael Levy(7)
10.6 1995 Stock Option Plan(7)
10.7 Pieman's Pantry Acquisition Agreement(4)
10.8 Form of Astoria Acquisition Agreement(5)
10.9 Form of Gull Foods Acquisition Agreement(6)
10.10 Form of Employment Agreement of Cornelius Roodt(2)
10.11 Agreement dated February 12, 1999 between Twine Media (Proprietary) Limited, First South Africa
Corp., Ltd. and LPI Limited(9)
10.12 Form of Employment Agreement of Pierre Kleinhans(9)
23.1 Consent of PricewaterhouseCoopers Inc(10)
23.2 Consent of Conyers Dill & Pearlman (included in Exhibit 5.1)
24.1 Power of Attorney of certain officers and directors of the Company (included on signature page)
</TABLE>
- -----------
(1) Incorporated by reference is the Registrant's Current Report on Form
8-K, Exhibit 4.1 (filed on September 10, 1997).
(2) Incorporated by reference is the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1997 (filed on September 29,
1997).
(3) Incorporated by reference is the Registrant's Current Report on Form
8-K, Exhibit 4.1 (filed on October 31, 1997).
(4) Incorporated by reference is the Registrant's Current Report on Form
8-K, Exhibit 1 (filed on June 14, 1996) as amended on Form 8-K/A (filed
on August 16, 1996) and as amended on Form 8-K/A (filed on January 22,
1998).
(5) Incorporated by reference is the Registrant's Current Report on Form
8-K, Exhibit 1 (filed on November 7, 1996) as amended on Form 8-K/A
(filed on March 14, 1997).
(6) Incorporated by reference is the Registrant's Current Report on Form
8-K, Exhibit 1 (filed on May 8, 1997) as amended on Form 8-K/A (filed
on July 3, 1997).
(7) Incorporated by reference is the Registrant's Registration Statement on
Form S-1 (No. 33-99180) (filed on November 9, 1995), as amended on Form
S-1/A No. 1, Form S-1/A No. 2 and Form S-1/A No. 3 (filed on December
27, 1995, January 16, 1996 and January 24, 1996, respectively).
(8) Incorporated by reference is the Registrant's Registration Statement on
Form S-1 (No. 333-33561) (filed on August 13, 1997), as amended on Form
S-1/A No. 1, Form S-1/A No. 2 and For S-1/A No. 3 (filed on December 9,
1997, January 22, 1998 and February 11, 1998, respectively).
(9) Incorporated by reference is the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1999 (filed on October 12,
1999).
II-2
<PAGE>
(10) Filed herewith.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes;
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3)
of the Securities of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent, post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information, set
forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high and
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price present no
more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change in
such information in the registration statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment and of the securities being registered which remain unsold at the
termination of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 14
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claims for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such Indemnification by it is against public policy an expressed in the Act an
will be governed by the final adjudication of such issue.
II-3
<PAGE>
(c) The undersigned registrant hereby undertakes that for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boca Raton, State of Florida, on the 25th day of
January, 2000.
LEISUREPLANET HOLDINGS, LTD.
By: /s/ Clive Kabatznik
--------------------------
Clive Kabatznik, President
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Clive Kabatznik with powers of
substitution, as his attorney-in-fact, in all capacities, to sign any amendments
to this registration statement (including post-effective amendments) and to file
the same, with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming all
that said attorney-in-fact or his substitutes may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Michael Levy Chairman of the Board January 25, 2000
- -------------------------------------------
Michael Levy
/s/ Clive Kabatznik Vice Chairman of the Board, President, January 25, 2000
- ------------------------------------------- President, Chief Executive Officer,
Clive Kabatznik Chief Financial Officer, Controller
and Director
/s/ Cornelius J. Roodt Director January 25, 2000
- -------------------------------------------
Cornelius J. Roodt
/s/ George R. Garrick Director January 25, 2000
- -------------------------------------------
George R. Garrick
</TABLE>
II-5
EXHIBIT 4.9
LEISUREPLANET HOLDINGS, LTD.
PURCHASE AGREEMENT
THE SECURITIES BEING PURCHASED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR WITH ANY
SECURITIES REGULATORY AUTHORITY OF ANY JURISDICTION. THESE SECURITIES ARE
OFFERED PURSUANT TO A CLAIM OF EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
FEDERAL AND STATE SECURITIES LAWS.
THE SECURITIES BEING PURCHASED HEREBY MAY NOT BE SOLD, OFFERED,
PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED UNLESS THE SECURITIES ARE
REGISTERED UNDER THE ACT, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE ACT IS AVAILABLE, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
AGREEMENT by and between Leisureplanet Holdings, Ltd., a Bermuda
corporation (the "Company") and UBS AG, acting through its division Warburg
Dillon Read, and UBS Capital (Jersey) Ltd. (together, the "Purchaser").
RECITALS
--------
A. The Company is offering to sell 1,379,310 shares of common stock,
$.01 par value of the Company (the "Common Stock") pursuant to the Company's
Confidential Private Placement Memorandum dated November 1999 (the "Memorandum")
to the Purchaser (the "Offering"). For every three shares of the Common Stock
purchased by the Purchaser, the Purchaser shall also receive from the Company an
option (the "Option") to purchase one (1) A ordinary share, 0.1 pence per share,
of LPI Limited, a United Kingdom corporation ("LPI"), which Option is
exercisable at an exercise price of $8.00 per share. The Company may not, except
with the prior written agreement of the Purchaser, increase the number of shares
of Common Stock or the number of shares underlying the Option sold in the
Offering. The Company's Common Stock and the said Option are collectively
referred to herein as the "Securities". The aggregate purchase price for the
Securities is $19,999,995. Value Investing Partners, Inc. (the "Placement
Agent"), is acting as the Company's placement agent in connection with the
Offering.
B. In reliance upon the respective representations and warranties of
the Purchaser and the Company, and the terms and conditions hereinafter set
forth, the Purchaser desires to subscribe for, and the Company desires to sell
to the Purchaser, the Common Stock and the Option.
<PAGE>
THEREFORE, in consideration of the Recitals and the undertakings,
covenants, and promises set forth below, the parties, intending to be bound,
agree as follows:
1. SALE AND PURCHASE OF SECURITIES.
1.1 The Purchaser hereby agrees to purchase the number of Securities
set forth on the signature page hereto. Payment shall be made by December 22,
1999, against delivery of the Securities to the Purchaser, which Securities
shall be registered in the name of the Purchaser or its nominee. The date on
which the Securities are purchased and paid for is herein referred to as the
"Closing Date".
1.2 The obligation of the Purchaser to purchase and pay for the
Securities on the Closing Date pursuant to Section 1.1 is subject to the
satisfaction of the following conditions:
(a) The accuracy of the representations and warranties of the
Company contained herein as of the date hereof and as of the
Closing Date (as if they were being repeated at and as of
the Closing Date);
(b) Announcement and consummation of the transaction between the
Company and CNN on substantially the same financial and
operational terms as those contained in the Memorandum of
Understanding previously provided to the Purchaser for
review;
(c) Execution by the Company and LPI Limited of an engagement
agreement appointing Warburg Dillon Read as global
co-ordinator and sole book-runner of the IPO of LPI Limited
substantially in the form of the draft previously provided
to the Company by Warburg Dillon Read;
(d) Execution of the Option Agreement; and
(e) Receipt by the Purchaser of a legal opinion, dated the
Closing Date, from Bermuda counsel to the Company, covering
the issuance of the Securities, the execution of this
Agreement and the Option Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. In consideration for the
Purchaser agreeing to subscribe for the Securities from the Company, the Company
hereby represents and warrants to the Purchaser as follows:
2.1 The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of Bermuda. Each of First South
African Holdings Pty. Ltd., First Lifestyle Holdings Limited and LPI Limited,
has been duly organized, and is validly existing and is in good standing in the
jurisdiction of its formation. The Company owns, directly or indirectly, the
shares in its subsidiaries that it purports to own, free and clear of any liens,
claims
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<PAGE>
encumbrances or options, except for such as have been disclosed in writing to
the Purchaser prior to the date hereof.
2.2 All necessary corporate action has been duly and validly taken by
the Company to authorize the execution, delivery, and performance of this
Agreement by the Company and the issuance and sale of the Securities to be sold
by the Company pursuant to this Agreement. This Agreement and the Securities
have been duly and validly authorized, and this Agreement has been duly and
validly executed and delivered by the Company, and constitutes, and the
Securities, when executed and delivered in accordance with this Agreement, will
constitute, the legal, valid, and binding obligations of the Company enforceable
against the Company in accordance with their terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles.
2.3 The Company has all such corporate power and authority, and such
authorizations, approvals, consents, orders, licenses, certificates and permits
to enter into, deliver and perform its obligations under this Agreement and the
Securities.
2.4 The Memorandum as of its date did not, as of the date hereof does
not, and as of the Closing Date will not, and each supplement or amendment
thereto as of its date will not, contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. All other information provided to the Purchaser by the Company or
the Placement Agent with respect to the Company and its subsidiaries was
accurate and complete in all material respects when so provided.
2.5 The Securities (including the shares underlying the Option) when
issued and delivered to and paid for by the Purchaser as provided in this
Agreement will be duly and validly issued, fully paid, and non-assessable, and
none will have been issued in violation of any preemptive or similar right.
2.6 Neither the execution, delivery, and performance of this Agreement
nor the consummation of any of the transactions contemplated hereby will give
rise to a right to terminate or accelerate the due date of any payment due
under, or conflict with or result in the breach of any term or provision of, or
constitute a default (or an event which with notice or lapse of time or both
would constitute a default) under, or require any consent or waiver under, or
result in the execution or imposition of any lien, charge, or encumbrance upon
any properties or assets of the Company or LPI, pursuant to the terms of, any
indenture, mortgage, deed or trust, or other agreement or instrument to which
the Company or LPI is a party or by which any of their respective properties is
bound, or any franchise, license, permit, judgment, decree, order, statute, rule
or regulation applicable to the Company or LPI, or will violate any provision of
the charter or bylaws of the Company or LPI, (except for such consents or
waivers which have already been obtained and are in full force and effect,)
which would have a material adverse effect on the ability of the Company to
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<PAGE>
consummate the transactions contemplated hereby or on the financial condition
and results of operations of the Company and LPI taken as a whole or
individually.
2.7 As of the date hereof, the Company would be eligible to file a
Registration Statement on Form S-3 under the Act for the shares of Common Stock
on behalf of the holders thereof.
2.8 The Company has been subject to the reporting requirements under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and has
filed for the past twelve (12) months all reports to be filed thereunder, and
such reports are complete and correct. There is no material information relating
to the Company and LPI that has not been disclosed to the public. The Company
agrees to maintain its reporting status under the Exchange Act and to file all
reports required thereunder when due.
2.9 Except as disclosed in the Memorandum there are no material
claims, actions, suits, proceedings, arbitrations, investigations or inquiries
before any governmental agency, court or tribunal, domestic or foreign, pending,
or to the Company's knowledge, threatened, against the Company.
2.10 Except as disclosed in the Memorandum or reflected or reserved
against in the financial statements included in the Company's Form 10-Q for the
fiscal quarter ended September 30, 1999, the Company, on a consolidated basis,
had no liabilities, debts, obligations or claims, whether accrued, contingent,
absolute or otherwise, whether due or to become due, except to the extent such
liabilities were incurred in the ordinary course of business and would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole,
other than continued losses suffered by LPI Limited.
2.11 The Common Stock is listed on The Nasdaq National Stock Market.
For as long as the Purchaser is the beneficial owner of the Common Stock, the
Company shall use its best efforts to maintain the listing of the Common Stock
on The Nasdaq Stock Market or another national exchange.
2.12 The Company shall use the proceeds of the Offering substantially
in the manner described in the section of the Memorandum captioned "Use of
Proceeds."
2.13 Schedule 2.13 to this Agreement sets out accurately and
completely: (a) the outstanding indebtedness of the Company and its subsidiaries
as at September 30, 1999, which has not materially changed since that date; (b)
to the extent of 99% accuracy, the number of shares of each class in the Company
and LPI currently outstanding (issued); and (c) to the extent of 99% accuracy,
the number of shares of each class in the Company and LPI currently subject to
warrants, options or other rights and the proceeds that would arise from the
exercise of such warrants, options or other rights.
-4-
<PAGE>
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser, hereby
represents and warrants to the Company as follows:
3.1 The Purchaser acknowledges receipt of the Memorandum, setting
forth the terms of the Offering. The Purchaser, or his advisor, has carefully
reviewed the Memorandum, and as such understands the characteristics of the
Securities.
3.2 The Purchaser is aware that the offer and sale of the Securities
have not been registered under the Act, in reliance upon an exemption under the
Act and that the Securities constitute "restricted securities" under Rule 144 of
the Act. The Purchaser represents, covenants, and agrees not to sell the
Securities unless registered under the Act, or pursuant to an exemption from
registration under the Act such as by reason of Rule 144 or Regulation S under
the Act, or the private placement exemption, and any applicable securities laws
under any state in the United States ("State Acts"), and agrees not to engage in
any hedging transaction with regard to the Securities except in compliance with
the Act and State Acts. The Purchaser understands that, except as provided
below, the Company is under no obligation to register the Common Stock, the
Option, or the shares underlying the Option, or to assist the Purchaser in
complying with any exemption from registration under the Act, except for
providing any necessary instructions or opinions to the Company's transfer
agent.
3.3 The Purchaser agrees that a legend may be placed on any
certificate or certificates evidencing the Securities, stating that such
Securities have not been registered under the Act and setting forth or referring
to the restrictions on transfers and sales thereof; and the Company may place
stop transfer instructions against the Securities and the certificates
evidencing the Securities to restrict their transfer.
3.4 The Purchaser has been provided with the opportunity to discuss
the terms and conditions of the Offering and the business of the Company and LPI
Limited with members of management and to review all relevant financial
information, books, records, and other information concerning the Company and
LPI Limited, and the Securities to be issued, such that the Purchaser is
familiar with the business, finances, and general prospects for the future of
the Company and LPI Limited.
3.5 The Purchaser has the full right, power, and authority to enter
into this Agreement and to carry out and consummate the purchase of the
Securities contemplated herein. This Agreement constitutes the legal, valid, and
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles.
3.6 The Purchaser, or its adviser, has such knowledge and experience
in financial and business matters that the Purchaser is capable of evaluating
the merits and risks of, and protecting his interests in connection with, a
purchase of the Securities. The Purchaser is acquiring
-5-
<PAGE>
the Securities for its own account and is not a "distributor" of the Securities
within the meaning of Regulation S under the Act. The Purchaser is financially
able to hold the Securities for an indefinite period.
3.7 Initial One:
________a. The Purchaser is not a "U.S. person" as such term is defined
under the Act ("U.S. Person") nor is the Purchaser acquiring the
Securities for the account or benefit of any U.S. Person. The
Purchaser understands that a U.S. Person includes (a) any natural
person resident in the United States; (b) any partnership or
corporation organized or incorporated under any state in the
United States; (c) any estate of which any executor or
administrator is a U.S. Person; (d) any trust of which any
trustee is a U.S. Person; (e) any agency or branch of a foreign
entity located in the United States; (f) any non-discretionary
account or similar account (other that an estate or trust) held
by a dealer or other fiduciary organized, incorporated, or (if an
individual) resident in the United States; and (g) any
partnership or corporation (i) organized or incorporated under
the laws of any foreign jurisdiction and (ii) formed by a U.S.
Person principally for the purpose of investing in securities not
registered under the Act, unless it is organized or incorporated,
and owned by accredited investors (as defined in Rule 501(a)
under the Act) who are not natural persons, estates, or trusts.
The Purchaser, if an individual, has a net worth equal to or
greater than U.S. $1 million, and is a resident of the country
set forth on the signature page. The Purchaser, if a partnership,
corporation, limited liability company, or other entity, has a
net worth equal to or greater than U.S. $5 million and has not
been formed for the purpose of making this investment. The
Purchaser is making this subscription from its offices at the
address set forth below. The Purchaser understands that the
exemption afforded by Regulation S requires that the purchasers
of the Securities not be in the United States when the offer is
made. The purchase of the Securities hereunder by the Purchaser
is in accordance with all securities and other laws of the
jurisdiction in which it is incorporated or legally resident.
This Agreement has not been executed or delivered by the
Purchaser in the United States.
______b. The Purchaser satisfies the definition of "accredited investor"
as set forth in Rule 501(a) of Regulation D under the Act, and
the Purchaser has adequate means for providing for his current
financial needs and contingencies, has no need for liquidity in
the investment contemplated hereby and is able to bear the risk
of loss of its entire investment, or the Purchaser is a
"qualified institutional buyer," as such term is defined in Rule
144A under the Act.
3.8 Except as set forth herein and in the Memorandum, no
representations, assurances, or warranties have been made to the Purchaser or
its adviser, by the Company, LPI, or the Placement Agent, any of their
respective officers, directors, agents, employees or affiliates, or by anyone
else on their behalf, concerning the future profitability of the Company or LPI,
or the tax
-6-
<PAGE>
consequences of the Purchaser's ownership of the Securities. In
entering into this transaction the Purchaser is not relying upon any
information, other than that contained herein and in the Memorandum and in the
other information presented to the Purchaser by the Company or the Placement
Agent, and the results of its own independent investigation.
4. REGISTRATION OF THE COMMON STOCK.
4.1 On or before January 31, 2000, the Company shall file with
the Securities and Exchange Commission (the "Commission") a registration
statement on a Form S-3, if eligible, or on such other form available for use by
the Company, covering the sale of the Common Stock by the Purchaser from time to
time through The Nasdaq Stock Market or the facilities of any national
securities exchange on which the Common Stock is then traded. The Company shall
use its best efforts to cause the registration statement to become effective
within 60 days after the registration statement is filed by the Company.
4.2 The Company shall use its best efforts (including, without
limitation, preparation of necessary post-effect amendments and supplements) to
cause the registration statement to remain effective until the earlier of (a)
the sale of all shares of Common Stock being sold pursuant thereto, or (b) two
years following the date hereof (or any additional period that Purchaser is
required to deliver a Prospectus if it is deemed an "affiliate"). The Company
shall ensure that at all times the registration statement and the related
prospectus shall comply with the requirements of the Act and shall not contain a
misstatement or omission of a material fact.
4.3 The Company shall furnish to the Purchaser such number of
copies of the prospectus as the Purchaser may reasonably request in order to
effect the sale of the Common Stock to be offered and sold by the Purchaser; but
only while the Company is required to cause the registration statement to remain
current.
4.4 The Company shall use its best efforts to qualify the
offering under applicable blue sky or other securities laws of such
jurisdictions as may be specified by the Purchaser; provided, however, that the
Company shall not be obligated to qualify as a foreign corporation to do
business under the laws of any jurisdiction in which it is not then qualified or
to file any general consent to service of process.
4.5 The Company shall bear all expenses in connection with
registration of the Common Stock pursuant to this Article 4, other than fees and
expenses, if any, of counsel or other advisers to the Purchaser and any expenses
related to the sale of the Common Stock, including, without limitation, broker's
discounts, commissions, or fees of any nature and transfer taxes or fees of any
nature.
4.6 It shall be a condition precedent to the obligations of the
Company to take any action with respect to registering the Common Stock that the
Purchaser furnish the Company in writing such information regarding the
Purchaser, the Common Stock, and other securities of the
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<PAGE>
Company held by the Purchaser, and the distribution of such securities as the
Company may from time to time reasonably request in writing.
4.7 The Purchaser agrees to notify the Company, at any time when
a prospectus is required to be delivered under the Act, upon discovery that, or
upon knowledge of the happening of any event a result of which, the prospectus
included in such registration statement, as then in effect, includes with
respect to the Purchaser, or which it believes includes with respect to the
Company, an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make a statement therein not
misleading in light of the circumstances under which they were made. The
Purchaser may also notify the Company, at any such time, if it believes the
prospectus includes with respect to the Company any such untrue statement or
omission (but the failure to so notify the Company shall not excuse the Company
from any of its obligations to the Purchaser hereunder). Promptly upon receipt
of any such notice, the Company will amend or supplement the registration
statement to include such information.
4.8 The Purchaser agrees to discontinue the Purchaser's
disposition of Common Stock pursuant to a registration statement relating to
such Common Stock, upon notice from the Company that it must amend or supplement
the registration statement based upon advice of counsel or administrative
requirement. The Company will use its best efforts to promptly amend or
supplement the registration statement so as to permit the Purchaser to continue
sales thereunder.
4.9 The Purchaser agrees to discontinue the Purchaser's
disposition of Common Stock pursuant to a registration statement relating to
such Common Stock during the 7 days prior to, and during the 180-day period (or
such shorter period to which the Company is subject) which begins on the
effective date of a registration statement in connection with an underwritten
public offering, if required by the managing underwriter in such underwritten
offering.
4.10 In the event the Company satisfies its registration
obligation pursuant to this Article 4 pursuant to an underwritten public
offering, the Purchaser agrees that, if required by the managing underwriter in
such underwritten offering, it will not dispose of its shares of Common Stock
during the 7 days prior to, and during the 180-day period (or such shorter
period to which the Company is subject) which begins on the effective date of
such registration statement in connection with an underwritten public offering.
5. INDEMNIFICATION.
5.1 To the extent permitted by law, the Company will, and hereby
does, indemnify and hold harmless the Purchaser, officers and directors of the
Purchaser, each other person who participates as an underwriter in the offering
or sale of such securities and each other person, if any, who controls the
Purchaser within the meaning of the Act, against any losses, claims, damages or
liabilities, joint or several, to which the Purchaser or any underwriter or
controlling person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or
-8-
<PAGE>
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which the Common Stock were registered under the Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company will reimburse the Purchaser
and each such underwriter and controlling person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by the Purchaser expressly for use in the preparation
thereof, provided further that the Company shall not be liable to any person who
participates as an underwriter in the offering or sale of Common Stock or any
other person, if any, who controls such underwriter within the meaning of the
Act, in any such case to the extent that any such loss, claim, damage, liability
(or action or proceeding in respect thereof) or expense arises out of such
person's failure to send or give a copy of the final prospectus, as the same may
be then supplemented or amended, to the person asserting an untrue statement or
alleged untrue statement or omission or alleged omission at or prior to the
written confirmation of the sale of the Common Stock to such person if such
statement or omission was corrected in such final prospectus. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Purchaser or any such underwriter or controlling person and
shall survive the transfer of such securities by the Purchaser.
5.2 To the extent permitted by law, the Purchaser will, and
hereby does, indemnify and hold harmless each underwriter, each person who
controls such underwriter within the meaning of the Act, the Company, each
director of the Company, each officer of the Company who signs the registration
statement and each other person, if any, who controls the Company within the
meaning of the Act against any losses, claims, damages, or liabilities, joint or
several, to which the Company, or such director, officer, underwriter, or
controlling person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement in, or omission or alleged omission
from, such registration statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto,
if such statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by the Purchaser expressly for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement; provided that the Purchaser shall not be
liable to any person who participates as an underwriter in the offering or sale
of the Common Stock or any other person who controls such
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<PAGE>
underwriter within the meaning of the Act, in any such case to the extent that
any such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of such person's failure to send or give a copy
of the final prospectus, as the same may be then supplemented or amended, to the
person asserting an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of the
Common Stock to such person if such statement or omission was corrected in such
final prospectus. Such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of any underwriter, the
Company or any such director, officer or controlling person and shall survive
the transfer of such securities by the Purchaser.
5.3 If the indemnification provided for in this Section 5 from
the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
5.4 Indemnification similar to that specified in the preceding
subdivisions of this Article 5 (with appropriate modifications) shall be given
by the Company and the Purchaser with respect to any required registration or
other qualification of securities under any federal or state law or regulation
of any governmental authority other than the Act.
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<PAGE>
6. MISCELLANEOUS.
6.1 This Agreement shall be binding upon and inure to the benefit
of the parties, their respective legal representatives, heirs, successors,
assigns and transferees. Without limiting the generality of the foregoing, the
registration rights conferred in Article 4 inure to the benefit of any and all
subsequent holders of the Common Stock. Such subsequent holders, by taking and
holding such Common Stock, shall be conclusively deemed to have agreed to be
bound by and to all of the terms and provisions of this Agreement.
6.2 This Agreement sets forth the entire agreement and
understanding of the parties in respect of the subject matter hereof and
supersedes all prior agreements, arrangements, and understandings relating to
the subject matter hereof.
6.3 This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument. This Agreement may be delivered by telecopy, facsimile transmission,
or other electronic transmission, all with the same effect as if the same was a
duly delivered original manual counterpart.
6.4 This Agreement shall be governed and construed by the laws of
the state of New York, without giving effect to conflicts of law.
6.5 Each of the parties hereto hereby irrevocably consents and
submits to the non-exclusive jurisdiction of the United States District Court
for the Southern District of New York in connection with any proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby,
waives any objection to venue in such District (unless such court lacks
jurisdiction with respect to such proceeding, in which case, each of the parties
hereto irrevocably consents to the jurisdiction of the courts of the State of
New York in connection with such proceeding and waives any objection to venue in
the State of New York).
6.6 Any notice, report, demand, waiver, consent or other
communication given by a party under this Agreement (each a "Notice") shall be
in writing, may be given by a party or its legal counsel, and shall be deemed to
be duly given (i) when personally delivered, or (ii) upon delivery by an
internationally recognized overnight courier service which provides evidence of
delivery, or (iii) when five (5) days have elapsed after its transmittal by
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party at that party's address as it appears below or another
address of which that party has given notice or (iv) when delivered by facsimile
transmission if a copy thereof is also subsequently delivered in person, by
overnight courier or by registered or certified mail as contemplated above.
Notices of address change shall be effective only upon receipt notwithstanding
the provisions of the foregoing sentence.
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<PAGE>
Notice to the Company shall be sufficient if given to:
Leisureplanet Holdings, Ltd.
1348 Washington Avenue, Suite 155
Miami, Florida 33139
Attn: Clive Kabatznik
Fax: (305) 856-4057
With a copy to:
(Prior to January 21, 2000):
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
Attn: Henry I. Rothman, Esq.
Fax: (212) 704-6288
(After January 21, 2000):
Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attn: Henry I. Rothman
Fax: (212) 704-6288
Notice to the Purchaser shall be sufficient if given to:
Robert Kahn
UBS Capital
100 Liverpool Street
London EC2M2RH
Fax: 0207 568 7003
and
Warburg Dillon Read
a division of UBS A9
2 Finsbury Avenue
London EC2M 2PP
Attn: Tom Cooper
Fax: 0207 568 0901
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<PAGE>
6.7 Throughout this Agreement, where such meanings would be appropriate, the
masculine shall be deemed to include the feminine and the neuter and the
singular shall be deemed to include the plural.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the
dates set forth below:
UBSAG, acting through its division Subscribed for:
Warburg Dillon Read
By: 1,379,310 Shares, $14,500,000
------------------------------- --------- ----------
UBS Capital (Jersey) Ltd.
By: 459,700 Option, $ 5,499,995
-------------------------------- ------- ---------
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<PAGE>
THE PURCHASER MUST INITIAL SUBSECTION (a) OR (b) OF SECTION 3.
Registration Instructions:
(If the Common Stock is to be registered in a
name different from that of the Purchaser)
- --------------------------------- --------------------------------------
Name Contact Name
- --------------------------------- --------------------------------------
Account Reference (if applicable) Contact Telephone Number
- --------------------------------
Street or P. O. Box
- --------------------------------
City and State
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The foregoing offer of the Purchaser to subscribe for the Common Stock and the
Option is hereby accepted in full
Agreed to:
LEISUREPLANET HOLDINGS, LTD.
By:______________________________
Name:____________________________
Title:_____________________________
Date:_____________________________
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EXHIBIT 4.10
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.
No. ____
ISSUED: ______________, 1999
VOID AFTER: ___________, 2004
LEISUREPLANET HOLDINGS, LTD.
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., Seattle time, on June 30,
2004 (the "Exercise Period"), subject to the provisions hereof, to purchase in
whole or from time to time in part up to 720,000 fully paid and nonassessable
shares of Common Stock, $.01 par value per share, of LeisurePlanet Holdings,
Ltd., a Bermuda corporation (the "Company"), at a price of $.01 per share (the
"Exercise Price") (such number of shares subject to this Warrant and such
Exercise Price being subject to adjustment as provided herein). 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 June 30,
1999 between the Holder, LPI, Ltd. ("LeisurePlanet") and the Company (the
"Promotion Agreement"). All capitalized terms used but not otherwise defined
herein shall have the meaning ascribed to such terms in the Promotion Agreement.
1. EXERCISE
1.1 WARRANT STOCK ELIGIBLE TO BE PURCHASED
1.1.1 VESTING OF WARRANTS
Subject to the provisions of Section 1.1.2, the rights to purchase
Warrant Stock shall vest according to the following schedule:
<PAGE>
NUMBER OF SHARES OF WARRANT
STOCK ELIGIBLE TO BE PURCHASED
VESTING DATE (THE "ELIGIBLE SHARES")
- ------------------------------------- -------------------------------------
- ----------------------------------------------------------------------------
September 30, 1999 120,000
- ----------------------------------------------------------------------------
December 31, 1999 120,000
- ----------------------------------------------------------------------------
March 31, 2000 120,000
- ----------------------------------------------------------------------------
June 30, 2000 120,000
- ----------------------------------------------------------------------------
September 30, 2000 120,000
- ----------------------------------------------------------------------------
December 31, 2000 120,000
- ----------------------------------------------------------------------------
1.1.2 CONDITION TO VESTING
During the three-month preceding a Vesting Date, if Holder shall be in
material breach as to the integration of the material elements of Items 1-8
listed in Section 4.1(b) of the Promotion Agreement or with respect to the
placement of the Promotional Placements related to Items 1-8 as described in
Exhibit B of the Promotion Agreement, LeisurePlanet shall give InfoSpace written
notice specifying the nature of such breach. If the breach is not reasonably
cured by InfoSpace within fifteen (15) days after receipt by InfoSpace of such
notice, then the Eligible Shares that would otherwise vest on such Vesting Date
shall not vest as of such date and shall not be eligible to be purchased
pursuant to this Warrant. Holder shall not be held accountable for its inability
to maintain integration where such integration is dependent upon LeisurePlanet's
technology or technical support and in such case this Warrant shall vest in full
in accordance with its terms.
1.1.3 TERMINATION OF VESTING; ACCELERATED VESTING
In the event that the Promotion Agreement is terminated for any reason
other than as a result of a material breach by the Company, then all future
vesting shall terminate as of the date of such termination, and any shares of
Warrant Stock that are unvested on such date shall not be eligible to be
purchased pursuant to this Warrant. In the event that InfoSpace.com terminates
the Promotion Agreement due to a material breach by the Company that is not
cured as provided in Section 6.2 of the Promotion Agreement, then this Warrant
shall vest in full upon such termination and all shares of Warrant Stock shall
become Eligible Shares.
1.2 PROCEDURE FOR EXERCISE
Subject to the foregoing, this Warrant may be exercised by the Holder,
as to those shares of Warrant Stock for which this Warrant is then exercisable
as determined in accordance with Section 1.1, at any time during the Exercise
Period in whole or part by delivering to the Company, 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, (b) this Warrant certificate, and (c)
cash or a bank cashier's check payable to the Company in the amount of the
Exercise Price multiplied by the
<PAGE>
number of shares for which this Warrant is being exercised (the "Purchase
Price"). 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, Seattle time, on the date such
exercise is completed and all documents specified above are delivered to the
Company.
1.3 NET EXERCISE
Notwithstanding the payment provisions set forth above, the Holder may
elect to exercise this Warrant by converting this Warrant into shares of Warrant
Stock as provided in this Section 1.3, such election to be effected by surrender
of this Warrant at the principal office of the Company, together with the Notice
of Exercise indicating such election, in which case the Company shall issue to
the Holder the number of shares of Warrant Stock determined as follows:
X = Y (A-B)
-------
A
Where: X = the number of shares of Warrant Stock to be issued
Y = the number of shares of Warrant Stock as to which the
Warrant is being exercised
A = the Fair Market Value (as defined below) of one (1)
share of Warrant Stock B = the Exercise Price
For purposes of this Section 1.3, the Fair Market Value of a share of
Warrant Stock shall mean:
1.3.1 The average of the closing bid and asked prices
of the Warrant Stock quoted in the Over-the-Counter Market Summary or the
closing price quoted on the Nasdaq National Market or any exchange on which the
Common Stock is listed, whichever is applicable, as published in the Western
Edition of The Wall Street Journal for the ten trading days prior to the date of
determination of fair market value;
1.3.2 If the Warrant Stock is not traded Over-the-Counter or on
the Nasdaq National Market or an exchange, fair market value of the Warrant
Stock per share shall be the price per share which the Company could obtain from
a willing buyer for shares sold by the Company from authorized but unissued
shares of Warrant Stock as such price shall be agreed by the parties hereto, or
if agreement cannot be reached within five (5) business days of delivery of the
notice pursuant to Section 1(b) hereof, as shall be determined by a panel of
appraisers. One appraiser shall be selected by the Holder, one appraiser shall
be chosen by the Company and the third appraiser shall be chosen by the first
two appraisers. If the appraisers cannot reach agreement as to the fair market
value on the foregoing basis on or before the thirtieth (30th) day following the
Holder's notice of election pursuant to this Section 1.3, then each appraiser
shall deliver its appraisal and the appraisal which is neither the highest nor
the lowest shall be the fair market value of a share of Warrant Stock. In the
event that the Company fails to choose an appraiser or the three appraisers fail
to deliver an appraisal on or before the thirtieth (30th) day after such notice,
the appraisal of the appraiser selected by the Holder shall control and shall be
fair market value for the purposes of this Warrant. The cost of the appraiser
selected by each party shall be borne by that party and the cost of the third
appraiser shall
<PAGE>
be borne one-half (1/2) by each party. In the event that the
Company does not select an appraiser or three appraisals are not received on or
before the thirtieth (30th) day after such notice of election, the Company shall
pay one-half (1/2) the cost of the Holder's appraiser. Appraisers selected under
this Section 1.3.2 must be unaffiliated with the Holder and the Company and must
have reasonable professional qualifications for the appraisal.
1.3.3 In the event this Warrant is exercised in connection with a
public offering of Common Stock, the Fair Market Value per share shall be deemed
to be equal to the per share offering price to the public of the public
offering. In such event, at the election of the Holder, this Warrant may be
exercised contingent upon and effective as of the closing of such public
offering and, at the election of the Holder, the exercise of this Warrant may be
further conditioned upon the sale in conjunction with such public offering of
all or a portion of the shares of Warrant Stock.
1.3.4 In conjunction with a Reorganization (as defined in Section
4), then the Fair Market Value per share shall be the value received by the
holders of Warrant Stock pursuant to such transaction for each share of Warrant
Stock, and such purchase shall be effective upon the closing of such
transaction, subject to the due, proper and prior surrender of this Warrant.
2. DELIVERY OF STOCK CERTIFICATE
Within twenty days after the exercise of this Warrant (in full or in part)
and payment of the Purchase Price then due, 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.
<PAGE>
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, 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 thirty (30) 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 to 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
<PAGE>
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 15 days prior to the Record Date therein specified.
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
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; provided, however, that no
such opinion of counsel shall be necessary for a transfer of Warrant Stock
pursuant to Rule 144(k) promulgated under the Securities Act or any successor
rule thereto Rule 144(k), 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, (ii) the Company shall have waived the requirements of
such legends or (iii) the transfer of Warrant Stock shall be made in compliance
with the requirements of Rule 144(k).
9. HOLDER ITS OWNER
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.
<PAGE>
10. WARRANTHOLDER RIGHTS
10.1 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 rights with respect to such shares of Warrant Stock
as set forth on Exhibit A attached hereto (the "Rights Agreement").
10.2 NO STOCKHOLDER RIGHTS
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 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 Washington. 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, as such period may be adjusted
pursuant to Section 4 hereof. 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
<PAGE>
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.
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:
LeisurePlanet Holdings, Ltd.
----------------------------
----------------------------
----------------------------
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
<PAGE>
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 for investment and not with a view to, or for sale in connection with,
any distribution thereof.
<PAGE>
IN WITNESS WHEREOF, the Company has executed this Warrant as of the
date first written above.
LEISUREPLANET HOLDINGS, LTD.
By:
---------------------------
Its:
--------------------------
ACCEPTED AND AGREED:
InfoSpace.com, Inc.
- -----------------------------
By:
--------------------------
Its:
-------------------------
Date:
------------------------
<PAGE>
NOTICE OF EXERCISE
TO LEISUREPLANET HOLDINGS, LTD.
1. The undersigned hereby elects to purchase __________ shares
of Common Stock of LeisurePlanet Holdings, Ltd. pursuant to the terms of the
attached Warrant.
2. Method of Exercise (Please initial the applicable blank):
___ The undersigned elects to exercise the attached
Warrant by means of a cash payment, and tenders
herewith payment in full for the purchase price of
the shares being purchased, together with all
applicable transfer taxes, if any.
___ The undersigned elects to exercise the attached
Warrant by means of the net exercise provisions of
Section 1.3 of the Warrant.
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:
------------------------------------------
(Name)
------------------------------------------
------------------------------------------
(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: ____________________
-------------------------
Holder
By:
----------------------
Its:
---------------------
<PAGE>
EXHIBIT A
REGISTRATION RIGHTS
SECTION 1. REGISTRATION RIGHTS
1.1 CERTAIN DEFINITIONS
As used in this Exhibit, the following terms shall have the following
respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"HOLDER" shall mean the Holder and any person holding
Registrable Securities to whom the rights under this Agreement have been
transferred in accordance with Section 1.13 hereof.
"INITIAL PUBLIC OFFERING" shall mean the first public offering
of Common Stock by the Company to the public pursuant to a registration
statement filed with, and declared effective by, the Commission under the
Securities Act.
The terms "REGISTER", "REGISTERED" and "REGISTRATION" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"REGISTRATION EXPENSES" shall mean all expenses incurred by
the Company in complying with Sections 1.2 and 1.3 hereof, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, and the expense of any special audits incident to or required by
any such registration (but excluding the compensation of regular employees of
the Company which shall be paid in any event by the Company).
"REGISTRABLE SECURITIES" means the Warrant Stock or other
securities issued or issuable with respect to the Warrant Stock upon any stock
split, stock dividend, recapitalization or similar event, or any Common Stock
otherwise issued or issuable with respect to the Warrant Stock; provided,
however, that shares of Common Stock or other securities shall only be treated
as Registrable Securities if and so long as they have not been (A) sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction, (B) sold in a transaction exempt from the registration
and prospectus delivery requirements of the Securities Act under Section 4(1)
thereof so that all transfer restrictions and restrictive legends with respect
thereto are
<PAGE>
removed upon the consummation of such sale or (C) the registration rights
associated with such securities have not been terminated pursuant to this
Agreement.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean all underwriting discounts,
selling commissions and stock transfer taxes applicable to the securities
registered by the Holders and all fees and disbursements of counsel for the
Holders (as limited by Section 1.4).
"WARRANT" shall mean the Warrant to purchase the Common Stock
of the Company to which this Exhibit is attached.
"WARRANT STOCK" shall mean the Common Stock issued or issuable
upon exercise of the Warrant.
1.2 COMPANY REGISTRATION
(a) NOTICE OF REGISTRATION. If at any time prior to June 30, 2004 the
Company shall determine to register any of its securities, either for its own
account or the account of a security holder or holders, other than (x) a
registration relating solely to employee benefit plans or (y) a registration
relating solely to a Commission Rule 145 transaction, the Company will:
(i) promptly give to each Holder written notice thereof, and
(ii) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a
written request or requests made within fifteen (15) days after
receipt of such written notice from the Company by any Holder.
(b) UNDERWRITING. If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall so
advise the Holder as a part of the written notice given pursuant to Section
1.2(a)(i). In such event, the right of any Holder to registration pursuant to
Section 1.2 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of Registrable Securities in the underwriting, to
the extent requested, to the extent provided herein. The Holder shall (together
with the Company and the other holders distributing their securities through
such underwriting (the "Other Participating Holders")) enter into an
underwriting agreement in customary form with the managing underwriter selected
for such underwriting by the Company. Notwithstanding any other provision of
this Section 1.2, if the managing underwriter determines that marketing factors
require a limitation of the number of shares to be underwritten, the managing
underwriter may limit the number of Registrable Securities to be included in the
registration and underwriting, on a pro rata basis based on the total number of
securities (including, without limitation, Registrable Securities) requested to
be registered pursuant to registration rights granted to the Holder and the
Other Participating Holders by the Company. To facilitate the allocation of
shares in accordance with the above provisions, the Company or
<PAGE>
the underwriters may round the number of shares allocated to the Holder or the
Other Participating Holders to the nearest one hundred (100) shares. If the
Holder or any Other Participating Holder disapproves of the terms of any such
underwriting, it, he or she may elect to withdraw therefrom by written notice to
the Company and the managing underwriter, delivered at least ten (10) business
days prior to the effective date of the Registration Statement. Any securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
(c) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 1.2 prior to the effectiveness of such registration, whether or not any
Holder has elected to include securities in such registration.
1.3 REGISTRATION ON FORM S-3
(a) If any Holder of Registrable Securities requests that the Company
file a registration statement on Form S-3 (or any successor form to Form S-3)
for a public offering of Registrable Securities, the reasonably anticipated
aggregate price to the public of which, net of underwriting discounts and
commissions, would exceed $1,000,000, and the Company is a registrant entitled
to use Form S-3 to register the Registrable Securities for such an offering, the
Company shall use its best efforts to cause such Registrable Securities to be
registered for the offering on such form. The Company will (i) promptly give
written notice of the proposed registration to all other Holders and (ii) as
soon as practicable use its best efforts to effect such registration (including,
without limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act and any other governmental requirements or regulations)
as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are specified in
a written request received by the Company within fifteen (15) days after receipt
of such written notice from the Company. The substantive provisions of Section
1.2(b) shall be applicable to each registration initiated under this Section
1.2.
(b) Notwithstanding the foregoing, the Company shall not be obligated
to take any action pursuant to this Section 1.3: (i) in any particular
jurisdiction in which the Company would be required to execute a general consent
to service of process in effecting such registration, qualification or
compliance, unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities Act; (ii) during
the period starting with the date sixty (60) days prior to the Company's
estimated date of filing of, and ending on the date six (6) months immediately
following the effective date of, a registration statement (other than with
respect to a registration statement relating to a Rule 145 transaction, an
offering solely to employees or any other registration which is not appropriate
for the registration of Registrable Securities), provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective; (iii) in any calendar year after the
Company has effected two (2) such registrations pursuant to this Section 1.3 in
such calendar year and each such registration has been declared or ordered
effective and has remained effective for the period specified in Section 1.5(a)
of
<PAGE>
this Agreement; and (iv) if the Company shall furnish to such Holder a
certificate signed by the President of the Company stating that, in the good
faith judgment of the Board of Directors, it would be seriously detrimental to
the Company or its stockholders for registration statements to be filed in the
near future, then the Company's obligation to use its best efforts to file a
registration statement shall be deferred for a period not to exceed one hundred
twenty (120) days from the receipt of the request to file such registration by
such Holder or Holders; provided, however, that the Company may not utilize this
right more than once in any twelve (12) month period.
1.4 EXPENSES OF REGISTRATION
All Registration Expenses incurred in connection with any registration
pursuant to Section 1.2 and up to one registration in any calendar year after
the date hereof under Section 1.3, and, at the Holder's option (i) the
reasonable cost of one special legal counsel to all holders of securities of the
Company exercising registration rights in any such registration or (ii) the
reasonable cost of one special legal counsel to the Holder in any such
registration, shall be borne by the Company; provided, however, that the
attorneys' fees related to such special legal counsel referred to in clause (ii)
borne by the Company shall in no event exceed $25,000 in any calendar year. All
Registration Expenses incurred in connection with any registration pursuant to
Section 1.3 of this Agreement above and beyond one registration in any calendar
year after the date hereof, and the cost of any counsel for the Holder in any
such registration, shall be borne by the Holder. If a registration proceeding is
begun upon the request of the Holder pursuant to Section 1.3 (if the first
request under Section 1.3 in any calendar year), but such request is
subsequently withdrawn, then the Holder may either: (i) bear all Registration
Expenses of such proceeding, in which case the Company shall be deemed not to
have effected a registration pursuant to Section 1.3 of this Exhibit, or (ii)
require the Company to bear all Registration Expenses of such proceeding, in
which case the Company shall be deemed to have effected a registration pursuant
to Section 1.3 of this Exhibit. The preceding sentence shall not apply if, at
the time of such withdrawal, the Holder has learned of a material adverse change
in the condition, business or prospects of the Company from that known to the
holder at the time of their request. Unless otherwise stated, all other Selling
Expenses relating to securities registered on behalf of the Holder shall be
borne by the Holder.
1.5 REGISTRATION PROCEDURES
In the case of each registration, qualification or compliance effected
by the Company pursuant to Sections 1.2 or 1.3 hereof, the Company will:
(a) Prepare and file with the Commission a registration statement with
respect to such securities and use its best efforts to cause such registration
statement to become and remain effective until the distribution described in the
registration statement has been completed, but in no event longer than one year;
and
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
<PAGE>
(c) Furnish to the Holders participating in such registration and to
the underwriters, if any, of the securities being registered such reasonable
number of copies of the registration statement, preliminary prospectus, final
prospectus and such other documents as such underwriters may reasonably request
in order to facilitate the public offering of such securities.
(d) Use its best efforts to register and qualify the securities covered
by such registration statement under such other securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by the Holders; provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions, unless the Company is already
subject to service in such jurisdiction and except as may be required by the
Securities Act.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(g) Cause all such Registrable Securities registered pursuant hereunder
to be listed on each securities exchange or other trading market on which
similar securities issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(i) Use its best efforts to furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to this Section 1, on
the date that such Registrable Securities are delivered to the underwriters for
sale in connection with a registration pursuant to this Section 1, if such
securities arc being sold through underwriters, (i) an opinion, dated such date,
of the counsel representing the Company for the purposes of such registration,
in form substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters and to the Holders requesting
registration of Registrable Securities and (ii) a letter dated such date, from
the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters
and to the Holder requesting registration of Registrable Securities.
<PAGE>
1.6 INDEMNIFICATION
(a) The Company will indemnify each Holder, each of its officers and
directors and partners, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, with respect to which registration,
qualification or compliance has been effected pursuant to this Section 1, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Securities Act, against all actual
out-of-pocket expenses, claims, losses, damages or liabilities (or actions in
respect thereof), including any of the foregoing incurred in any litigation or
in settlement of any litigation, commenced or threatened, arising out of or
based on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, preliminary prospectus,
offering circular or other document, or any amendment or supplement thereto,
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or any violation or any
alleged violation by the Company of the Securities Act or the Exchange Act or
any state securities law, or of any rule or regulation promulgated under any of
the foregoing applicable to the Company in connection with any such
registration, qualification or compliance, and the Company will reimburse each
such Holder, each of its officers and directors, and each person controlling
such Holder, each such underwriter and each person who controls any such
underwriter, for any legal and any other actual out-of-pocket expenses
reasonably incurred in connection with investigating, preparing or defending any
such claim, loss, damage, liability or action, as such expenses are incurred;
provided, however, that the indemnity agreement contained in this Section 1.6(a)
shall not apply to amounts paid in settlement of any such matter if the
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld; and provided further that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by such Holder,
controlling person or underwriter specifically for use therein.
(b) Each Holder will, if Registrable Securities held by such Holder are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers, each underwriter, if any, of the Company's securities covered by such
a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and each
other such Holder, each of its officers and directors and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
against all actual out-of-pocket expenses, claims, losses, damages and
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein, in
light of the circumstances in which they were made, or necessary to make the
statements therein not misleading, and will reimburse the Company,
<PAGE>
such Holders, such directors, officers, persons, underwriters or control persons
for any legal and any other actual out-of-pocket expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, as such expenses are incurred, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by such Holder
specifically for use therein; provided, however, that the indemnity agreement
contained in this Section 1.6(b) shall not apply to amounts paid in settlement
of any matter if the settlement is effected without the consent of the Holder,
which consent shall not be unreasonably withheld; and provided, further, that
the maximum liability of each selling Holder under this Section 1.6(b) shall be
equal to the net proceeds to such selling Holder as a result of such
registration and offering.
(c) Each party entitled to indemnification under this Section 1.6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense; provided, however, that an Indemnified Party (together with all
other Indemnified Parties which may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the
reasonable fees and expenses of such counsel to be paid by the Indemnifying
Party, if representation of such Indemnified Party by the counsel retained by
the Indemnifying Party would be inappropriate due to actual or potential
differing interests between such Indemnified Party and any other party
represented by such counsel in such proceeding. The failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying Party
of its obligations under this Section 1.6 unless the failure to give such notice
is materially prejudicial to an Indemnifying Party's ability to defend such
action. No Indemnifying Parry, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party (not to be unreasonably
withheld), consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.
(d) If the indemnification provided for in this Section 1.6 is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage, or expense referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid of payable by such indemnified
party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations;
provided, however, that, in no event shall any contribution by a Holder under
this subsection 1.6(d) exceed the net proceeds from the offering received by
such Holder, except in the case of willful fraud by such Holder. The
<PAGE>
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control.
(f) The obligations of the Company and Holders under this Section 1.6
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
1.7 INFORMATION BY HOLDER
The Holder or Holders of Registrable Securities included in any
registration shall furnish to the Company such information regarding such Holder
or Holders, the Registrable Securities held by them and the distribution
proposed by such Holder or Holders as the Company may request in writing and as
shall be required in connection with any registration, qualification or
compliance referred to in this Section 1.
1.8 RULE 144 REPORTING
With a view to making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of the
Warrant Stock to the public without registration, after such time as a public
market exists for the Common Stock of the Company, the Company agrees to use its
best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date that the Company becomes subject to the reporting
requirements of the Exchange Act.
(b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Exchange Act (at any time after it
has become subject to such reporting requirements); and
(c) So long as the Holder owns any Restricted Securities, to furnish to
the Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 and of the Exchange Act,
a copy of the most recent annual or quarterly report of the Company, and such
other reports and documents of the Company and other information in the
possession of or reasonably obtainable by the Company as the Holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing the Holder to sell any such securities without registration.
<PAGE>
1.9 TRANSFER OF REGISTRATION RIGHTS
The rights to cause the Company to register securities granted to the
Holder under Sections 1.2 and 1.3 may be assigned to a transferee or assignee in
connection with any transfer or assignment of Registrable Securities by the
Holder (together with any affiliate); provided, however, that (a) such transfer
may otherwise be effected in accordance with applicable securities laws, (b)
notice of such assignment is given to the Company, (c) such transferee or
assignee (i) is a wholly-owned subsidiary or constituent partner (including
limited partners, retired partners, spouses and ancestors, lineal descendants
and siblings of such partners or spouses who acquire Registrable Securities by
gift, will or intestate succession) of the Holder, or (ii) acquires from the
Holder at least 10% of the Holder's Warrant Stock and (d) agrees to be bound by
the terms and conditions of this Exhibit A.
1.10 TERMINATION OF RIGHTS
The rights of any particular Holder to cause the Company to register
securities under Sections 1.2 and 1.3 shall terminate with respect to such
Holder on the earlier of (a) the fifth anniversary of the effective date of the
Company's Initial Public Offering and (b) such time as Rule 144 or another
similar exemption under the Securities Act is available for the sale of all such
Holders securities during a three (3)-month period without registration.
FINANCIAL INFORMATION
The Company hereby agrees to furnish to each Holder the following
reports:
(a) As soon as practicable after the end of each fiscal year and in any
event within ninety (90) days thereafter, a copy of the Company's Form 10-K for
such fiscal year; and
(b) As soon as practicable after the end of each quarter, and in any
event within 45 days thereafter, a copy of the Company's Form 10-Q for such
quarter.
EXHIBIT 5.1
[Conyers Dill & Pearman Letterhead]
Leisureplanet Holdings, Ltd.
Clarendon House
Church Street
Hamilton HM CX
Bermuda
January 28, 2000
Re: Leisureplanet Holdings, Ltd.
Gentlemen:
We have acted as special legal counsel in Bermuda to Leisureplanet
Holdings, Ltd. (the "Company") in connection with its filing of a Registration
Statement on Form S-3 (the "Registration Statement") covering: (i) an aggregate
of 1,511,547 shares of Common Stock, 1,379,310 of which were issued pursuant to
a Purchase Agreement dated December 22, 1999, and 132,237 of which were issued
in connection with the Company's acquisition of its South African subsidiaries,
Gull Foods and Fifers Bakery (collectively, the "Shares"), (ii) an aggregate of
135,000 shares of Common Stock issuable upon exercise of a warrant (the "First
Warrant") issued to Value Investing Partners, Inc. (the "First Warrant Shares"),
(iii) an aggregate of 800,000 shares of Common Stock issuable upon exercise of
certain unit purchase options (the "Unit Purchase Options") and class A warrants
and class B warrants (the "Underlying Warrants") underlying the Unit Purchase
Options (the "UPO Shares"), and (iv) an aggregate of 720,000 shares of Common
Stock issuable upon exercise of a warrant (the "Second Warrant") issued to
InfoSpace.com, Inc. (the "Second Warrant Shares").
For the purposes of giving this opinion, we have examined a copy of the
Registration Statement, the Company's Memorandum of Association and Bye-Laws as
amended to date, and minutes of meetings of its directors and shareholders.
With respect to factual matters, we have relied upon statements and
certificates of officers of the Company. We have also reviewed such other
matters of law and examined and relied upon such other documents, records and
certificates as we have deemed relevant hereto. In all such examinations we have
assumed conformity with the original documents of all documents submitted to us
as conformed or photostatic copies, the authenticity of all documents as
originals and the genuineness of all signatures on all documents submitted to
us.
On the basis of the foregoing, we are of the opinion that:
(i) the Shares have been validly authorized and legally issued and
are fully paid and non-assessable;
(ii) the First Warrant Shares, when issued upon exercise in
accordance with the First Warrant, will be validly issued,
fully paid and non-assessable;
<PAGE>
(iii) the UPO Shares, when issued upon exercise in accordance with
the Unit Purchase Options or the Underlying Warrants, will be
validly issued, fully paid and non-assessable;
(iv) the Second Warrant Shares, when issued upon exercise in
accordance with the Second Warrant, will be validly issued,
fully paid and non-assessable.
As used in this opinion in relation to any shares, the term
"non-assessable" means that no further sums are required to be paid by the
holders of such shares in connection with the issue thereof.
We hereby consent to the use of our name under the caption "Legal
Matters" in the prospectus constituting a part of the Registration Statement and
to the filing of a copy of this opinion as an Exhibit thereto.
Very truly yours,
/s/ Conyers Dill & Pearman
Conyers Dill & Pearman
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in this
registration statement of Leisureplanet Holdings, Ltd., on Form S-3 and related
prospectus, our report dated October 12, 1999 included with Leisureplanet
Holdings, Ltd.'s Annual Report on Form 10-K for the year ended June 30, 1999,
and our audits of the consolidated financial statements of Leisureplanet
Holdings, Ltd. and subsidiaries as of June 30, 1999 and 1998, and for each of
the three years in the period ended June 30, 1999. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
/s/ PricewaterhouseCoopers Inc
PricewaterhouseCoopers Inc
Registered Accountants and Auditors
Chartered Accountants (SA)
Sandton, South Africa
January 24, 2000
