UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) NOVEMBER 17, 1999
Commission File No. 0-25357
TRAVELNOW.COM INC.
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(Name of Small Business Issuer in its Charter)
Florida 59-3391244
------- ----------
(State or other jurisdiction (I.R.S. Employer Identification No.)
Incorporation or organization)
318 Park Central East - Suite 306, Springfield, Missouri 65806
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(Address of Principal Executive Offices) (Zip Code)
(417) 864-3600
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(Issuer's Telephone Number, Including Area Code)
N/A
---
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS.
On January 5, 2000 TravelNow.com Inc., a Florida corporation ("TravelNow"
or the "Company") entered into a Class A Convertible Preferred Stock Purchase
Agreement (the "Agreement") with Raptor Global Portfolio, Ltd., and on its own
behalf and on behalf of Tudor Private Equity Fund, L.P., Tudor Arbitrage
Partners, L.P., Tudor BVI Futures, Ltd., Raptor Global Fund, L.P., Raptor Global
Fund Ltd., Raptor Global Portfolio, Ltd., ALTAR Rock Fund, L.P. or any funds or
other investment vehicles or entities of which any of the forgoing entities are
Affiliates, or any Affiliate or Affiliated Group of Tudor Investment Corporation
and/or Tudor Global Trading, Inc. (collectively referred to herein as either the
"Purchasers" or the "Tudor Entities"). Subject to the terms of the Agreement,
the Company agreed to issue and sell Five Hundred Thousand (500,000) shares of
Class A Convertible Preferred Stock, no par value (the "Preferred Shares") to
the Purchasers as follows:
Purchaser Name Number of Shares Purchased
- -------------- --------------------------
Raptor Global Portfolio, Ltd. 497,820
Tudor Private Equity Fund, L.P. 0
Tudor Arbitrage Partners, L.P. 0
Tudor BVI Futures, Ltd. 0
Raptor Global Fund, L.P. 0
Raptor Global Fund, Ltd. 0
ALTAR Rock Fund, L.P. 2,180
All other Tudor Entities
as defined in Section 8.5 of the Agreement 0
-------
TOTAL SHARES SOLD: 500,000
=======
The Preferred Shares have a face value equal to Nine Dollars ($9.00) per
share and bear dividends at eight percent (8%) per annum per share on the face
value.
The Class A Convertible Preferred Stock will be automatically converted
into shares of TravelNow's common stock on a share-for-share basis immediately
upon the fulfillment of both of the following conditions: (1) the effectiveness
of a registration statement filed by the Company with the Securities and
Exchange Commission covering an amount of the common stock sufficient to allow
for the sale of all common stock issuable upon conversion of all then
outstanding shares of Class A Convertible Preferred Stock; and (2) the listing
of the common stock of the Company on either the Nasdaq SmallCap Market or the
Nasdaq National Market System.
Regardless of whether or not the Class A Convertible Preferred Stock is
automatically converted pursuant to the fulfillment of the conditions stated
above, the Purchasers holding shares of the Class A Convertible Preferred Stock
shall have the right to convert their shares of Class A Convertible Preferred
Stock into shares of common stock of the Company.
The number of shares of common stock to which the holder of Class A
Convertible Preferred Stock is entitled upon such conversion is equal to the
product obtained by multiplying (1) the number of shares of Class A Convertible
Preferred Stock being converted by (2) the Applicable Conversion Rate (as
-2-
<PAGE>
defined below). The Applicable Conversion Rate in effect at any time for the
Class A Convertible Preferred Stock is equal to the quotient obtained by
dividing (1) the sum of $9.00 plus an amount equal to all accrued but unpaid
dividends on a share of Class A Convertible Preferred Stock by (2) the
Applicable Conversion Value, which is $9.00.
Furthermore, if the Company fails to fulfill the conditions required for
the automatic conversion of the Class A Convertible Preferred Stock on or prior
to December 31, 2000, then the holders of shares of Class A Convertible
Preferred Stock on such date shall have the right (the "Redemption Right"), but
not the obligation, to sell all but not less than all of their shares of Class A
Convertible Preferred Stock to the Company for an amount of cash equal to the
greater of the sum of (i) the face value thereof (subject to proportionate
adjustment in the event of any stock dividend, stock split, combination of
shares, reorganization, recapitalization, reclassification or other similar
event affecting the Class A Convertible Preferred Stock, plus any accrued and
unpaid dividends thereon; and (ii) the then current fair market value per share
of Class A Convertible Preferred Stock based on a valuation of the Company as of
the applicable redemption date. Each holder of shares of Class A Convertible
Preferred Stock may make redemption of such shares as follows: (i) between
January 1, 2001 and March 31, 2001 (and inclusive of both such dates); or (ii)
between January 1, 2002 and March 31, 2002 (and inclusive of both such dates).
Under no circumstances shall the Redemption Right remain valid after March 31,
2002.
The information set forth above is qualified in its entirety by reference
to the Articles of Amendment to the Articles of Incorporation of TravelNow.com
Inc. and the TravelNow.com Inc. Class A Convertible Preferred Stock Purchase
Agreement, copies of which are attached hereto as Exhibits 3.1 and 10.0,
respectively, and incorporated herein by reference.
On November 17, 1999, TravelNow issued 25,000 shares of its restricted
common stock, no par value, at $10.00 per share, for a total offering price of
$250,000. The recipient, Finter Bank Z[upsilon]rich, is a foreign investor and
acquired the securities for investment only and not with a view to or for sale
in connection with any distribution. The issuance was done pursuant to an
exemption from the registration requirements of the Securities Act of 1933, as
amended, found in Section 4(2).
The following financial schedule shows the pro forma impact of the sales of
common and preferred stock on the Company's balance sheet as reported for
September 30, 1999. Since both the common and preferred shares that were issued
have no par value, the proceeds of the sales are recognized entirely as
increases to Additional Paid-In Capital.
-3-
<PAGE>
<TABLE>
<CAPTION>
TRAVELNOW.COM INC.
PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1999
(Unaudited)
Common Preferred
9/30/1999 Stock Sale Stock Sale Pro Forma
ASSETS As Reported 11/17/1999 1/5/2000 9/30/1999
- ------ ----------- ---------- -------- ---------
<S> <C> <C> <C> <C>
Cash and Cash Equivalents $ 234,473 $ 250,000 $ 4,500,000 $ 4,984,473
Accounts Receivable 462,522 0 0 462,522
----------- ----------- ----------- -----------
Current Assets 696,995 250,000 4,500,000 5,446,995
Property and Equipment - Net 90,602 0 0 90,602
Construction In Process - Software 164,455 0 0 164,455
Investment - Nippon TravelNow,
K.K 42,468 0 0 42,468
----------- ----------- ----------- -----------
Total Assets $ 994,520 $ 250,000 $ 4,500,000 $ 5,744,520
=========== =========== =========== ===========
LIABILITIES AND
STOCKHOLDERS'
EQUITY/(DEFICIT)
- ----------------
Accounts Payable $ 468,928 $ 0 $ 0 $ 468,928
Accrued Liabilities 113,257 0 0 113,257
----------- ----------- ----------- -----------
Current Liabilities 582,185 0 0 582,185
Other Liabilities 0 0 0 0
----------- ----------- ----------- -----------
Total Liabilities 582,185 0 0 582,185
----------- ----------- ----------- -----------
Preferred Stock (No par value) 0 0 0 0
Common Stock (No par value) 0 0 0 0
Additional Paid-In Capital 1,430,416 250,000 4,500,000 6,180,416
Accumulated Deficit (1,018,081) 0 0 (1,018,081)
----------- ----------- ----------- -----------
Stockholders' Equity/(Deficit) 412,335 250,000 4,500,000 5,162,335
----------- ----------- ----------- -----------
Total Liabilities and Equity $ 994,520 $ 250,000 $ 4,500,000 $ 5,744,520
=========== =========== =========== ===========
-4-
</TABLE>
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c)
3.0 Articles of Amendment to the Articles of Incorporation of TravelNow.com
Inc., dated January 5, 2000
3.1 Articles of Amendment to the Articles of Incorporation of TravelNow.com
Inc., filed January 11, 2000
10.0 TravelNow.com Inc. Class A Convertible Preferred Stock Purchase Agreement,
dated January 5, 2000
-5-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRAVELNOW.COM INC.
Date: January 27, 2000 By: /s/ H. Whit Ehrler
----------------------
Name: H. Whit Ehrler
Title: Chief Financial Officer
-6-
EXHIBIT 3.0
ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION OF
TRAVELNOW.COM INC.
TRAVELNOW.COM INC., a Florida corporation (the "Company"), does hereby
certify as follows
A. The Articles of Incorporation of the Company are hereby amended by deleting
in its entirety the last paragraph of Article IV and replacing it with the
following:
Upon any liquidation, dissolution or winding up of the
corporation, whether voluntary or involuntary, the shares of
Preferred Stock of each series shall be entitled, before any
distribution shall be made with respect to shares of Common
Stock or to any other class of shares junior to the shares
of Preferred Stock as to the payment of dividends or
liquidating assets, to be paid the full preferential amount
fixed by the Board of Directors for such series as herein
authorized. If upon such liquidation or dissolution of the
corporation, whether voluntary or involuntary, the net
assets of the corporation shall be insufficient to permit
the payment to all outstanding shares of Preferred Stock of
all series of the full preferential amounts to which they
are respectively entitled, the entire net assets of the
corporation shall be distributed ratably to all outstanding
shares of Preferred Stock in proportion to the full
preferential amount to which each such share is entitled.
and is further amended by adding to Article IV thereof, following the last
sentence of such Article IV, the following:
1. DESIGNATION
-----------
The Board of Directors hereby authorizes the issuance of a series of
Preferred Stock to be designated as "Class A Convertible Preferred Stock." The
number of shares constituting such series shall be Five Hundred Thousand
(500,000) which shall have no par value.
2. RANK
----
The Class A Convertible Preferred shall rank senior to all other
classes or series of common and preferred stock of the Company with respect to
dividend rights, redemption and on liquidation, dissolution and winding-up.
<PAGE>
3. DIVIDENDS
---------
The Class A Convertible Preferred shall have a face value equal to
Nine Dollars ($9.00) (the "Face Value") per share and shall bear dividends at
eight percent (8%) per annum per share on the face value (the "Class A
Convertible Preferred Dividend"). Class A Convertible Preferred Dividends shall
be paid only as and when declared by the Board of Directors and shall accrue if
not declared and paid, and shall be payable in preference and priority to any
payment of any dividend on any other class or series of capital stock, including
all other classes or series of common and preferred stock of the Company. If at
any time the Company pays less than the total amount of Class A Convertible
Preferred Dividends accrued and payable with respect to all shares of Class A
Convertible Preferred Stock, such payment of Class A Convertible Preferred
Dividends shall be paid to the holders of Class A Convertible Preferred Stock
pro rata, in proportion to the number of shares of Class A Convertible Preferred
Stock held by each such holder. In the event of conversion pursuant to Section 4
below, each holder of Class A Convertible Preferred Stock may elect to receive
the then accrued and unpaid Class A Convertible Preferred Dividends in cash or
in shares of Common Stock pursuant to the provisions of Section 4 below.
4. CONVERSION
----------
The holders of shares of Class A Convertible Preferred Stock shall be
entitled to convert such shares of Class A Convertible Preferred Stock into
shares of Common Stock or other securities, properties, or rights, as set forth
in this Section 4.
(a) Holders' Option to Convert. Subject to and in compliance with the
provisions of this Section 4 and Section 5 below (to the extent applicable) and
Section 9(c) below, the holder of any shares of Class A Convertible Preferred
Stock (including those shares of Class A Convertible Preferred Stock for which a
Redemption Notice (as defined in Section 6(g) below) has been delivered to the
Company but which shares have not yet been redeemed) may, at any time, at the
option of the holder, convert shares of Class A Convertible Preferred Stock into
fully paid and non-assessable shares of Common Stock.
(i) The number of shares of Common Stock to which a holder
of Class A Convertible Preferred Stock shall be entitled upon such
conversion shall be equal to the product obtained by multiplying (A)
the number of shares of Class A Convertible Preferred Stock being
converted by (B) the Applicable Conversion Rate (determined as
provided in Section 4(c) hereof).
(ii) To exercise conversion rights under this Section 4(a),
a holder of Class A Convertible Preferred Stock to be so converted
shall give written notice to the Company at its principal office that
such holder elects to convert such shares. Such notice shall also
state the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock issuable upon
such conversion shall be issued. The certificate or certificates for
shares of Class A Convertible Preferred Stock surrendered for
conversion shall be accompanied by evidence of proper assignment
thereof to the Company.
<PAGE>
The date when such written notice is received by the Company together
with the certificate or certificates representing the shares of Class
A Convertible Preferred Stock being converted, shall be the applicable
"Conversion Date." As promptly as practicable after the applicable
Conversion Date, the Company shall issue and shall deliver to the
holder of the shares of Class A Convertible Preferred Stock being
converted, a certificate or certificates in such denominations as such
holder may request in writing for the number of full shares of Common
Stock issuable upon the conversion of such shares of Class A
Convertible Preferred Stock in accordance with the provisions of this
Section 4, plus cash as provided in Section 5(f) below in respect of
any fraction of a share of Common Stock issuable upon such conversion.
Such conversion shall be deemed to have been effected immediately
prior to the close of business on the applicable Conversion Date, and
at such time the rights of the holder as holder of the converted
shares of Class A Convertible Preferred Stock shall cease and the
person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of
record of shares of Common Stock represented thereby.
(b) Automatic Conversion.
(i) Qualified Public Offering. Each share of Class A
Convertible Preferred Stock outstanding (including those shares for
which a Redemption Notice (as defined below) has been delivered to the
Company but which shares have not yet been redeemed) shall be
converted into the number of fully paid and non-assessable shares of
Common Stock into which each such share is then convertible pursuant
to Section 4(a)(i) hereof, automatically and without further action,
immediately upon the fulfillment of both of the following conditions:
(A) the effectiveness of a registration statement filed by the Company
with the Securities and Exchange Commission covering an amount of the
Common Stock sufficient to allow for the sale of all Common Stock
issuable upon conversion of all then outstanding shares of Class A
Convertible Preferred Stock; and (B) shares of the Common Stock of the
Company are listed on either the Nasdaq Small Cap Market or the Nasdaq
National Market System.
(ii) Mechanics of Automatic Conversion. Upon any automatic
conversion of shares of Class A Convertible Preferred Stock into
shares of Common Stock pursuant to this Section 4(b), the holders of
such converted shares shall surrender the certificates formerly
representing such shares at the office of the Company or of any
transfer agent for Common Stock. Thereupon, there shall be issued and
delivered to each such holder, promptly at such office and in his name
as shown on such surrendered certificate or certificates, a
certificate or certificates for the number of shares of Common Stock
into which such shares of Class A Convertible Preferred Stock were so
converted and cash as provided in Section 5(f) below in respect of any
fraction of a share of Common Stock issuable upon such conversion. The
Company shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon such conversion unless and until
certificates formerly evidencing the converted shares of Class A
Convertible Preferred Stock are either delivered to the Company or its
transfer agent, as hereafter provided, or the holder thereof notifies
<PAGE>
the Company or such transfer agent that such certificates have been
lost, or destroyed and executes and delivers an agreement to indemnify
the Company from any loss incurred by it in connection therewith.
(c) Applicable Conversion Rate. The conversion rate (the "Applicable
Conversion Rate") in effect at any time for the Class A Convertible Preferred
Stock shall be equal to the quotient obtained by dividing (A) the sum of $9.00
(subject to proportionate adjustment for any stock dividend, stock split,
combination of shares, reorganization, recapitalization, reclassification or
other similar event affecting the Class A Convertible Preferred Stock occurring
after the date of filing of this Amendment to the Articles of Incorporation of
the Company) plus an amount equal to all accrued but unpaid dividends on a share
of Class A Convertible Preferred Stock (assuming the holder of such shares being
converted has elected to have such dividends converted to shares of Common Stock
rather than receiving cash therefor) by (B) the Applicable Conversion Value then
in effect, calculated as hereinafter provided.
(d) Applicable Conversion Values. The "Applicable Conversion Value" in
effect for the Class A Convertible Preferred Stock initially, and until first
(and subsequently) adjusted in accordance with Section 5 hereof shall be $9.00.
5. ADJUSTMENTS TO CONVERSION RATE
------------------------------
(a) Adjustments for Extraordinary Common Stock Events. Upon the
happening of an Extraordinary Common Stock Event (as defined in Section 5(i)
hereof), automatically and without further action, and simultaneously with the
happening of such Extraordinary Common Stock Event, the Applicable Conversion
Value in effect immediately prior to such Extraordinary Common Stock Event shall
be adjusted by multiplying such then effective Applicable Conversion Value by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding (excluding treasury stock) immediately before such Extraordinary
Common Stock Event and the denominator of which shall be the number of shares of
Common Stock outstanding (excluding treasury stock) immediately after such
Extraordinary Common Stock Event, and the product so obtained shall thereafter
be the Applicable Conversion Value. The Applicable Conversion Value, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive Extraordinary Common Stock Event or Events.
(b) Adjustments for Dilutive Issues.
(i) Except as otherwise provided below in this Section
5(b)(i), and except with respect to an Extraordinary Common Stock
Event, adjustments in respect of which are provided for in Section
5(a), if at any time while there are any shares of Class A Convertible
Preferred Stock outstanding, the Company issues or is deemed to issue
(as determined pursuant to Section 5(b)(ii) below) any additional
shares of Common Stock at a Net Consideration Per Share (as
hereinafter defined) less than the Applicable Conversion Value in
respect of the Class A Convertible Preferred Stock in effect
<PAGE>
immediately prior to such issuance or deemed issuance, then and in
each such case, such Applicable Conversion Value for the Class A
Convertible Preferred Stock will be reduced as follows:
(A) If such issuance and/or deemed issuance occurs
after the date of this Amendment to the Articles of
Incorporation of the Company but on or before January 4,
2002, then the Applicable Conversion Value for the Class A
Convertible Preferred Stock will be adjusted to equal the
Net Consideration Per Share (as hereinafter defined) at
which such additional shares of Common Stock are issued
and/or deemed issued.
(B) If such issuance and/or deemed issuance occurs
after January 4, 2002, then the Applicable Conversion Value
for the Class A Convertible Preferred Stock will be adjusted
to equal the result of the following formula:
New Applicable Conversion Value = (P1 x Q1) + (P2 x Q2)
---------------------
(Q1 + Q2)
where:
P1 = the Applicable Conversion Value in effect immediately prior to such
issuance or deemed issuance of additional shares of Common Stock;
Q1 = the aggregate number of shares of Common Stock outstanding (including
shares of Common Stock issuable upon conversion of all outstanding shares of
Class A Convertible Preferred Stock and the conversion, exchange and/or exercise
of all outstanding warrants, options and other convertible securities, each to
the extent then convertible, exchangeable and/or exercisable) immediately prior
to such issuance or deemed issuance of additional shares of Common Stock;
P2 = the Net Consideration Per Share (as hereinafter defined) received by the
Company for the shares of Common Stock issued and/or deemed issued in respect of
such issuance of additional shares of Common Stock; and
Q2 = the number of shares of Common Stock issued and/or deemed issued in respect
of such issuance of additional shares of Common Stock.
The issuance of shares of Common Stock upon conversion of the
outstanding shares of Class A Convertible Preferred Stock shall not be deemed to
be issuances of additional shares of Common Stock for the purposes of this
Section 5(b).
The issuance of up to an aggregate of 500,000 shares of Common Stock
or Derivative Securities (as defined in Section 5(i)) pursuant to the terms of
any employee stock option agreement or employee stock incentive or stock option
plan duly adopted by the Board of Directors of the Company issued or granted
after the date of the filing of this Amendment to the Articles of Incorporation
<PAGE>
shall not be deemed to be issuances of additional shares of Common Stock for
purposes of this Section 5(b).
For purposes of this Section 5(b), if a part or all of the
consideration received by the Company in connection with the issuance or deemed
issuance of shares of Common Stock or the issuance or deemed issuance of any of
the securities described below in paragraph (ii) of this Section 5(b) consists
of property other than cash, such consideration shall be deemed to have the same
value as is recorded on the books of the Company with respect to receipt of such
property so long as such recorded value was determined reasonably and in good
faith and with due care by the Board of Directors of the Company, and shall
otherwise be deemed to have a value equal to its fair market value.
The Applicable Conversion Value, as so reduced, shall be further
reduced in the same manner upon the happening of any successive event or events
that cause reduction under this Section 5(b)(i).
(ii) For purposes of this Section 5(b), the issuance of any
Derivative Securities shall be deemed an issuance of shares of Common
Stock with respect to Section 5(b)(i)(A) and with respect to Section
5(b)(i)(B) if the Net Consideration Per Share (as defined in Section
5(b)(ii)(A) and (B) hereof) that may be received by the Company for
such Common Stock is less than the Applicable Conversion Value in
effect immediately prior to the time of such issuance, and except as
hereinafter provided, an adjustment in the Applicable Conversion Value
shall be made upon each such issuance of Derivative Securities in the
manner provided in Section 5(b)(i)(A) and (B), as appropriate, as if
such deemed Common Stock were issued for such Net Consideration Per
Share. No adjustment of the Applicable Conversion Value shall be made
under this Section 5(b) upon the issuance of any additional shares of
Common Stock that are issued upon the exercise, conversion, or
exchange of any Derivative Securities if any such adjustment was
previously made upon the issuance of such Derivative Securities. Any
adjustment of the Applicable Conversion Value with respect to this
Section 5(b)(ii) shall be disregarded if, as, and to the extent that
the Derivative Securities that gave rise to such adjustment expire or
are canceled without having been exercised, so that the Applicable
Conversion Value effective immediately upon such cancellation or
expiration shall be equal to the Applicable Conversion Value that
otherwise would have been in effect immediately prior to the time of
the issuance of the expired or canceled Derivative Securities, with
such additional adjustments as subsequently would have been made to
that Applicable Conversion Value had the expired or canceled
Derivative Securities not been issued. In the event that the terms of
any Derivative Securities previously issued by the Company are changed
(whether by their terms or for any other reason, including without
limitation, as a result of the effects of any anti-dilution
adjustments contained therein) so as to lower the Net Consideration
Per Share payable with respect thereto (whether or not the issuance of
such Derivative Securities originally gave rise to an adjustment of
the Applicable Conversion Value), the Applicable Conversion Value
shall be recomputed as of the date of such change, so that the
Applicable Conversion Value effective immediately upon such change
shall be equal to the Applicable Conversion Value in effect at the
<PAGE>
time of the issuance of the Derivative Securities subject to such
change, adjusted for the issuance thereof in accordance with the terms
thereof after giving effect to such change, and with such additional
adjustments as subsequently would have been made to that Applicable
Conversion Value had the Derivative Securities been issued on such
changed terms. For purposes of this Section 5(b), the Net
Consideration Per Share that may be received by the Company shall be
determined as follows:
(A) "Net Consideration Per Share" shall mean the
amount equal to the total amount of consideration, if any,
received by the Company for the issuance of such Derivative
Securities or Common Stock, as the case may be, plus, in the
case of Derivative Securities, the minimum amount of
additional consideration, if any, payable to the Company
upon exercise, conversion, and/or exchange thereof for
shares of Common Stock, divided by the number of shares of
Common Stock issued or the maximum number of shares of
Common Stock that would be issued if all such Derivative
Securities were exercised or converted, as the case may be.
(B) The Net Consideration Per Share that may be
received by the Company shall be determined in each instance
as of the date of issuance of Derivative Securities or
Common Stock, as the case may be, without giving effect to
any possible future price adjustments or rate adjustments
that may be applicable with respect to such Derivative
Securities and which are contingent upon future events;
provided, that in the case of an adjustment to be made as a
result of a change in terms of such Derivative Securities,
including such changes as may result from the effects of any
anti-dilution adjustments contained therein, the Net
Consideration Per Share shall be determined as of the date
of such change.
(c) Adjustments for Reclassifications. If the Common Stock issuable
upon the conversion of the Class A Convertible Preferred Stock shall be changed
into the same or a different number of shares of any class(es) or series of
stock, whether by reclassification or otherwise (other than an Extraordinary
Common Stock Event or a reorganization, merger, consolidation, or sale of assets
provided for elsewhere in this Section 5), then and in each such event the
holder of each share of Class A Convertible Preferred Stock shall have the right
thereafter to convert such share into the kind and amount of shares of stock and
other securities and property receivable upon such reclassification or other
change by holders of the number of shares of Common Stock into which such shares
of Class A Convertible Preferred Stock might have been converted immediately
prior to such, reclassification, or change, all subject to further adjustment as
provided herein.
(d) Adjustments for Reorganizations. Except as provided in the
following paragraph, in the event that there shall be a capital reorganization
of Common Stock (other than a subdivision, combination of shares,
reclassification, or exchange of shares provided for elsewhere in this Section
5) or a merger or consolidation of the Company with or into another company, or
the sale of all or substantially all of the Company's assets or sale of more
than 50% of the voting capital stock (in a single transaction or series of
related transactions) of the Company (whether issued and outstanding, newly
issued or from treasury, or any combination thereof) to any other person, then,
<PAGE>
as a part of and as a condition to the effectiveness of such reorganization,
merger, consolidation, or sale, lawful and adequate provision shall be made so
that if the Company is not in economic effect the surviving company, each share
of Class A Convertible Preferred Stock shall be converted into a share of
capital stock of the surviving company having equivalent preferences, rights,
and privileges, except that in lieu of being able to convert into shares of
Common Stock of the Company or the successor company, the holders of shares of
Class A Convertible Preferred Stock (including any such capital stock issued
upon conversion of the Class A Convertible Preferred Stock) shall thereafter be
entitled to receive upon conversion of such Class A Convertible Preferred Stock
(including any such capital stock issued upon conversion of Class A Convertible
Preferred Stock) the number of shares of stock or other securities or property
of the Company or of the successor company resulting from such merger or
consolidation or sale, to which a holder of the number of shares of Common Stock
deliverable upon conversion of such share of Class A Convertible Preferred Stock
immediately prior to the capital reorganization, merger, consolidation, or sale
would have been entitled on such capital reorganization, merger, consolidation,
or sale. In any such case, appropriate provisions shall be made with respect to
the rights of the holders of Class A Convertible Preferred Stock (including any
such capital stock issued upon conversion of Class A Convertible Preferred
Stock) after the reorganization, merger, consolidation, or sale to the end that
the provisions of this Section 5 (including without limitation provisions for
adjustment of the Applicable Conversion Values and the number of shares issuable
upon conversion of Class A Convertible Preferred Stock or such capital stock)
shall thereafter be applicable, as nearly as may be, with respect to any shares
of stock, securities, or assets to be deliverable thereafter upon the conversion
of such Class A Convertible Preferred Stock or such capital stock.
Upon the occurrence of a capital reorganization, merger, or
consolidation of the Company or the sale of all or substantially all its assets
or sale or other disposition of more than 50% of the voting capital stock (in a
single transaction or series of related transactions) of the Company (whether
issued and outstanding, newly issued or from treasury, or any combination
thereof), as such events are more fully set forth in the first paragraph of this
Section 5(d), holders of a majority of the outstanding shares of Class A
Convertible Preferred Stock may elect treatment of their shares of Class A
Convertible Preferred Stock under Section 9(c) hereof, in lieu of treatment
pursuant to this Section 5(d) notice of which election shall be submitted in
writing to the Company at its principal offices no later than 10 days before the
effective date of such event, provided, that any such notice shall be effective
if given not later than 15 days after the date of the Company's notice, with
respect to such event, and if the holders of the majority of the outstanding
shares of Class A Convertible Preferred Stock shall elect treatment of their
shares of Class A Convertible Preferred Stock under Section 9(c) hereof, then
all holders of Class A Convertible Preferred Stock shall be bound by such
election. Subject to the provisions of Section 9(c) hereof, a holder who fails
to give such notice of election pursuant to this Section 5(d) shall be deemed to
have elected treatment under this Section 5(d) in lieu of treatment under
Section 9(c).
(e) Certificate as to Adjustments. In each case of an adjustment or
readjustment of the Applicable Conversion Rate, the Company will promptly
furnish each holder of Class A Convertible Preferred Stock with a certificate,
<PAGE>
prepared by the chief financial officer of the Company, showing such adjustment
or readjustment, and stating in detail the facts upon which such adjustment or
readjustment is based.
(f) Fractional Shares. No fractional shares of Common Stock or scrip
representing fractional shares shall be issued upon conversion of shares of
Class A Convertible Preferred Stock. Instead of any fractional shares of Common
Stock that would otherwise be issuable upon conversion of shares of Class A
Convertible Preferred Stock, the Company shall pay to the holder of the shares
of Class A Convertible Preferred Stock that were converted a cash adjustment in
respect of such fraction in an amount equal to the same fraction of the market
price per share of Common Stock (as determined in a manner reasonably prescribed
by the Board of Directors) at the close of business on the applicable Conversion
Date.
(g) Partial Conversion. In the event some but not all of the shares of
Class A Convertible Preferred Stock represented by a certificate or certificates
surrendered by a holder are converted, the Company shall execute and deliver to
or on the order of the holder, at the expense of the Company, a new certificate
representing the number of shares of Class A Convertible Preferred Stock that
were not converted.
(h) Reservation of Common Stock. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of shares of Class A
Convertible Preferred Stock, such number of shares of Common Stock as shall from
time to time be sufficient to effect the conversion of all outstanding shares of
Class A Convertible Preferred Stock, and if at any time the number of authorized
but unissued shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of Class A Convertible Preferred
Stock, then the Company shall take such corporate action as may, in the opinion
of its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.
(i) Extraordinary Common Stock Event. As used herein, "Extraordinary
Common Stock Event" means (i) the issuance of additional shares of Common Stock
or any Derivative Security as a dividend or other distribution on outstanding
Common Stock or any Derivative Security, (ii) the subdivision of outstanding
shares of Common Stock or any Derivative Security into a greater number of
shares of Common Stock or any Derivative Security, or (iii) the combination of
outstanding shares of Common Stock or any Derivative Security into a smaller
number of shares of Common Stock or any Derivative Security.
(j) Derivative Securities. As used herein, "Derivative Securities"
means (i) all shares of stock and other securities that are convertible into or
exchangeable for shares of Common Stock and (ii) all options, warrants, and
other rights to acquire shares of Common Stock or securities convertible into or
exchangeable for shares of Common Stock.
(k) Further Adjustment Provisions. In the event that, at any time as a
result of an adjustment made pursuant to this Section 5, the holder of any
shares of Class A Convertible Preferred Stock upon thereafter surrendering such
shares for conversion shall become entitled to receive any shares or other
<PAGE>
securities of the Company other than shares of Common Stock, the Applicable
Conversion Rate in respect of such other shares or securities so receivable upon
conversion of shares of Class A Convertible Preferred Stock shall thereafter be
adjusted, and shall be subject to further adjustment from time to time, in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to Class A Convertible Preferred Stock contained in this Section 5, and
the remaining provisions hereof with respect to Class A Convertible Preferred
Stock shall apply on like or similar terms to any such other shares or
securities.
6. REDEMPTION
----------
(a) Redemption Right. If on or prior to December 31, 2000 (A) a
registration statement covering a sufficient amount of the Company's Common
Stock to allow for the conversion of the then outstanding shares of Class A
Convertible Preferred Stock is not declared by the Securities and Exchange
Commission to be effective and (B) shares of the Common Stock of the Company are
not listed on either the Nasdaq SmallCap Market or the Nasdaq National Market
System, then each holder of shares of Class A Convertible Preferred Stock shall
have the right, (the "Redemption Right"), but not the obligation, to sell all,
but not less than all, of its shares of Class A Convertible Preferred Stock to
the Company for an amount of cash equal to the greater of the sum of (i) the
Face Value thereof (subject to proportionate adjustment in the event of any
stock dividend, stock split, combination of shares, reorganization,
recapitalization, reclassification or other similar event affecting the Class A
Convertible Preferred Stock) plus any accrued and unpaid dividends thereon and
(ii) the then current fair market value per share of Class A Convertible
Preferred Stock, based on a valuation of the Company as finally determined in
accordance with Sections (b)-(d) below as of the applicable Redemption Date (the
"Redemption Price"). Each holder of shares of Class A Convertible Preferred
Stock may make redemption of such shares as follows: (i) between January 1, 2001
and March 31, 2001 (and inclusive of both such dates); or (ii) between January
1, 2002 and March 31, 2002 (and inclusive of both such dates). Under no
circumstances shall the Redemption Right remain valid after March 31, 2002.
(b) Fair Market Value. Promptly upon receipt of a Redemption Notice as
defined in Section 6(g) below, the Company and the holders of a majority of the
shares of Class A Convertible Preferred Stock shall mutually agree on the
valuation of the Company. In the event such an agreement cannot be reached
within fifteen (15) days after delivery of a Redemption Notice, the Company
shall retain a nationally recognized, reputable investment banking firm
reasonably acceptable to the holders of a majority of the shares of Class A
Convertible Preferred Stock, the cost of which shall be split evenly between the
Company and the holders of Class A Convertible Preferred Stock (pro rata in
proportion to the relative number of shares held by each of them). As promptly
as is practicable, such investment banking firm shall deliver to the Company a
written report as to the fair market value of the Company as a whole, on a
going-concern basis, using customary and appropriate valuation methods, as of
the date of the most recent audited financial statements of the Company (and not
taking into account any discount for minority ownership or restrictions on
transfer of the capital stock of the Company); provided, that if such date is
more than six months prior to the Redemption Notice Date, then another audit as
of the most recent practicable date shall be conducted and used for such
<PAGE>
purpose, and the out-of-pocket expenses of such audit shall be paid by the
Company. Upon receipt of such report, the Company shall promptly send a copy
thereof to each holder of Class A Convertible Preferred Stock.
(c) First Valuation. The valuation set forth in such report (the
"First Valuation") shall be conclusive and binding on the Company and each
holder of Class A Convertible Preferred Stock unless within 14 days after
receipt of such report, the holders of a majority of the outstanding shares of
Class A Convertible Preferred Stock notify the Company in writing that they
disagree with such valuation. If such stockholders do so notify the Company,
they shall promptly engage another nationally recognized, reputable investment
banking firm, at the expense of the holders of Class A Convertible Preferred
Stock, pro rata in proportion to the relative number of shares held by each of
them, to render another written report as to the fair market value of the
Company (but without regard to any discount for minority ownership or
restrictions on transfer of the capital stock of the Company) as of the
appropriate valuation date, a copy of which shall be promptly delivered to the
Company.
(d) Second and Third Valuations. If the Company does not agree with
the valuation of the Company set forth in the second investment banking firm's
report (the "Second Valuation"), then either (i) the Company and the holders of
a majority of the outstanding shares of Class A Convertible Preferred Stock
shall agree on the fair market value or (ii) in the absence of such agreement,
the redemption price shall be the arithmetic average of the First Valuation and
the Second Valuation, unless, the difference between the First Valuation and
Second Valuation is greater than an amount equal to 5% of the higher of the two
valuations, in which case a third investment banking firm shall be appointed by
the two prior investment banking firms to render a written report as to fair
market value (but without regard to any discount for minority ownership or
restrictions on transfer of the capital stock of the Company), the cost of which
shall be split between the Company and the holders of Class A Convertible
Preferred Stock (pro rata among them in proportion to the relative number of
shares held by each of them) equally, and the fair market value shall be equal
to the arithmetic average of the two (2) closest valuations, unless the third
valuation equals the arithmetic average of the First Valuation and the Second
Valuation, in which case the fair market value shall be equal to the third
valuation.
(e) Insufficient Funds. If the Company on any Redemption Date does not
have sufficient funds legally available to redeem the shares of Class A
Convertible Preferred Stock for which redemption is required pursuant to this
Section 6, then it shall, prior to redeeming any other series or class of the
Company's preferred stock or common stock, to the maximum lawful extent redeem
such shares of Class A Convertible Preferred Stock on a pro rata basis among the
holders of Class A Convertible Preferred in proportion to the number of shares
of Class A Convertible Preferred Stock held by each of them, and shall redeem
the remaining shares of Class A Convertible Preferred Stock to be redeemed as
soon as sufficient funds are legally available.
(f) Ranking. At no time shall the Company redeem shares of any other
class or series common or preferred stock of the Company or pay the applicable
redemption price for or make any distribution, dividend or payment on shares of
<PAGE>
any other class or series of common or preferred stock of the Company to holders
of such other class or series of common or preferred stock so long as any shares
of Class A Convertible Preferred Stock are outstanding and have not been
redeemed.
(g) Mechanics of Redemption. Before the holder of shares of Class A
Convertible Preferred Stock may exercise its Redemption Right, such holder shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the Company and shall give written notice (a "Redemption Notice") to the
Company at such office that such holder elects to sell such shares of Class A
Convertible Preferred to the Company at the Redemption Price. The Company shall
immediately upon receipt of such certificates and Redemption Notice pay to such
holder by check or wire transfer the Redemption Price.
7. PREEMPTIVE RIGHTS
-----------------
(a) Preemption Notice. If the Company desires to issue shares of
Common Stock or Derivative Securities after January 4, 2000, excluding the
issuance of up to an aggregate of 500,000 shares of Common Stock or Derivative
Securities pursuant to the terms of any employee stock option agreement or
employee stock option or stock incentive plan duly adopted by the Board of
Directors of the Company issued or granted after the date of the filing of this
Amendment to the Articles of Organization, (the "Preemption Offering"), the
Company shall first notify, in writing, all holders of shares of Class A
Convertible Preferred Stock of such issuance (the "Preemption Notice"). The
Preemption Notice shall state the number of shares of Common Stock or Derivative
Securities to be offered and the offer price per share (the "Offer Price").
(b) Preemptive Right. Upon receipt of the Preemption Notice, a holder
of shares of Class A Convertible Preferred Stock shall have the right but not
the obligation prior to the closing of any Preemption Offering to purchase from
the Company, at the Offer Price, up to a number of shares of Common Stock as
would be equal to the quotient obtained by dividing (A) the number of shares of
Common Stock held by such holder (assuming the conversion of all shares of Class
A Convertible Preferred Stock and all other Derivative Securities then held by
such holder) by (B) the aggregate number of shares of Common Stock of the
Company outstanding including shares of Common Stock issuable upon the
conversion, exchange and for exercise of all outstanding Derivative Securities
including the Class A Convertible Preferred Stock (the "Preemptive Right").
8. VOTING RIGHTS
-------------
(a) Voting Rights. Except as otherwise required by law, the holders of
the Class A Convertible Preferred Stock shall be entitled to vote (on an
as-converted basis) on all matters submitted to the Company's shareholders for
decision at any annual or special meeting of the shareholders of the Company,
including the election of directors. Each share of Class A Convertible Preferred
Stock shall entitle the holder thereof to such number of votes per share as
shall equal the number of shares of Common Stock into which such share of Class
A Convertible Preferred Stock is then convertible pursuant to the applicable
provisions of Section 4(a) hereof as of the record date for the determination of
stockholders entitled to vote on such matter, or if no record date is
established, at the date such vote is taken or any written consent of
<PAGE>
stockholders is solicited (if permitted by the Company's Articles of
Incorporation and By-laws). The holder of shares of Class A Convertible
Preferred Stock and the holders of Common Stock shall vote together as a single
class on all matters submitted to a vote or consent of stockholders. The holders
of the Class A Convertible Preferred Stock shall not have the right to limit the
creation of additional classes or series of Preferred Stock or other equity
securities of the Company, provided, however, that no such additional class or
series shall rank senior or pari passu to that of the Class A Convertible
Preferred Stock with respect to dividend rights, redemption or on liquidation,
dissolution and winding up.
(b) Consent Matters. So long as there are any shares of Class A
Convertible Preferred Stock outstanding, the Company shall not issue or grant,
without the prior written consent of the holders of a majority of the
outstanding shares of Class A Convertible preferred Stock, shares of Common
Stock or Derivative Securities pursuant to any employee or consultant or other
stock option agreement or stock option or stock incentive plan in excess of an
aggregate 500,000 shares.
9. DISTRIBUTION UPON LIQUIDATION, DISSOLUTION OR WINDING UP
--------------------------------------------------------
(a) Liquidation Preferrence. In the event of any liquidation,
dissolution or winding up of the Company, either voluntary or involuntary, and
before any amounts are paid or distributed to the holders of any other equity
securities of the Company, the holders of shares of Class A Convertible
Preferred Stock shall be entitled to receive an amount per share equal to the
sum of (i) the Face Value of the Class A Convertible Preferred Stock (subject to
proportionate adjustment for any stock dividend, stock split, combination of
shares, reorganization, recapitalization, reclassification or other similar
event affecting the Class A Convertible Preferred Stock), plus (ii) an amount
equal to any accrued and unpaid Class A Convertible Preferred Dividends, whether
or not declared (the "Liquidation Payment"). In the event the assets that are
distributable to equity security holders of the Company are not sufficient to
meet the aggregate of the Liquidation Payment payable on all outstanding shares
of Class A Convertible Preferred Stock, then the assets of the Company shall be
distributed pro rata to the holders of Class A Convertible Preferred Stock.
(b) Participation with Common. After payment to the holders of the
Class A Convertible Preferred Stock of the amount set forth above, all remaining
assets and funds of the Company legally available for distribution, if any,
shall be distributed among the holders of Class A Convertible Preferred Stock
and Common Stock (assuming the conversion of the Class A Convertible Preferred
Stock); provided, that the holders of the Class A Convertible Preferred Stock
shall not be entitled to receive on a per share basis greater than three (3)
times the Face Value of the Class A Convertible Preferred Stock (subject to
proportionate adjustment for any stock dividend, stock split, combination,
reorganization, recapitalization, reclassification or other similar event
affecting the Class A Convertible Preferred Stock), plus all accrued and unpaid
dividends and distributions.
(c) Deemed Liquidations. A (1) consolidation or merger of the Company
with or into any other person(s) or entity(ies) (other than a consolidation or
merger in which the Company is the surviving corporation and upon consummation
of which the holders of voting securities of the Company immediately prior to
such transaction continue to own, directly or indirectly, not less than a
<PAGE>
majority of the voting securities of the Company, as the surviving corporation,
immediately following such transaction), (2) sale of all or substantially all of
the assets of the Company, (3) a sale or other disposition of more than 50% of
the voting capital stock (in a single transaction or series of related
transactions) of the Company (whether issued and outstanding, newly issued or
from treasury, or any combination thereof) or (4) other similar transaction,
shall be regarded as a liquidation, dissolution, or winding-up of the affairs of
the Company within the meaning of this Section 9. Notwithstanding the foregoing,
each holder of Class A Convertible Preferred Stock shall have the right to elect
the benefits of the applicable provisions of Section 4(a) hereof in lieu of
receiving payment in liquidation, dissolution, or winding-up of the Company
pursuant to this Section 9; and if the holders of at least a majority of the
outstanding shares of Class A Convertible Preferred Stock shall elect to avail
themselves of the benefits of Section 4(a), such holders may require that the
holders of all outstanding shares of Class A Convertible Preferred Stock shall
be bound by the same election. For purposes of this Section 9 and of Section 4
hereof, a sale (whether in a single transaction or a series of related
transactions) of substantially all of the assets of the Company shall mean the
sale or other disposition, other than in the ordinary course of business, of
more than 50% of such assets, as determined by reference to the fair market
value of the Company.
(d) Non-Cash Distributions. In the event of a liquidation,
dissolution, or winding-up of the Company resulting in the availability of
assets other than cash for distribution to the holders of shares of Class A
Convertible Preferred Stock, the holders of Class A Convertible Preferred Stock
shall be entitled to a distribution of cash and/or other assets equal in value
to the relative liquidation preference and other distribution rights stated in
this Section 9. In the event that such distribution to the holders of shares of
Class A Convertible Preferred Stock shall include any assets other than cash,
the Board of Directors shall determine reasonably and in good faith and with due
care the value of such assets for such purpose, and shall notify all holders of
shares of Class A Convertible Preferred Stock of such determination. The value
of such assets for purposes of the distribution under this Section 9 shall be
the value as so determined by the Board of Directors, unless the holders of a
majority of the outstanding shares of Class A Convertible Preferred Stock shall
object thereto in writing within 15 days after the date of such notice.
(e) Dispute Resolution. In the event of such objection, the valuation
of such assets for purposes of such distribution shall be determined by an
arbitrator mutually agreed upon and selected by the objecting stockholders and
the Board of Directors, or in the event a single arbitrator cannot be agreed
upon within 10 days after the written objection sent by the objecting
stockholders in accordance with subsection (c), the valuation of such assets
shall be determined by an arbitration in which (i) the objecting stockholders
shall name in their notice of objection one arbitrator, (ii) the Board of
Directors shall name a second arbitrator within 15 days from the receipt of such
notice, (iii) the two arbitrators thus selected shall select a third arbitrator
within 15 days thereafter, and (iv) the three arbitrators thus selected shall
determine by majority vote the valuation of such assets within 15 days
thereafter for purposes of such distribution. In the event the third arbitrator
is not selected as provided herein, then such arbitrator shall be selected by
the President of the American Arbitration Association ("AAA"). The costs of such
arbitration shall be borne by the Corporation or by the holders of Preferred
Stock (on a pro rata basis out of the assets otherwise distributable to them) as
follows: (i) if the valuation as determined by the arbitrators is greater than
<PAGE>
90% of the valuation as determined by the Board of Directors, the holders of
Preferred Stock shall pay the costs of the arbitration, and (ii) otherwise, the
Corporation shall bear the costs of the arbitration. The arbitration shall be
held in Boston, Massachusetts, in accordance with the rules of the AAA. The
award made by the arbitrators shall be binding upon the Corporation and the
holders of all shares of Common Stock and Preferred Stock, no appeal may be
taken from such award, and judgment thereon may be entered in any court of
competent jurisdiction.
10. MUTILATED OR MISSING CERTIFICATES.
----------------------------------
If any of the Class A Convertible Preferred Stock certificates shall
be mutilated, lost, stolen or destroyed, the Company shall issue, in exchange
and substitution for and upon cancellation of the mutilated Class A Convertible
Preferred Stock certificate, or in lieu of the and substitution for the Class A
Convertible Preferred Stock certificate lost, stolen or destroyed, a new Class A
Convertible Preferred Stock certificate of like tenor and representing an
equivalent amount of shares of Class A Convertible Preferred Stock, but only
upon receipt of evidence of such loss, theft or destruction of such Class A
Convertible Preferred Stock certificate and indemnity, if requested.
11. REISSUANCE OF CLASS A CONVERTIBLE PREFERRED STOCK.
--------------------------------------------------
Shares of Class A Convertible Preferred Stock that have been issued
and reacquired in any manner, including shares purchased or redeemed or
exchanged, shall (upon compliance with any applicable provisions of the laws of
the State of Florida) have the status of authorized and unissued shares of
Preferred Stock undesignated as to series or class and may be redesignated and
reissued as part of any series or class of Preferred Stock.
12. BUSINESS DAY.
-------------
If any payment, redemption or exchange shall be required by the terms
hereof to be made on a day that is not a business day, such payment, redemption
or exchange shall be made on the immediately succeeding business day.
13. HEADINGS OF SUBDIVISIONS.
-------------------------
The headings of various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the provisions
hereof.
14. SEVERABILITY OF PROVISIONS.
---------------------------
If any right, preference or limitations of the Class A Convertible
Preferred Stock set forth in this Article IV is invalid, unlawful or incapable
of being enforced by reason of any rule or law or public policy, all other
rights, preferences and limitations set forth in this Article IV, which can be
given effect without the invalid, unlawful or unenforceable right, preference or
limitation, shall, nevertheless, remain in full force and effect, and no right,
<PAGE>
preference or limitation herein set forth shall be deemed dependent upon any
other such right, preference or limitation unless so expressed herein.
15. NOTICE TO THE COMPANY.
----------------------
All notices and other communications required or permitted to be given
to the Company hereunder shall be made by courier to the Company at its
principal executive offices (currently located at the following address:
TravelNow.com, Inc., 318 Park Central East, Suite 306, Springfield, Missouri
65806). Minor imperfections in any such notice shall not affect the validity
thereof.
16. LIMITATIONS.
------------
Except as may otherwise be required by law, the shares of Class A
Convertible Preferred Stock shall not have any powers, preferences or relative,
participating, optional or other special rights other than those specifically
set forth in this Article IV (as such resolution may be amended from time to
time) or otherwise in the Articles of Incorporation of the Company.
B. The foregoing amendment shall become effective as of the close of business
on the date these Articles of Amendment are approved by the Florida Department
of State and all filing fees then due have been paid, all in accordance with the
corporation laws of the State of Florida.
C. The amendment recited in Section A above has been duly adopted in
accordance with the provisions of Section 607.1002 of Florida's 1989 Business
Corporation Act, the Board of Directors having adopted a resolution setting
forth such amendment on January 4, 2000.
IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed by Jeffrey A. Wassen, its Co-Chief Executive Officer and attested by J.
Christopher Noble, its Secretary, this 4th day of January, 2000.
Attest: TRAVELNOW.COM, INC.
By: /s/ J. Christopher Noble By: /s/ Jeffrey A. Wasson
- ---------------------------- -------------------------
Name: J. Christopher Noble Name: Jeffrey A. Wasson
Title: Co-Chief Executive Officer and Title: Co-Chief Executive Officer
Secretary
EXHIBIT 3.1
ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION
OF
TRAVELNOW.COM INC.
TRAVELNOW.COM INC., a Florida corporation (the "Company"), does hereby
certify as follows.
A. The Articles of Amendment are hereby Amended by deleting Article IV thereof
in its entirety and replacing such Article IV with the following:
ARTICLE IV
Capital Stock
-------------
The aggregate number of shares of capital stock authorized to be
issued by this Corporation shall be 50,000,000 shares of common stock, no par
value per share (the "Common Stock"), and 25,000,000 shares of preferred stock,
no par value per share (the "Preferred Stock"). Each share of issued and
outstanding Common Stock shall entitle the holder thereof to one vote on each
matter with respect to which shareholders have the right to vote, to fully
participate in all shareholder meetings, and to share ratably in the net assets
of the corporation upon liquidation or dissolution, but each such share shall be
subject to the rights and preferences of the Preferred Stock as hereinafter set
forth.
The Preferred Stock may be issued from time to time in one or more
series in any manner permitted by law, as determined from time to time by the
Board of Directors and stated in any resolution providing for the issuance of
such shares adopted by the Board of Directors pursuant to authority hereby
vested in it, each series to be appropriately designated, prior to the issuance
of any shares thereof, by some distinguishing letter, number or title. All
shares of each series of Preferred Stock shall be alike in every particular and
of equal rank, have the same powers, preferences and rights and be subject to
the same qualifications, limitations and restrictions, without distinction
between the shares of different series thereof, except in regard to the
following particulars, which may differ as to different series:
A. the annual rate of dividends payable and the dates from
which such dividend shall commence to accrue, if at all;
B. the amount payable upon a share redemption and the manner
in which shares of a particular series may be redeemed;
<PAGE>
C. the amount payable upon any voluntary or involuntary
liquidation, dissolution or winding up of the corporation;
D. the provisions of any sinking fund established with
respect to the shares of a series;
E. the terms and rates of conversion or exchange, if shares
of a series are convertible or exchangeable; and
F. the provisions as to voting rights, if any; provided that
the shares of any series of Preferred Stock having voting power shall
not have more than one vote per share.
Before any shares of a particular series of Preferred Stock are
issued, the designations of such series and its terms in respect of the
foregoing particulars shall be fixed and determined by the Board of Directors in
any manner permitted by law and stated in a resolution providing for the
issuance of such shares adopted by the Board of Directors pursuant to authority
hereby vested in it. Such designations and terms shall set forth in full or
summarized on the certificates for such series. The Board of Directors may
increase the number of such shares by providing that any unissued shares of
Preferred Stock shall constitute part of such series, or may decrease (but not
below the number of shares thereof then outstanding) the number of shares of any
series of Preferred Stock already created by providing that any unissued shares
previously assigned to such series shall no longer constitute part thereof. The
Board of Directors is hereby empowered to classify or reclassify any unissued
shares of Preferred Stock by fixing or altering the terms thereof in respect to
the referenced particulars and by assigning the same to an existing or newly
established series from time to time before the issuance of such shares.
The holders of shares of each series shall be entitled to receive, out
of any funds legally available therefor, when and as declared by the Board of
Directors, cash dividends at such rate per annum as shall be fixed by resolution
of the Board of Directors for such series, payable periodically on the dates
fixed by the Board of Directors for the series. Such dividends may be cumulative
or non-cumulative, deemed to accrue from day to day regardless of whether or not
earned or declared and may commence to accrue on each share of Preferred Stock
from such date or dates, and as may be determined and stated by the Board of
Directors prior to the issuance thereof. The corporation shall make dividend
payments ratably upon all outstanding shares of Preferred Stock in proportion to
the amount of dividends thereon to the date of such dividend payment, if any.
As long as any shares of Preferred Stock shall remain outstanding, no
dividend (other than a dividend payable in shares ranking junior to such
Preferred Stock with respect to the payment of dividends or liquidated assets)
shall be declared or paid upon, nor shall any distribution be made or ordered in
respect of, shares of the Common Stock or any other class of shares ranking
junior to the shares of such Preferred Stock as to the payment or dividends of
liquidating assets, nor shall any monies (other than the net proceeds received
from the sale of shares ranking junior to the shares of such Preferred Stock as
to the payment of dividends or liquidating assets) be set aside for or applied
<PAGE>
to the purchase or redemption (through a sinking fund or otherwise) of shares of
the Common Stock or of any other class of shares ranking junior to the shares of
such Preferred Stock as to dividends or assets unless:
(a) all dividends on the shares of Preferred Stock of all
series for past dividend periods shall have been paid and the full
dividend on all outstanding shares of Preferred Stock of all series
for the then current dividend period shall have been paid or declared
and set apart for payment; and
(b) the corporation shall have set aside all amounts, if
any, required to be set aside as and for sinking funds, if any, for
the shares of Preferred Stock of all series for the then current year,
and all defaults, if any, in complying with any such sinking fund
requirements in respect of previous years shall have been cured.
The corporation, at the option of the Board of Directors, may at any
time redeem the whole, or from time to time any part, of any series of Preferred
Stock, subject to such limitations as may be adopted by the Board authorizing
the issuance of such shares, by paying therefor in cash the amount which shall
have been determined by the Board of Directors, in the resolution authorizing
such series, to be payable upon the redemption of such shares at such time.
Redemption may be made of the whole or any part of the outstanding shares of any
one or more series, in the discretion of the Board of Directors; but if the
redemption shall be effected only with respect to a part of a series, the shares
to be redeemed may be selected by lot, or all of the shares of such series may
be redeemed pro rata, in such manner as may be prescribed by resolution of the
Board of Directors.
Subject to the foregoing provisions and to any qualifications,
limitations, or restrictions applicable to any particular series of Preferred
Stock which may be stated in the resolution providing for the issuance of such
series, the Board of Directors shall have authority to prescribe from time to
time the manner in which any series of Preferred Stock shall be redeemed.
Upon any liquidation, dissolution or winding up of the corporation,
whether voluntary or involuntary, the shares of Preferred Stock of each series
shall be entitled, before any distribution shall be made with respect to shares
of Common Stock or to any other class of shares junior to the shares of
Preferred Stock as to the payment of dividends or liquidating assets, to be paid
the full preferential amount fixed by the Board of Directors for such series as
herein authorized. If upon such liquidation or dissolution of the corporation,
whether voluntary or involuntary, the net assets of the corporation shall be
insufficient to permit the payment to all outstanding shares of Preferred Stock
of all series of the full preferential amounts to which they are respectively
entitled, the entire net assets of the corporation shall be distributed ratably
to all outstanding shares of Preferred Stock in proportion to the full
preferential amount to which each such share is entitled.
1. DESIGNATION
-----------
Pursuant to this Article IV, the Board of Directors has authorizes the
issuance of a series of Preferred Stock to be designated as "Class A Convertible
<PAGE>
Preferred Stock." The number of shares constituting such series shall be Five
Hundred Thousand which shall have no par value.
2. RANK
----
The Class A Convertible Preferred shall rank senior to all other
classes or series of common and preferred stock of the Company with respect to
dividend rights, redemption and on liquidation, dissolution and winding-up.
3. DIVIDENDS
---------
The Class A Convertible Preferred shall have a face value equal to
Nine Dollars ($9.00) (the "Face Value") per share and shall bear dividends at
eight percent (8%) per annum per share on the face value (the "Class A
Convertible Preferred Dividend"). Class A Convertible Preferred Dividends shall
be paid only as and when declared by the Board of Directors and shall accrue if
not declared and paid, and shall be payable in preference and priority to any
payment of any dividend on any other class or series of capital stock, including
all other classes or series of common and preferred stock of the Company. If at
any time the Company pays less than the total amount of Class A Convertible
Preferred Dividends accrued and payable with respect to all shares of Class A
Convertible Preferred Stock, such payment of Class A Convertible Preferred
Dividends shall be paid to the holders of Class A Convertible Preferred Stock
pro rata, in proportion to the number of shares of Class A Convertible Preferred
Stock held by each such holder. In the event of conversion pursuant to Section 4
below, each holder of Class A Convertible Preferred Stock may elect to receive
the then accrued and unpaid Class A Convertible Preferred Dividends in cash or
in shares of Common Stock pursuant to the provisions of Section 4 below.
4. CONVERSION
----------
The holders of shares of Class A Convertible Preferred Stock shall be
entitled to convert such shares of Class A Convertible Preferred Stock into
shares of Common Stock or other securities, properties, or rights, as set forth
in this Section 4.
(a) Holders' Option to Convert. Subject to and in compliance with the
provisions of this Section 4 and Section 5 below (to the extent applicable) and
Section 9(c) below, the holder of any shares of Class A Convertible Preferred
Stock (including those shares of Class A Convertible Preferred Stock for which a
Redemption Notice (as defined in Section 6(g) below) has been delivered to the
Company but which shares have not yet been redeemed) may, at any time, at the
option of the holder, convert shares of Class A Convertible Preferred Stock into
fully paid and non-assessable shares of Common Stock.
(i) The number of shares of Common Stock to which a holder
of Class A Convertible Preferred Stock shall be entitled upon such
conversion shall be equal to the product obtained by multiplying (A)
the number of shares of Class A Convertible Preferred Stock being
converted by (B) the Applicable Conversion Rate (determined as
provided in Section 4(c) hereof).
<PAGE>
(ii) To exercise conversion rights under this Section 4(a),
a holder of Class A Convertible Preferred Stock to be so converted
shall give written notice to the Company at its principal office that
such holder elects to convert such shares. Such notice shall also
state the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock issuable upon
such conversion shall be issued. The certificate or certificates for
shares of Class A Convertible Preferred Stock surrendered for
conversion shall be accompanied by evidence of proper assignment
thereof to the Company. The date when such written notice is received
by the Company together with the certificate or certificates
representing the shares of Class A Convertible Preferred Stock being
converted, shall be the applicable "Conversion Date." As promptly as
practicable after the applicable Conversion Date, the Company shall
issue and shall deliver to the holder of the shares of Class A
Convertible Preferred Stock being converted, a certificate or
certificates in such denominations as such holder may request in
writing for the number of full shares of Common Stock issuable upon
the conversion of such shares of Class A Convertible Preferred Stock
in accordance with the provisions of this Section 4, plus cash as
provided in Section 5(f) below in respect of any fraction of a share
of Common Stock issuable upon such conversion. Such conversion shall
be deemed to have been effected immediately prior to the close of
business on the applicable Conversion Date, and at such time the
rights of the holder as holder of the converted shares of Class A
Convertible Preferred Stock shall cease and the person or persons in
whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of shares of Common Stock
represented thereby.
(b) Automatic Conversion.
(i) Qualified Public Offering. Each share of Class A
Convertible Preferred Stock outstanding (including those shares for
which a Redemption Notice (as defined below) has been delivered to the
Company but which shares have not yet been redeemed) shall be
converted into the number of fully paid and non-assessable shares of
Common Stock into which each such share is then convertible pursuant
to Section 4(a)(i) hereof, automatically and without further action,
immediately upon the fulfillment of both of the following conditions:
(A) the effectiveness of a registration statement filed by the Company
with the Securities and Exchange Commission covering an amount of the
Common Stock sufficient to allow for the sale of all Common Stock
issuable upon conversion of all then outstanding shares of Class A
Convertible Preferred Stock; and (B) shares of the Common Stock of the
Company are listed on either the Nasdaq Small Cap Market or the Nasdaq
National Market System.
(ii) Mechanics of Automatic Conversion. Upon any automatic
conversion of shares of Class A Convertible Preferred Stock into
shares of Common Stock pursuant to this Section 4(b), the holders of
such converted shares shall surrender the certificates formerly
representing such shares at the office of the Company or of any
transfer agent for Common Stock. Thereupon, there shall be issued and
delivered to each such holder, promptly at such office and in his name
as shown on such surrendered certificate or certificates, a
<PAGE>
certificate or certificates for the number of shares of Common Stock
into which such shares of Class A Convertible Preferred Stock were so
converted and cash as provided in Section 5(f) below in respect of any
fraction of a share of Common Stock issuable upon such conversion. The
Company shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon such conversion unless and until
certificates formerly evidencing the converted shares of Class A
Convertible Preferred Stock are either delivered to the Company or its
transfer agent, as hereafter provided, or the holder thereof notifies
the Company or such transfer agent that such certificates have been
lost, or destroyed and executes and delivers an agreement to indemnify
the Company from any loss incurred by it in connection therewith.
(c) Applicable Conversion Rate. The conversion rate (the "Applicable
Conversion Rate") in effect at any time for the Class A Convertible Preferred
Stock shall be equal to the quotient obtained by dividing (A) the sum of $9.00
(subject to proportionate adjustment for any stock dividend, stock split,
combination of shares, reorganization, recapitalization, reclassification or
other similar event affecting the Class A Convertible Preferred Stock occurring
after the date of filing of this Amendment to the Articles of Incorporation of
the Company) plus an amount equal to all accrued but unpaid dividends on a share
of Class A Convertible Preferred Stock (assuming the holder of such shares being
converted has elected to have such dividends converted to shares of Common Stock
rather than receiving cash therefor) by (B) the Applicable Conversion Value then
in effect, calculated as hereinafter provided.
(d) Applicable Conversion Values. The "Applicable Conversion Value" in
effect for the Class A Convertible Preferred Stock initially, and until first
(and subsequently) adjusted in accordance with Section 5 hereof shall be $9.00.
5. ADJUSTMENTS TO CONVERSION RATE
------------------------------
(a) Adjustments for Extraordinary Common Stock Events. Upon the
happening of an Extraordinary Common Stock Event (as defined in Section 5(i)
hereof), automatically and without further action, and simultaneously with the
happening of such Extraordinary Common Stock Event, the Applicable Conversion
Value in effect immediately prior to such Extraordinary Common Stock Event shall
be adjusted by multiplying such then effective Applicable Conversion Value by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding (excluding treasury stock) immediately before such Extraordinary
Common Stock Event and the denominator of which shall be the number of shares of
Common Stock outstanding (excluding treasury stock) immediately after such
Extraordinary Common Stock Event, and the product so obtained shall thereafter
be the Applicable Conversion Value. The Applicable Conversion Value, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive Extraordinary Common Stock Event or Events.
<PAGE>
(b) Adjustments for Dilutive Issues.
(i) Except as otherwise provided below in this Section
5(b)(i), and except with respect to an Extraordinary Common Stock
Event, adjustments in respect of which are provided for in Section
5(a), if at any time while there are any shares of Class A Convertible
Preferred Stock outstanding, the Company issues or is deemed to issue
(as determined pursuant to Section 5(b)(ii) below) any additional
shares of Common Stock at a Net Consideration Per Share (as
hereinafter defined) less than the Applicable Conversion Value in
respect of the Class A Convertible Preferred Stock in effect
immediately prior to such issuance or deemed issuance, then and in
each such case, such Applicable Conversion Value for the Class A
Convertible Preferred Stock will be reduced as follows:
(A) If such issuance and/or deemed issuance occurs
after the date of this Amendment to the Articles of
Incorporation of the Company but on or before January 4,
2002, then the Applicable Conversion Value for the Class A
Convertible Preferred Stock will be adjusted to equal the
Net Consideration Per Share (as hereinafter defined) at
which such additional shares of Common Stock are issued
and/or deemed issued.
(B) If such issuance and/or deemed issuance occurs
after January 4, 2002, then the Applicable Conversion Value
for the Class A Convertible Preferred Stock will be adjusted
to equal the result of the following formula:
New Applicable Conversion Value = (P1 x Q1) + (P2 x Q2)
---------------------
(Q1 + Q2)
where:
P1 = the Applicable Conversion Value in effect immediately prior to such
issuance or deemed issuance of additional shares of Common Stock;
Q1 = the aggregate number of shares of Common Stock outstanding (including
shares of Common Stock issuable upon conversion of all outstanding shares of
Class A Convertible Preferred Stock and the conversion, exchange and/or exercise
of all outstanding warrants, options and other convertible securities, each to
the extent then convertible, exchangeable and/or exercisable) immediately prior
to such issuance or deemed issuance of additional shares of Common Stock;
P2 = the Net Consideration Per Share (as hereinafter defined) received by the
Company for the shares of Common Stock issued and/or deemed issued in respect of
such issuance of additional shares of Common Stock; and
Q2 = the number of shares of Common Stock issued and/or deemed issued in respect
of such issuance of additional shares of Common Stock.
<PAGE>
The issuance of shares of Common Stock upon conversion of the
outstanding shares of Class A Convertible Preferred Stock shall not be deemed to
be issuances of additional shares of Common Stock for the purposes of this
Section 5(b).
The issuance of up to an aggregate of 500,000 shares of Common Stock
or Derivative Securities (as defined in Section 5(i)) pursuant to the terms of
any employee stock option agreement or employee stock incentive or stock option
plan duly adopted by the Board of Directors of the Company issued or granted
after the date of the filing of this Amendment to the Articles of Incorporation
shall not be deemed to be issuances of additional shares of Common Stock for
purposes of this Section 5(b).
For purposes of this Section 5(b), if a part or all of the
consideration received by the Company in connection with the issuance or deemed
issuance of shares of Common Stock or the issuance or deemed issuance of any of
the securities described below in paragraph (ii) of this Section 5(b) consists
of property other than cash, such consideration shall be deemed to have the same
value as is recorded on the books of the Company with respect to receipt of such
property so long as such recorded value was determined reasonably and in good
faith and with due care by the Board of Directors of the Company, and shall
otherwise be deemed to have a value equal to its fair market value.
The Applicable Conversion Value, as so reduced, shall be further
reduced in the same manner upon the happening of any successive event or events
that cause reduction under this Section 5(b)(i).
(ii) For purposes of this Section 5(b), the issuance of any
Derivative Securities shall be deemed an issuance of shares of Common
Stock with respect to Section 5(b)(i)(A) and with respect to Section
5(b)(i)(B) if the Net Consideration Per Share (as defined in Section
5(b)(ii)(A) and (B) hereof) that may be received by the Company for
such Common Stock is less than the Applicable Conversion Value in
effect immediately prior to the time of such issuance, and except as
hereinafter provided, an adjustment in the Applicable Conversion Value
shall be made upon each such issuance of Derivative Securities in the
manner provided in Section 5(b)(i)(A) and (B), as appropriate, as if
such deemed Common Stock were issued for such Net Consideration Per
Share. No adjustment of the Applicable Conversion Value shall be made
under this Section 5(b) upon the issuance of any additional shares of
Common Stock that are issued upon the exercise, conversion, or
exchange of any Derivative Securities if any such adjustment was
previously made upon the issuance of such Derivative Securities. Any
adjustment of the Applicable Conversion Value with respect to this
Section 5(b)(ii) shall be disregarded if, as, and to the extent that
the Derivative Securities that gave rise to such adjustment expire or
are canceled without having been exercised, so that the Applicable
Conversion Value effective immediately upon such cancellation or
expiration shall be equal to the Applicable Conversion Value that
otherwise would have been in effect immediately prior to the time of
the issuance of the expired or canceled Derivative Securities, with
such additional adjustments as subsequently would have been made to
that Applicable Conversion Value had the expired or canceled
<PAGE>
Derivative Securities not been issued. In the event that the terms of
any Derivative Securities previously issued by the Company are changed
(whether by their terms or for any other reason, including without
limitation, as a result of the effects of any anti-dilution
adjustments contained therein) so as to lower the Net Consideration
Per Share payable with respect thereto (whether or not the issuance of
such Derivative Securities originally gave rise to an adjustment of
the Applicable Conversion Value), the Applicable Conversion Value
shall be recomputed as of the date of such change, so that the
Applicable Conversion Value effective immediately upon such change
shall be equal to the Applicable Conversion Value in effect at the
time of the issuance of the Derivative Securities subject to such
change, adjusted for the issuance thereof in accordance with the terms
thereof after giving effect to such change, and with such additional
adjustments as subsequently would have been made to that Applicable
Conversion Value had the Derivative Securities been issued on such
changed terms. For purposes of this Section 5(b), the Net
Consideration Per Share that may be received by the Company shall be
determined as follows:
(A) "Net Consideration Per Share" shall mean the
amount equal to the total amount of consideration, if any,
received by the Company for the issuance of such Derivative
Securities or Common Stock, as the case may be, plus, in the
case of Derivative Securities, the minimum amount of
additional consideration, if any, payable to the Company
upon exercise, conversion, and/or exchange thereof for
shares of Common Stock, divided by the number of shares of
Common Stock issued or the maximum number of shares of
Common Stock that would be issued if all such Derivative
Securities were exercised or converted, as the case may be.
(B) The Net Consideration Per Share that may be
received by the Company shall be determined in each instance
as of the date of issuance of Derivative Securities or
Common Stock, as the case may be, without giving effect to
any possible future price adjustments or rate adjustments
that may be applicable with respect to such Derivative
Securities and which are contingent upon future events;
provided, that in the case of an adjustment to be made as a
result of a change in terms of such Derivative Securities,
including such changes as may result from the effects of any
anti-dilution adjustments contained therein, the Net
Consideration Per Share shall be determined as of the date
of such change.
(c) Adjustments for Reclassifications. If the Common Stock issuable
upon the conversion of the Class A Convertible Preferred Stock shall be changed
into the same or a different number of shares of any class(es) or series of
stock, whether by reclassification or otherwise (other than an Extraordinary
Common Stock Event or a reorganization, merger, consolidation, or sale of assets
provided for elsewhere in this Section 5), then and in each such event the
holder of each share of Class A Convertible Preferred Stock shall have the right
thereafter to convert such share into the kind and amount of shares of stock and
other securities and property receivable upon such reclassification or other
change by holders of the number of shares of Common Stock into which such shares
of Class A Convertible Preferred Stock might have been converted immediately
prior to such, reclassification, or change, all subject to further adjustment as
provided herein.
<PAGE>
(d) Adjustments for Reorganizations. Except as provided in the
following paragraph, in the event that there shall be a capital reorganization
of Common Stock (other than a subdivision, combination of shares,
reclassification, or exchange of shares provided for elsewhere in this Section
5) or a merger or consolidation of the Company with or into another company, or
the sale of all or substantially all of the Company's assets or sale of more
than 50% of the voting capital stock (in a single transaction or series of
related transactions) of the Company (whether issued and outstanding, newly
issued or from treasury, or any combination thereof) to any other person, then,
as a part of and as a condition to the effectiveness of such reorganization,
merger, consolidation, or sale, lawful and adequate provision shall be made so
that if the Company is not in economic effect the surviving company, each share
of Class A Convertible Preferred Stock shall be converted into a share of
capital stock of the surviving company having equivalent preferences, rights,
and privileges, except that in lieu of being able to convert into shares of
Common Stock of the Company or the successor company, the holders of shares of
Class A Convertible Preferred Stock (including any such capital stock issued
upon conversion of the Class A Convertible Preferred Stock) shall thereafter be
entitled to receive upon conversion of such Class A Convertible Preferred Stock
(including any such capital stock issued upon conversion of Class A Convertible
Preferred Stock) the number of shares of stock or other securities or property
of the Company or of the successor company resulting from such merger or
consolidation or sale, to which a holder of the number of shares of Common Stock
deliverable upon conversion of such share of Class A Convertible Preferred Stock
immediately prior to the capital reorganization, merger, consolidation, or sale
would have been entitled on such capital reorganization, merger, consolidation,
or sale. In any such case, appropriate provisions shall be made with respect to
the rights of the holders of Class A Convertible Preferred Stock (including any
such capital stock issued upon conversion of Class A Convertible Preferred
Stock) after the reorganization, merger, consolidation, or sale to the end that
the provisions of this Section 5 (including without limitation provisions for
adjustment of the Applicable Conversion Values and the number of shares issuable
upon conversion of Class A Convertible Preferred Stock or such capital stock)
shall thereafter be applicable, as nearly as may be, with respect to any shares
of stock, securities, or assets to be deliverable thereafter upon the conversion
of such Class A Convertible Preferred Stock or such capital stock.
Upon the occurrence of a capital reorganization, merger, or
consolidation of the Company or the sale of all or substantially all its assets
or sale or other disposition of more than 50% of the voting capital stock (in a
single transaction or series of related transactions) of the Company (whether
issued and outstanding, newly issued or from treasury, or any combination
thereof), as such events are more fully set forth in the first paragraph of this
Section 5(d), holders of a majority of the outstanding shares of Class A
Convertible Preferred Stock may elect treatment of their shares of Class A
Convertible Preferred Stock under Section 9(c) hereof, in lieu of treatment
pursuant to this Section 5(d) notice of which election shall be submitted in
writing to the Company at its principal offices no later than 10 days before the
effective date of such event, provided, that any such notice shall be effective
if given not later than 15 days after the date of the Company's notice, with
respect to such event, and if the holders of the majority of the outstanding
shares of Class A Convertible Preferred Stock shall elect treatment of their
shares of Class A Convertible Preferred Stock under Section 9(c) hereof, then
all holders of Class A Convertible Preferred Stock shall be bound by such
election. Subject to the provisions of Section 9(c) hereof, a holder who fails
<PAGE>
to give such notice of election pursuant to this Section 5(d) shall be deemed to
have elected treatment under this Section 5(d) in lieu of treatment under
Section 9(c).
(e) Certificate as to Adjustments. In each case of an adjustment or
readjustment of the Applicable Conversion Rate, the Company will promptly
furnish each holder of Class A Convertible Preferred Stock with a certificate,
prepared by the chief financial officer of the Company, showing such adjustment
or readjustment, and stating in detail the facts upon which such adjustment or
readjustment is based.
(f) Fractional Shares. No fractional shares of Common Stock or scrip
representing fractional shares shall be issued upon conversion of shares of
Class A Convertible Preferred Stock. Instead of any fractional shares of Common
Stock that would otherwise be issuable upon conversion of shares of Class A
Convertible Preferred Stock, the Company shall pay to the holder of the shares
of Class A Convertible Preferred Stock that were converted a cash adjustment in
respect of such fraction in an amount equal to the same fraction of the market
price per share of Common Stock (as determined in a manner reasonably prescribed
by the Board of Directors) at the close of business on the applicable Conversion
Date.
(g) Partial Conversion. In the event some but not all of the shares of
Class A Convertible Preferred Stock represented by a certificate or certificates
surrendered by a holder are converted, the Company shall execute and deliver to
or on the order of the holder, at the expense of the Company, a new certificate
representing the number of shares of Class A Convertible Preferred Stock that
were not converted.
(h) Reservation of Common Stock. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of shares of Class A
Convertible Preferred Stock, such number of shares of Common Stock as shall from
time to time be sufficient to effect the conversion of all outstanding shares of
Class A Convertible Preferred Stock, and if at any time the number of authorized
but unissued shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of Class A Convertible Preferred
Stock, then the Company shall take such corporate action as may, in the opinion
of its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.
(i) Extraordinary Common Stock Event. As used herein, "Extraordinary
Common Stock Event" means (i) the issuance of additional shares of Common Stock
or any Derivative Security as a dividend or other distribution on outstanding
Common Stock or any Derivative Security, (ii) the subdivision of outstanding
shares of Common Stock or any Derivative Security into a greater number of
shares of Common Stock or any Derivative Security, or (iii) the combination of
outstanding shares of Common Stock or any Derivative Security into a smaller
number of shares of Common Stock or any Derivative Security.
(j) Derivative Securities. As used herein, "Derivative Securities"
means (i) all shares of stock and other securities that are convertible into or
<PAGE>
exchangeable for shares of Common Stock and (ii) all options, warrants, and
other rights to acquire shares of Common Stock or securities convertible into or
exchangeable for shares of Common Stock.
(k) Further Adjustment Provisions. In the event that, at any time as a
result of an adjustment made pursuant to this Section 5, the holder of any
shares of Class A Convertible Preferred Stock upon thereafter surrendering such
shares for conversion shall become entitled to receive any shares or other
securities of the Company other than shares of Common Stock, the Applicable
Conversion Rate in respect of such other shares or securities so receivable upon
conversion of shares of Class A Convertible Preferred Stock shall thereafter be
adjusted, and shall be subject to further adjustment from time to time, in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to Class A Convertible Preferred Stock contained in this Section 5, and
the remaining provisions hereof with respect to Class A Convertible Preferred
Stock shall apply on like or similar terms to any such other shares or
securities.
6. REDEMPTION
----------
(a) Redemption Right. If on or prior to December 31, 2000 (A) a
registration statement covering a sufficient amount of the Company's Common
Stock to allow for the conversion of the then outstanding shares of Class A
Convertible Preferred Stock is not declared by the Securities and Exchange
Commission to be effective and (B) shares of the Common Stock of the Company are
not listed on either the Nasdaq SmallCap Market or the Nasdaq National Market
System, then each holder of shares of Class A Convertible Preferred Stock shall
have the right, (the "Redemption Right"), but not the obligation, to sell all,
but not less than all, of its shares of Class A Convertible Preferred Stock to
the Company for an amount of cash equal to the greater of the sum of (i) the
Face Value thereof (subject to proportionate adjustment in the event of any
stock dividend, stock split, combination of shares, reorganization,
recapitalization, reclassification or other similar event affecting the Class A
Convertible Preferred Stock) plus any accrued and unpaid dividends thereon and
(ii) the then current fair market value per share of Class A Convertible
Preferred Stock, based on a valuation of the Company as finally determined in
accordance with Sections (b)-(d) below as of the applicable Redemption Date (the
"Redemption Price"). Each holder of shares of Class A Convertible Preferred
Stock may make redemption of such shares as follows: (i) between January 1, 2001
and March 31, 2001 (and inclusive of both such dates); or (ii) between January
1, 2002 and March 31, 2002 (and inclusive of both such dates). Under no
circumstances shall the Redemption Right remain valid after March 31, 2002.
(b) Fair Market Value. Promptly upon receipt of a Redemption Notice as
defined in Section 6(g) below, the Company and the holders of a majority of the
shares of Class A Convertible Preferred Stock shall mutually agree on the
valuation of the Company. In the event such an agreement cannot be reached
within fifteen (15) days after delivery of a Redemption Notice, the Company
shall retain a nationally recognized, reputable investment banking firm
reasonably acceptable to the holders of a majority of the shares of Class A
Convertible Preferred Stock, the cost of which shall be split evenly between the
Company and the holders of Class A Convertible Preferred Stock (pro rata in
proportion to the relative number of shares held by each of them). As promptly
as is practicable, such investment banking firm shall deliver to the Company a
<PAGE>
written report as to the fair market value of the Company as a whole, on a
going-concern basis, using customary and appropriate valuation methods, as of
the date of the most recent audited financial statements of the Company (and not
taking into account any discount for minority ownership or restrictions on
transfer of the capital stock of the Company); provided, that if such date is
more than six months prior to the Redemption Notice Date, then another audit as
of the most recent practicable date shall be conducted and used for such
purpose, and the out-of-pocket expenses of such audit shall be paid by the
Company. Upon receipt of such report, the Company shall promptly send a copy
thereof to each holder of Class A Convertible Preferred Stock.
(c) First Valuation. The valuation set forth in such report (the
"First Valuation") shall be conclusive and binding on the Company and each
holder of Class A Convertible Preferred Stock unless within 14 days after
receipt of such report, the holders of a majority of the outstanding shares of
Class A Convertible Preferred Stock notify the Company in writing that they
disagree with such valuation. If such stockholders do so notify the Company,
they shall promptly engage another nationally recognized, reputable investment
banking firm, at the expense of the holders of Class A Convertible Preferred
Stock, pro rata in proportion to the relative number of shares held by each of
them, to render another written report as to the fair market value of the
Company (but without regard to any discount for minority ownership or
restrictions on transfer of the capital stock of the Company) as of the
appropriate valuation date, a copy of which shall be promptly delivered to the
Company.
(d) Second and Third Valuations. If the Company does not agree with
the valuation of the Company set forth in the second investment banking firm's
report (the "Second Valuation"), then either (i) the Company and the holders of
a majority of the outstanding shares of Class A Convertible Preferred Stock
shall agree on the fair market value or (ii) in the absence of such agreement,
the redemption price shall be the arithmetic average of the First Valuation and
the Second Valuation, unless, the difference between the First Valuation and
Second Valuation is greater than an amount equal to 5% of the higher of the two
valuations, in which case a third investment banking firm shall be appointed by
the two prior investment banking firms to render a written report as to fair
market value (but without regard to any discount for minority ownership or
restrictions on transfer of the capital stock of the Company), the cost of which
shall be split between the Company and the holders of Class A Convertible
Preferred Stock (pro rata among them in proportion to the relative number of
shares held by each of them) equally, and the fair market value shall be equal
to the arithmetic average of the two (2) closest valuations, unless the third
valuation equals the arithmetic average of the First Valuation and the Second
Valuation, in which case the fair market value shall be equal to the third
valuation.
(e) Insufficient Funds. If the Company on any Redemption Date does not
have sufficient funds legally available to redeem the shares of Class A
Convertible Preferred Stock for which redemption is required pursuant to this
Section 6, then it shall, prior to redeeming any other series or class of the
Company's preferred stock or common stock, to the maximum lawful extent redeem
such shares of Class A Convertible Preferred Stock on a pro rata basis among the
holders of Class A Convertible Preferred in proportion to the number of shares
<PAGE>
of Class A Convertible Preferred Stock held by each of them, and shall redeem
the remaining shares of Class A Convertible Preferred Stock to be redeemed as
soon as sufficient funds are legally available.
(f) Ranking. At no time shall the Company redeem shares of any other
class or series common or preferred stock of the Company or pay the applicable
redemption price for or make any distribution, dividend or payment on shares of
any other class or series of common or preferred stock of the Company to holders
of such other class or series of common or preferred stock so long as any shares
of Class A Convertible Preferred Stock are outstanding and have not been
redeemed.
(g) Mechanics of Redemption. Before the holder of shares of Class A
Convertible Preferred Stock may exercise its Redemption Right, such holder shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the Company and shall give written notice (a "Redemption Notice") to the
Company at such office that such holder elects to sell such shares of Class A
Convertible Preferred to the Company at the Redemption Price. The Company shall
immediately upon receipt of such certificates and Redemption Notice pay to such
holder by check or wire transfer the Redemption Price.
7. PREEMPTIVE RIGHTS
-----------------
(a) Preemption Notice. If the Company desires to issue shares of
Common Stock or Derivative Securities after January 4, 2000, excluding the
issuance of up to an aggregate of 500,000 shares of Common Stock or Derivative
Securities pursuant to the terms of any employee stock option agreement or
employee stock option or stock incentive plan duly adopted by the Board of
Directors of the Company issued or granted after the date of the filing of this
Amendment to the Articles of Organization, (the "Preemption Offering"), the
Company shall first notify, in writing, all holders of shares of Class A
Convertible Preferred Stock of such issuance (the "Preemption Notice"). The
Preemption Notice shall state the number of shares of Common Stock or Derivative
Securities to be offered and the offer price per share (the "Offer Price").
(b) Preemptive Right. Upon receipt of the Preemption Notice, a holder
of shares of Class A Convertible Preferred Stock shall have the right but not
the obligation prior to the closing of any Preemption Offering to purchase from
the Company, at the Offer Price, up to a number of shares of Common Stock as
would be equal to the quotient obtained by dividing (A) the number of shares of
Common Stock held by such holder (assuming the conversion of all shares of Class
A Convertible Preferred Stock and all other Derivative Securities then held by
such holder) by (B) the aggregate number of shares of Common Stock of the
Company outstanding including shares of Common Stock issuable upon the
conversion, exchange and for exercise of all outstanding Derivative Securities
including the Class A Convertible Preferred Stock (the "Preemptive Right").
8. VOTING RIGHTS
-------------
(a) Voting Rights. Except as otherwise required by law, the holders of
the Class A Convertible Preferred Stock shall be entitled to vote (on an
as-converted basis) on all matters submitted to the Company's shareholders for
decision at any annual or special meeting of the shareholders of the Company,
<PAGE>
including the election of directors. Each share of Class A Convertible Preferred
Stock shall entitle the holder thereof to such number of votes per share as
shall equal the number of shares of Common Stock into which such share of Class
A Convertible Preferred Stock is then convertible pursuant to the applicable
provisions of Section 4(a) hereof as of the record date for the determination of
stockholders entitled to vote on such matter, or if no record date is
established, at the date such vote is taken or any written consent of
stockholders is solicited (if permitted by the Company's Articles of
Incorporation and By-laws). The holder of shares of Class A Convertible
Preferred Stock and the holders of Common Stock shall vote together as a single
class on all matters submitted to a vote or consent of stockholders. The holders
of the Class A Convertible Preferred Stock shall not have the right to limit the
creation of additional classes or series of Preferred Stock or other equity
securities of the Company, provided, however, that no such additional class or
series shall rank senior or pari passu to that of the Class A Convertible
Preferred Stock with respect to dividend rights, redemption or on liquidation,
dissolution and winding up.
(b) Consent Matters. So long as there are any shares of Class A
Convertible Preferred Stock outstanding, the Company shall not issue or grant,
without the prior written consent of the holders of a majority of the
outstanding shares of Class A Convertible preferred Stock, shares of Common
Stock or Derivative Securities pursuant to any employee or consultant or other
stock option agreement or stock option or stock incentive plan in excess of an
aggregate 500,000 shares.
9. DISTRIBUTION UPON LIQUIDATION, DISSOLUTION OR WINDING UP
--------------------------------------------------------
(a) Liquidation Preference. In the event of any liquidation,
dissolution or winding up of the Company, either voluntary or involuntary, and
before any amounts are paid or distributed to the holders of any other equity
securities of the Company, the holders of shares of Class A Convertible
Preferred Stock shall be entitled to receive an amount per share equal to the
sum of (i) the Face Value of the Class A Convertible Preferred Stock (subject to
proportionate adjustment for any stock dividend, stock split, combination of
shares, reorganization, recapitalization, reclassification or other similar
event affecting the Class A Convertible Preferred Stock), plus (ii) an amount
equal to any accrued and unpaid Class A Convertible Preferred Dividends, whether
or not declared (the "Liquidation Payment"). In the event the assets that are
distributable to equity security holders of the Company are not sufficient to
meet the aggregate of the Liquidation Payment payable on all outstanding shares
of Class A Convertible Preferred Stock, then the assets of the Company shall be
distributed pro rata to the holders of Class A Convertible Preferred Stock.
(b) Participation with Common. After payment to the holders of the
Class A Convertible Preferred Stock of the amount set forth above, all remaining
assets and funds of the Company legally available for distribution, if any,
shall be distributed among the holders of Class A Convertible Preferred Stock
and Common Stock (assuming the conversion of the Class A Convertible Preferred
Stock); provided, that the holders of the Class A Convertible Preferred Stock
shall not be entitled to receive on a per share basis greater than three (3)
times the Face Value of the Class A Convertible Preferred Stock (subject to
proportionate adjustment for any stock dividend, stock split, combination,
reorganization, recapitalization, reclassification or other similar event
<PAGE>
affecting the Class A Convertible Preferred Stock), plus all accrued and unpaid
dividends and distributions.
(c) Deemed Liquidations. A (1) consolidation or merger of the Company
with or into any other person(s) or entity(ies) (other than a consolidation or
merger in which the Company is the surviving corporation and upon consummation
of which the holders of voting securities of the Company immediately prior to
such transaction continue to own, directly or indirectly, not less than a
majority of the voting securities of the Company, as the surviving corporation,
immediately following such transaction), (2) sale of all or substantially all of
the assets of the Company, (3) a sale or other disposition of more than 50% of
the voting capital stock (in a single transaction or series of related
transactions) of the Company (whether issued and outstanding, newly issued or
from treasury, or any combination thereof) or (4) other similar transaction,
shall be regarded as a liquidation, dissolution, or winding-up of the affairs of
the Company within the meaning of this Section 9. Notwithstanding the foregoing,
each holder of Class A Convertible Preferred Stock shall have the right to elect
the benefits of the applicable provisions of Section 4(a) hereof in lieu of
receiving payment in liquidation, dissolution, or winding-up of the Company
pursuant to this Section 9; and if the holders of at least a majority of the
outstanding shares of Class A Convertible Preferred Stock shall elect to avail
themselves of the benefits of Section 4(a), such holders may require that the
holders of all outstanding shares of Class A Convertible Preferred Stock shall
be bound by the same election. For purposes of this Section 9 and of Section 4
hereof, a sale (whether in a single transaction or a series of related
transactions) of substantially all of the assets of the Company shall mean the
sale or other disposition, other than in the ordinary course of business, of
more than 50% of such assets, as determined by reference to the fair market
value of the Company.
(d) Non-Cash Distributions. In the event of a liquidation,
dissolution, or winding-up of the Company resulting in the availability of
assets other than cash for distribution to the holders of shares of Class A
Convertible Preferred Stock, the holders of Class A Convertible Preferred Stock
shall be entitled to a distribution of cash and/or other assets equal in value
to the relative liquidation preference and other distribution rights stated in
this Section 9. In the event that such distribution to the holders of shares of
Class A Convertible Preferred Stock shall include any assets other than cash,
the Board of Directors shall determine reasonably and in good faith and with due
care the value of such assets for such purpose, and shall notify all holders of
shares of Class A Convertible Preferred Stock of such determination. The value
of such assets for purposes of the distribution under this Section 9 shall be
the value as so determined by the Board of Directors, unless the holders of a
majority of the outstanding shares of Class A Convertible Preferred Stock shall
object thereto in writing within 15 days after the date of such notice.
(e) Dispute Resolution. In the event of such objection, the valuation
of such assets for purposes of such distribution shall be determined by an
arbitrator mutually agreed upon and selected by the objecting stockholders and
the Board of Directors, or in the event a single arbitrator cannot be agreed
upon within 10 days after the written objection sent by the objecting
stockholders in accordance with subsection (c), the valuation of such assets
shall be determined by an arbitration in which (i) the objecting stockholders
shall name in their notice of objection one arbitrator, (ii) the Board of
Directors shall name a second arbitrator within 15 days from the receipt of such
<PAGE>
notice, (iii) the two arbitrators thus selected shall select a third arbitrator
within 15 days thereafter, and (iv) the three arbitrators thus selected shall
determine by majority vote the valuation of such assets within 15 days
thereafter for purposes of such distribution. In the event the third arbitrator
is not selected as provided herein, then such arbitrator shall be selected by
the President of the American Arbitration Association ("AAA"). The costs of such
arbitration shall be borne by the Corporation or by the holders of Preferred
Stock (on a pro rata basis out of the assets otherwise distributable to them) as
follows: (i) if the valuation as determined by the arbitrators is greater than
90% of the valuation as determined by the Board of Directors, the holders of
Preferred Stock shall pay the costs of the arbitration, and (ii) otherwise, the
Corporation shall bear the costs of the arbitration. The arbitration shall be
held in Boston, Massachusetts, in accordance with the rules of the AAA. The
award made by the arbitrators shall be binding upon the Corporation and the
holders of all shares of Common Stock and Preferred Stock, no appeal may be
taken from such award, and judgment thereon may be entered in any court of
competent jurisdiction.
10. MUTILATED OR MISSING CERTIFICATES.
----------------------------------
If any of the Class A Convertible Preferred Stock certificates shall
be mutilated, lost, stolen or destroyed, the Company shall issue, in exchange
and substitution for and upon cancellation of the mutilated Class A Convertible
Preferred Stock certificate, or in lieu of the and substitution for the Class A
Convertible Preferred Stock certificate lost, stolen or destroyed, a new Class A
Convertible Preferred Stock certificate of like tenor and representing an
equivalent amount of shares of Class A Convertible Preferred Stock, but only
upon receipt of evidence of such loss, theft or destruction of such Class A
Convertible Preferred Stock certificate and indemnity, if requested.
11. REISSUANCE OF CLASS A CONVERTIBLE PREFERRED STOCK.
--------------------------------------------------
Shares of Class A Convertible Preferred Stock that have been issued
and reacquired in any manner, including shares purchased or redeemed or
exchanged, shall (upon compliance with any applicable provisions of the laws of
the State of Florida) have the status of authorized and unissued shares of
Preferred Stock undesignated as to series or class and may be redesignated and
reissued as part of any series or class of Preferred Stock.
12. BUSINESS DAY.
-------------
If any payment, redemption or exchange shall be required by the terms
hereof to be made on a day that is not a business day, such payment, redemption
or exchange shall be made on the immediately succeeding business day.
13. HEADINGS OF SUBDIVISIONS.
-------------------------
The headings of various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the provisions
hereof.
<PAGE>
14. SEVERABILITY OF PROVISIONS.
---------------------------
If any right, preference or limitations of the Class A Convertible
Preferred Stock set forth in this Article IV is invalid, unlawful or incapable
of being enforced by reason of any rule or law or public policy, all other
rights, preferences and limitations set forth in this Article IV, which can be
given effect without the invalid, unlawful or unenforceable right, preference or
limitation, shall, nevertheless, remain in full force and effect, and no right,
preference or limitation herein set forth shall be deemed dependent upon any
other such right, preference or limitation unless so expressed herein.
15. NOTICE TO THE COMPANY.
----------------------
All notices and other communications required or permitted to be given
to the Company hereunder shall be made by courier to the Company at its
principal executive offices (currently located at the following address:
TravelNow.com, Inc., 318 Park Central East, Suite 306, Springfield, Missouri
65806). Minor imperfections in any such notice shall not affect the validity
thereof.
16. LIMITATIONS.
------------
Except as may otherwise be required by law, the shares of Class A
Convertible Preferred Stock shall not have any powers, preferences or relative,
participating, optional or other special rights other than those specifically
set forth in this Article IV (as such resolution may be amended from time to
time) or otherwise in the Articles of Incorporation of the Company.
B. The foregoing amendment shall become effective as of the close of business
on the date these Articles of Amendment are approved by the Florida
Department of State and all filing fees then due have been paid, all in
accordance with the corporation laws of the State of Florida.
C. The amendment recited in Section A above has been duly adopted in
accordance with the provisions of Section 607.1002 of Florida's 1989
Business Corporation Act, the Board of Directors having adopted a
resolution setting forth such amendment on January 5, 2000.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed by Jeffrey A. Wasson, its Co-Chief Executive Officer and attested by J.
Christopher Noble, its Secretary, this 5th day of January, 2000.
Attest: TRAVELNOW.COM, INC.
By: /s/ J. Christopher Noble By: /s/ Jeffrey A. Wasson
- ---------------------------- -------------------------
Name: J. Christopher Noble Name: Jeffrey A. Wasson
Title: Co-Chief Executive Officer and Title: Co-Chief Executive Officer
Secretary
EXHIBIT 10.0
- --------------------------------------------------------------------------------
TRAVELNOW.COM INC.
CLASS A CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. AUTHORIZATION AND SALE OF SHARES.................................1
1.1 Authorization....................................................1
1.2 Sale of Shares...................................................1
1.3 Terms of Preferred Stock.........................................1
SECTION 2. CLOSING DATE; DELIVERY...........................................1
2.1 Closing Date.....................................................1
2.2 Delivery.........................................................1
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................2
3.1 Organization and Standing........................................2
3.2 Corporate Power; Authorization...................................2
3.3 Issuance and Delivery of the Shares and the Common Stock.........3
3.4 SEC Documents; Financial Statements..............................3
3.5 Intellectual Property............................................3
3.6 Properties.......................................................4
3.7 Capitalization...................................................4
3.8 Litigation.......................................................4
3.9 No Defaults......................................................4
3.10 Governmental Consents............................................4
3.11 Taxes............................................................5
3.12 Insurance........................................................5
3.13 No Material Adverse Change.......................................5
3.14 Disclosure.......................................................5
3.15 Nasdaq SmallCap Market Qualification.............................5
3.16 Investment Company...............................................5
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASERS..........5
4.1 Authorization....................................................5
4.2 Investment Experience............................................6
4.3 Investment Intent................................................6
4.4 Registration or Exemption Requirements...........................6
4.5 Restriction on Short Sales.......................................7
4.6 No Legal, Tax or Investment Advice...............................7
SECTION 5. CONDITIONS TO CLOSING OF PURCHASERS..............................7
5.1 Representations and Warranties...................................7
5.2 Legal Opinion....................................................7
5.3 Officer's Certificate............................................7
5.4 Registration Statement...........................................7
<PAGE>
5.5 Covenants........................................................7
5.6 Additional Documents.............................................7
SECTION 6. CONDITIONS TO CLOSING OF COMPANY.................................8
6.1 Receipt of Payment...............................................8
6.2 Representations and Warranties...................................8
6.3 Covenants........................................................8
SECTION 7. AFFIRMATIVE COVENANTS OF THE COMPANY.............................8
7.1 Financial Information............................................8
7.2 Registration Requirements........................................8
7.3 Indemnification and Contribution................................11
SECTION 8. RESTRICTIONS ON TRANSFERABILITY OF SHARES AND COMMON STOCK:
COMPLIANCE WITH SECURITIES ACT..................................13
8.1 Restrictions on Transferability.................................13
8.2 Restrictive Legend..............................................13
8.3 Transfer of Shares and Common Stock.............................14
8.4 Purchaser Information...........................................14
8.5 Special Provisions Relating to Tudor............................14
SECTION 9. MISCELLANEOUS...................................................15
9.1 Waivers and Amendments..........................................15
9.2 Governing Law...................................................15
9.3 Survival........................................................15
9.4 Successors and Assigns..........................................15
9.5 Entire Agreement................................................15
9.6 Notices, etc....................................................15
9.7 Severability Of This Agreement..................................16
9.8 Counterparts....................................................16
9.9 Further Assurances..............................................16
9.10 Expenses........................................................16
<PAGE>
CLASS A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
This Class A Convertible Preferred Stock Purchase Agreement (the
"Agreement") is entered into this ____ day of January, 2000 by and among
TRAVELNOW.COM INC., a Florida corporation (the "Company"), with its principal
office at 318 Park Central East, Suite 306, Springfield, Missouri 75806 and
RAPTOR GLOBAL PORTFOLIO, LTD., with its principal office at 40 Rowes Wharf,
Boston, Massachusetts, 02110, on its own behalf and on behalf of each of the
Tudor Entities (as defined below) that acquires or holds Shares or Common Stock
(as defined below) (collectively, the "Purchasers").
SECTION I. AUTHORIZATION AND SALE OF SHARES
A. Authorization. The Company has authorized the sale and issuance of up to
Five Hundred Thousand (500,000) shares of Class A Convertible Preferred Stock,
no par value (the "Shares").
B. Sale of Shares. Subject to the terms and conditions of this Agreement,
the Company agrees to issue and sell to each Purchaser and each Purchaser
severally agrees to purchase from the Company on the Closing Date (as defined
below), the number of shares of Class A Convertible Preferred Stock set forth
opposite each Purchaser's name on Exhibit A for a purchase price (the "Purchase
Price") of Nine Dollars ($9) per Share.
C. Terms of Preferred Stock. The Shares shall have the preferences and
rights set forth in the Articles of Amendment to the Articles of Incorporation
of TravelNow.com, Inc. adopted by the Board of Directors and filed with the
Florida Department of State on or before the "Closing Date" (as defined below)
substantially in the form attached hereto as Exhibit B. Without limiting any of
the rights, powers, preferences and qualifications set forth in said Articles of
Amendment, the Shares shall be convertible into shares of common stock of the
Company (the "Common Stock").
SECTION II. CLOSING DATE; DELIVERY
A. Closing Date. The closing of the purchase and sale of the Shares (the
"Closing") shall be held at the offices of Shook, Hardy & Bacon, L.L.P., 1010
Grand Boulevard, Kansas City, Missouri at 10:00 a.m. Central Standard Time, on
January 5, 2000 or at such other time and place upon which the Company and
Purchasers purchasing the majority of the Shares shall agree. The date of the
Closing is hereinafter referred to as the "Closing Date."
B. Delivery. At the Closing, the Company shall deliver to each Purchaser a
certificate, registered in the Purchaser's name as shown on Exhibit A,
representing the number of Shares to be purchased by the Purchaser. Such
delivery shall be against payment of the Purchase Price therefor by wire
transfer of immediately available funds in the amount set forth opposite such
Purchaser's name on Exhibit A to a bank account designated in writing by the
Company to each Purchaser at least two (2) business days prior to the Closing
Date. Each Purchaser shall only be obligated to pay the Purchase Price of the
Shares purchased by it.
<PAGE>
SECTION III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants as of the date hereof to, and
covenants with, the Purchasers as follows:
A. Organization and Standing. The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has full corporate power and authority to own
or lease its properties and conduct its business presently and as proposed to be
conducted and as described in the Company's annual report on Form 10-KSB for the
year ended March 31, 1999 (the "Form 10-KSB") and is duly qualified as a foreign
corporation and in good standing in all jurisdictions in which the character of
the property owned or leased or the nature of the business transacted by it
makes qualification necessary (except where the failure to be so qualified would
not have a Material Adverse Effect (as defined below) on the business,
properties, financial condition or results or operations of the Company). Except
as set forth on Schedule 3.1 hereto, the Company has no subsidiaries or equity
interest in any other entity.
B. Corporate Power; Authorization. The Company has all requisite corporate
power, and has taken all requisite corporate action, to execute and deliver this
Agreement, to sell and issue the Shares and to carry out and perform all of its
obligations under this Agreement. This Agreement constitutes the legal, valid
and binding obligation of the Company, enforceable in accordance with its terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting the enforcement of
creditors' rights generally, (ii) as limited by equitable principles generally
and (iii) as to those provisions of Section 7.3 hereof relating to indemnity or
contribution as limited by public policy. The execution and delivery of this
Agreement does not, and the performance of this Agreement and the compliance
with the provisions hereof and the issuance, sale and delivery of the Shares by
the Company will not conflict with, or result in a breach or violation of the
terms, conditions or provisions of, or constitute a default (or an event that
with notice or lapse of time or both would constitute a default) under, or
result in the creation or imposition of any lien pursuant to the terms of, the
Company's articles of incorporation, as amended, (the "Articles of
Incorporation") or its bylaws (the "Bylaws") or, to the Company's knowledge, any
statute, law, rule or regulation, or any state or federal order, judgment or
decree applicable to the Company or any indenture, mortgage, lease or other
agreement or instrument to which the Company or any of its properties is
subject, except as would not individually or in the aggregate have a material
adverse effect on, or result in a material adverse change in, the business,
properties, operation, condition (financial or other), prospects or results of
operations of the Company, taken as a whole, or render this Agreement, or any
portion hereof, invalid or unenforceable or impair in any material respect the
ability of the Company to perform fully its obligations hereunder (any of the
foregoing shall be referred to herein as a "Material Adverse Effect").
C. Issuance and Delivery of the Shares and the Common Stock. The Shares
have been duly authorized and, when issued and paid for in compliance with the
provisions of this Agreement, will be validly issued, fully paid and
nonassessable. When issued upon the conversion of the Shares, the Common Stock
so issued will be duly authorized, validly issued, fully paid and nonassessable
and will conform to the description thereof contained in the Registration
Statement (as defined below). Neither the issuance and delivery of the Shares
<PAGE>
nor the Common Stock issuable upon conversion of Shares is subject to
preemptive, co-sale, right of first refusal or any other similar rights of any
third person or any liens or encumbrances. The Company has not granted any
presently effective registration rights with respect to its securities other
than the registration rights set forth herein. No further approval or authority
of the stockholders or Board of Directors of the Company will be required for
the issuance and sale of the Shares or the Common Stock issuable upon conversion
of the Shares.
D. SEC Documents; Financial Statements. Except as set forth in Schedule 3.4
hereof, the Company has filed in a timely manner all documents that the Company
was required to file with the Securities and Exchange Commission (the SEC")
under Sections 13, 14(a) and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), during the twelve (12) months preceding the date
of this Agreement. As of their respective filing dates, all documents filed by
the Company with the SEC (the "SEC Documents") complied in all material respects
with the requirements of the Exchange Act. The SEC Documents as of their
respective dates contained no untrue statement of material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
SEC Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto. The Financial Statements have
been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the financial position of the Company at
the dates thereof and the results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal,
recurring adjustments). There is no material commitment of the Company which is
not reflected in the Financial Statements except commitments made in the
ordinary course of business. There have not been any changes in the assets,
liabilities, financial condition or operations of the Company from that
reflected in the Financial Statements, except changes in the ordinary course of
business that have not had a Material Adverse Effect.
E. Intellectual Property. The Company owns or possesses adequate rights to
use all patents, patent rights, inventions, trade secrets and know-how used by
it or that are necessary for the conduct of its business as presently conducted
and proposed to be conducted as described in the SEC Documents. The Company has
not received any notice of, nor has any knowledge of, any infringement of or
conflict with asserted rights of others with respect to any patent, patent
right, invention, trade secret or know-how that, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a Material Adverse Effect.
F. Properties. The Company has good and valid title to all of the
properties and assets reflected as owned in the Financial Statements, free and
clear of all liens, mortgages, (statutory or otherwise), security interests,
pledges, claims or encumbrances except those, if any, disclosed in the Financial
Statements. The Company holds its leased properties under valid and binding
leases, with such exceptions as are not materially significant in relation to
the business of the Company. The Company owns or leases all of such properties
which, to its knowledge, are necessary to its operations as now conducted.
<PAGE>
G. Capitalization. All of the Company's outstanding shares of capital stock
have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and were not issued in violation of or subject to any
preemptive right or other rights to subscribe for or purchase securities. The
actual authorized and outstanding capital stock of the Company as of the date
hereof and as of the Closing Date is set forth in Schedule 3.7 hereto, assuming
that all Shares are issued pursuant to the terms of this Agreement. Except as
disclosed in Schedule 3.7 hereto, there are no outstanding options to purchase,
or any preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to
issue or sell shares of the Company's capital stock or any such options, rights,
convertible securities or obligations.
H. Litigation. There is no pending or, to the Company's knowledge,
threatened action, suit or other proceeding before any court, governmental body
or authority, or arbitrator to which the Company is a party or to which its
property or assets are subject.
I. No Defaults. The Company is not in violation or default of any provision
of the Articles of Incorporation or Bylaws, or any organizational documents, or,
to the Company's knowledge, in breach with respect to any agreement, judgment,
decree, order, mortgage, deed of trust, lease, franchise, license, indenture,
permit or other instrument to which it is a party or by which it or any of its
properties are bound which violation, default or breach would have a Material
Adverse Effect; and the Company is not aware of any fact which constitutes an
event of default on the part of the Company as defined in such documents or
which, with notice or lapse of time or both, would constitute such an event of
default.
J. Governmental Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with any
federal, state, or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
this Agreement except for (a) compliance with the securities and blue sky laws
in the states and other jurisdictions in which Shares are offered and/or sold,
which compliance will be effected in accordance with such laws, and (b) the
filing of the Registration Statement and all amendments thereto with the SEC as
contemplated by Section 7.2 hereof. The Company has not been advised, and has no
reason to believe, that it is not conducting business in compliance in all
material respects with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business including but not limited to,
all applicable local, state and federal environmental laws and regulations.
K. Taxes. The Company has accurately prepared and timely filed all federal,
state and other tax returns which are required to be filed by it and has timely
paid all taxes covered by such returns which have become due and payable except
for such taxes as are being contested in good faith. The Company has no
knowledge of any tax deficiency which has been or might be asserted or
threatened against the company which would have a Material Adverse Effect.
L. Insurance. The Company maintains insurance of the types and in the
amounts it deems adequate for its business covering all risks customarily
insured against, all of which insurance is in full force and effect.
<PAGE>
M. No Material Adverse Change. There have not been any changes in the
assets, liabilities, financial condition or operations of the Company from that
reflected in the Financial Statements except changes in the ordinary course of
business that have not had a Material Adverse Effect.
N. Disclosure. This Agreement does not contain any untrue statement of fact
or omit to state a fact necessary in order to make the statements contained
herein not materially misleading.
O. Nasdaq SmallCap Market Qualification. The Company has submitted a
listing application and listing agreement with Nasdaq to list the Common Stock
for quotation on the Nasdaq SmallCap Market. If such listing is approved, for so
long as the Company is obligated to keep in effect the Registration Statement
provided under Section 7.2 hereof, the Company shall use its reasonable best
efforts to maintain such listing on the Nasdaq SmallCap Market, the Nasdaq
National Market System or a national securities exchange, as defined in the
Exchange Act. The Company shall also file a share listing application with
Nasdaq, as and when appropriate, covering the Shares and the Common Stock
issuable upon the conversion of the Shares.
P. Investment Company. The Company is not a registered investment company
within the meaning of the Investment Company Act of 1940, as amended.
SECTION IV. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASERS
Each Purchaser hereby severally and not jointly, represents and warrants to
the Company, effective as of the Closing Date, as follows:
A. Authorization. Purchaser represents and warrants to the Company that:
(i) Purchaser has all requisite legal and corporate or other power and capacity
and has taken all requisite corporate or other action to execute and deliver
this Agreement, to purchase the Shares to be purchased by it and to carry out
and perform all of its obligations under this Agreement; and (ii) this Agreement
constitutes the legal, valid and binding obligation of Purchaser, enforceable in
accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, or similar laws relating to or affecting the
enforcement of creditors' rights generally and (b) as limited by equitable
principles generally.
B. Investment Experience. Purchaser is an "accredited investor" as defined
in Rule 501(a) under the Securities Act of 1933, as amended (the "Securities
Act"). Purchaser is aware of the Company's business affairs and financial
condition and has had access to and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire the
Shares. Purchaser has such business and financial experience as is required to
give it the capacity to protect its own interests in connection with the
purchase of the Shares. Purchaser is able to bear the economic risk of holding
the Shares for an indefinite period, including the loss of Purchaser's entire
investment. The Shares were not offered or sold to Purchaser by any form of
general solicitation or advertising.
<PAGE>
C. Investment Intent. Purchaser is purchasing the Shares for its own
account as principal, for investment purposes only, and not with a view to, or
for, resale, distribution or fractionalization thereof, in whole or in part,
within the meaning of the Securities Act. Purchaser understands that its
acquisition of the Shares has not been registered under the Securities Act or
registered or qualified under any state securities law in reliance on specific
exemptions therefrom, which exemptions may depend upon, among other things, the
bona fide nature of Purchaser's investment intent as expressed herein. Purchaser
has, in connection with its decision to purchase the number of shares set forth
in Exhibit A hereto, relied solely upon the representations and warranties of
the Company contained herein.
D. Registration or Exemption Requirements.
1. Purchaser further acknowledges and understands that the Shares may
be required to be held indefinitely, and they may not be resold or otherwise
transferred except in a transaction registered under the Securities Act or where
an exemption from such registration is available. Purchaser understands that the
certificate(s) evidencing the Shares will be imprinted with a legend that
prohibits the transfer of the Shares unless (i) they are registered or such
registration is not required, and (ii) if the transfer is pursuant to an
exemption from registration other than Rule 144 promulgated under the Securities
Act ("Rule 144") and, if the Company shall so request in writing, an opinion of
counsel satisfactory to the Company is obtained to the effect that the
transaction is so exempt and in compliance with applicable state law.
2. Purchaser further acknowledges that because the Shares are not
listed on the Nasdaq National Market System or a national securities exchange,
resale of the Shares may be limited by applicable state law, even where a
registration statement covering resale of the Shares has been declared effective
under the Securities Act. For example, certain states may limit resale of the
Shares to qualified institutions or in unsolicited qualified broker transactions
in the absence of qualification or another exemption in such state.
E. Restriction on Short Sales. Purchaser represents and warrants to and
covenants with the Company that neither Purchaser nor its affiliates has engaged
or will engage in any short sales of Common Stock prior to the effectiveness of
the Registration Statement (as defined below), except to the extent that any
such short sale is fully covered by shares of Common Stock other than the shares
of Common Stock issuable upon conversion of the Shares
F. No Legal, Tax or Investment Advice. Purchaser understands that nothing
in this Agreement or any other materials presented to Purchaser in connection
with the purchase and sale of the Shares constitutes legal, tax or investment
advice. Purchaser has consulted such legal, tax and investment advisors as it,
in its sole discretion, has deemed necessary or appropriate in connection with
its purchase of the Shares.
SECTION V. CONDITIONS TO CLOSING OF PURCHASERS
Each Purchaser's obligation to purchase the Shares at the Closing is, at
the option of such Purchaser, subject to the fulfillment or waiver as of the
Closing Date of the following conditions:
<PAGE>
A. Representations and Warranties. The representations and warranties made
by the Company in Section 3 hereof shall be true and correct in all material
respects when made, and shall be true and correct in all material respects on
the Closing Date with the same force and effect as if they had been made on and
as of said date.
B. Legal Opinion. The Company shall have delivered a legal opinion from
Shook, Hardy & Bacon, L.L.P. counsel to the Company, addressed to the Purchasers
in the form attached hereto as Exhibit C with respect to the sale of the Shares
hereunder.
C. Officer's Certificate. The Company shall deliver to the Purchasers a
certificate, dated as of the Closing Date, signed by a Co-Chief Executive
Officer of the Company, stating that the signer of said certificate has
carefully examined the SEC Documents and that the representations and warranties
set forth in Section 3 hereof are true as of and all of the closing conditions
set forth in Section 5 hereof have been satisfied on the Closing Date.
D. Registration Statement. The Company shall have delivered a preliminary
draft of the Registration Statement (as defined below) that is to be filed with
the Securities and Exchange Commission as required herein.
E. Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the Closing Date shall
have been performed or complied with in all material respects.
F. Additional Documents. The Purchasers shall have received such other
documents as they and their counsel may reasonably request for the purpose of
facilitating the consummation or performance of the sale of the Shares and they
and their counsel shall be satisfied with all matters and proceedings related to
this Agreement.
SECTION VI. CONDITIONS TO CLOSING OF COMPANY
The Company's obligation to sell and issue the Shares at the Closing is, at
the option of the Company, subject to the fulfillment or waiver of the following
conditions:
A. Receipt of Payment. The Company shall have received payment, by check or
wire transfer of immediately available funds, in the full amount of the Purchase
Price for the Shares sold.
B. Representations and Warranties. The representations made by the
Purchasers in Section 4 hereof shall be true and correct in all material
respects when made, and shall be true and correct in all material respects on
the Closing Date with the same force and effect as if they had been made on and
as of such date.
C. Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchasers on or prior to the Closing Date
shall have been performed or complied with in all material respects.
<PAGE>
SECTION VII. AFFIRMATIVE COVENANTS OF THE COMPANY
The Company hereby covenants and agrees as follows:
A. Financial Information. The Company will mail the following reports to
the Purchasers until the Purchasers transfer, assign or sell more than
seventy-five percent (75 %) of the Shares purchased by the Purchasers pursuant
to this Agreement:
1. A copy of its Annual Report on Form 10-KSB, within ninety (90) days
after the end of each fiscal year or by such later date as such Form 10-KSB may
be filed with the Securities and Exchange Commission in compliance with federal
securities laws.
2. A copy of its Quarterly Report on Form 10-QSB within forty-five
(45) days after the end of the first, second and third quarterly accounting
periods of each fiscal year of the Company or by such later date as such Form
10-KSB may be filed with the Securities and Exchange Commission in compliance
with federal securities laws.
B. Registration Requirements.
1. No later than fifteen (15) business days following the Closing
Date, the Company shall file with the SEC one or more registration statements on
Form SB-2 (together with any prospectus included therein, a "Registration
Statement") pursuant to Rule 415 of the Securities Act in order to register with
the SEC the continuous resale by the Purchasers, from time to time, of all
shares of Common Stock of the Company that may be acquired by the Purchasers
through any exchange or conversion of the Shares as provided for in Exhibit B
attached hereto, through the Nasdaq SmallCap Market or the facilities of any
national securities exchange on which the Common Stock is then traded, or in
privately-negotiated transactions. The Company shall use its best efforts to (i)
cause such Registration Statement to be declared effective on or before March
15, 2000 and (ii) cause a Nasdaq application covering shares of Common Stock of
the Company to have become effective (which application shall also cover the
Shares and the Common Stock issuable upon the conversion of the Shares). Each
Purchaser agrees to furnish promptly to the Company in writing all information
required from time to time to be disclosed in order to make the information
previously furnished to the Company by such holder not misleading.
2. If at any time following the filing of a Registration Statement by
the Company, the Company shall qualify to file a registration statement on Form
S-3 under the Securities Act, the Company shall thereafter be entitled to
replace any Form SB-2 registration statement referred to in Section 7.1(a) above
with a registration statement on Form S-3 that has been declared effective by
the SEC. Any such Form S-3 used to replace a Form SB-2 pursuant to this Section
7.2(b), together with any prospectus included in such Form S-3, shall thereafter
be referred to as a "Registration Statement" and any Form SB-2 that is so
replaced shall cease to be referred to by that term for purposes of this
Agreement.
<PAGE>
3. The Company shall pay all Registration Expenses (as defined below)
in connection with any registration, qualification or compliance hereunder, and
each Purchaser shall pay all Selling Expenses (as defined below) and other
expenses that are not Registration Expenses relating to the Common Stock resold
by such Purchaser. "Registration Expenses" shall mean all expenses, except for
Selling Expenses, incurred by the Company in complying with the registration
provisions herein described, including without limitation, all registration,
qualification and filing fees (including all SEC and Nasdaq fees), printing
expenses, escrow fees, fees and disbursements of counsel for the Company and for
any underwriter (unless paid by such underwriter), blue sky fees and expenses
and the expense of any special audits incident to or required by any such
registration. "Selling Expenses" shall mean only selling commissions,
underwriting fees and stock transfer taxes applicable to the Common Stock sold
by each Purchaser and all fees and disbursements of counsel for any Purchaser.
4. In the case of the registration effected by the Company pursuant to
these registration provisions, the Company will use its best efforts to:
a. keep such registration statement on From SB-2 or Form S-3
effective until the earlier of (A) the second anniversary of the date on which
the Registration Statement first becomes effective, (B) such date as all of the
Common Stock has been resold or (C) such time as all of the Common Stock held by
the Purchasers can be sold within a given three-month period without compliance
with the registration requirements of the Securities Act pursuant to Rule 144;
b. prepare and file with the SEC such amendments and supplements
to the Registration Statement and the prospectus used in connection therewith as
may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by the Registration
Statement;
c. furnish such number of prospectuses and other documents
incident thereto, including any amendment of or supplement to the prospectus, as
a Purchaser from time to time may reasonably request;
d. cause all Common Stock registered as described herein to be
listed on each securities exchange and quoted on each quotation service on which
the common equity securities of the Company are then listed or quoted;
e. provide a transfer agent and registrar for all Common Stock
registered pursuant to the Registration Statement and a CUSIP number for all
such Common Stock;
f. otherwise use its best efforts promptly to comply with all
applicable rules and regulations of the SEC;
<PAGE>
g. file the documents required of the Company and otherwise use
its best efforts promptly to obtain, if applicable, and maintain requisite blue
sky clearance in (A) all jurisdictions in which any of the Shares are originally
sold and (B) all other states specified in writing by a Purchaser, provided as
to clause (B) however, that the Company shall not be required to qualify to do
business or consent to service of process in any state in which it is not now so
qualified or has not so consented; and
h. with respect to the initial filing of the Registration
Statement, as of the date of declaration of effectiveness, obtain an opinion of
counsel to the Company in customary form and reasonably acceptable to each
Purchaser addressed to each Purchaser selling registrable securities pursuant to
the Registration Statement. The Company shall use its best efforts to qualify
for use of Form SB-2 or Form S-3 under the Securities Act to register the resale
of the Common Stock issuable upon the conversion of the Shares and to maintain
such qualification during the periods described in subsection (c)(i) hereof and
to be listed on the Nasdaq Small Cap market and maintain such listing unless
listed on NMS or another national exchange.
5. The Company shall furnish to each Purchaser upon request a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary in order to facilitate the public sale or other
disposition of all or any of the Common Stock held by the Purchaser.
6. With a view to making available to the Purchasers the benefits of
Rule 144 and any other rule or regulation of the SEC that may at any time permit
a Purchaser to sell Common Stock to the public without registration or pursuant
to registration, the Company covenants and agrees to: (i) make and keep public
information available, as those terms are understood and defined in Rule 144,
until the earlier of (A) the second anniversary of the Closing Date or (B) such
date as all of the Common Stock shall have been resold: (ii) file with the SEC
in a timely manner all reports and other documents required of the Company under
the Exchange Act; and (iii) furnish to any Purchaser upon request, as long as
the Purchaser owns any Common Stock, (A) a written statement by the Company that
it has complied with the reporting requirements of the Exchange Act, (B) a copy
of the most recent annual or quarterly report of the Company, and (C) such other
information as may be reasonably requested in order to avail any Purchaser of
any rule or regulation of the SEC that permits the selling of any such Common
Stock without registration.
7. The Company may, at any time, refuse to permit a Purchaser to
resell any Common Stock pursuant to the Registration Statement; provided,
however, that in order to exercise this right at any time the Company does not
qualify for either Form SB-2 or Form S-3, the Company must deliver a certificate
in writing to the Purchasers to the effect that suspension of the sale of shares
under the Registration Statement, until such time as the Company can make an
appropriate filing with the SEC, is necessary because a sale pursuant to the
Registration Statement, in its then-current form, could constitute a violation
of the federal securities laws. In such an event, the Company shall use its best
efforts to amend the Registration Statement if necessary and take all other
actions necessary to allow such sale under the federal securities laws, and
shall notify the Purchasers and the Placement Agent promptly after it has
determined that such sale has become permissible under the federal securities
laws. Notwithstanding the foregoing, the Company shall not under any
<PAGE>
circumstances be entitled to exercise its right to suspend sales under the
Registration Statement more than two (2) times in any twelve (12) month period,
and the period during which such Registration Statement may be withdrawn shall
not exceed thirty (30) days.
C. Indemnification and Contribution.
1. The Company agrees to indemnify and hold harmless each Purchaser
and its officers, directors, controlling persons and affiliates from and against
any losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) to which such Purchaser may become subject (under the Securities Act,
state law, common law or otherwise) insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, any untrue statement of a material fact contained in, or omission of
a material fact from, the Registration Statement, or arise out of any failure by
the Company to fulfill any undertaking included in the Registration Statement or
this Agreement, and the Company will, as incurred, reimburse such Purchaser for
any legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim; provided however, that
the Company shall not be liable in any such case to the extent that such loss,
claim, damage or liability arises out of, or is based upon an untrue statement
made in such Registration Statement in reliance upon and in conformity with
information furnished to the Company in writing by or on behalf of such
Purchaser specifically for use in preparation of the Registration Statement. The
Company will reimburse the Purchasers for any legal or other expenses reasonably
incurred and documented in investigating, defending or preparing to defend any
such action, proceeding or claim notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations under
this section and the possibility that such payments might later be held to be
improper, provided, that to the extent any such payment is ultimately held to be
improper, the persons receiving such payments shall promptly refund them.
2. Each Purchaser, severally and not jointly, agrees to indemnify and
hold harmless the Company from and against any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) to which the Company
may become subject (under the Securities Act, state law, common law or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon an untrue
statement made in such Registration Statement in reliance upon and in conformity
with information furnished to the Company in writing by or on behalf of such
Purchaser specifically for use in preparation of the Registration Statement;
provided, however, that no Purchaser shall be liable in any such case for any
untrue statement included in any Prospectus which statement has been corrected,
in writing, by such Purchaser and delivered to the Company before the sale from
which such loss occurred and in no event shall any Purchaser be liable for any
amount in excess of the net proceeds received for the sale of its Common Stock
pursuant to such Registration Statement.
3. Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.3, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and the indemnifying person shall have been noticed thereof,
<PAGE>
the indemnifying person shall be entitled to participate therein, and, to the
extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to the indemnified person. After notice from the
indemnifying person to such indemnified person of the indemnifying person's
election to assume the defense thereof, the indemnifying person shall not be
liable to such indemnified person for any legal expenses subsequently incurred
by such indemnified person in connection with the defense thereof; provided,
however, that if there exists or shall exist a conflict of interest that would
make it inappropriate in the reasonable judgment of the indemnified person for
the same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person.
4. If the indemnification provided for in this Section 7.3 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) hereof in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Purchasers on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or a Purchaser on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Purchasers agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Purchasers were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, or liabilities (or actions in respect thereof) referred to above in
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Purchaser shall be required to contribute any amount in
excess of the amount, if any, by which the amount received by the Purchaser from
the sale of the Common Stock to which such loss relates exceeds the amount of
any damages which such Purchaser has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Purchasers'
obligations in this subsection (d) to contribute are several in proportion to
their respective sales of Common Stock.
5. The obligations of the Company and the Purchasers under this
Section 7.3 shall be in addition to any liability which the Company and the
respective Purchasers may otherwise have.
<PAGE>
SECTION VIII. RESTRICTIONS ON TRANSFERABILITY OF SHARES AND COMMON STOCK:
COMPLIANCE WITH SECURITIES ACT
A. Restrictions on Transferability. Neither the Shares nor the Common Stock
shall be transferable in the absence of a registration under the Securities Act
or an exemption therefrom or in the absence of compliance with any term of this
Agreement. The Company shall be entitled to give stop transfer instructions to
its transfer agent with respect to the Shares and the Common Stock in order to
enforce the foregoing restrictions.
B. Restrictive Legend. Each certificate representing the Shares or the
Common Stock shall bear substantially the following legends (in addition to any
legends required under applicable securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT PURPOSES ONLY AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS. THE SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM. THE COMPANY WILL PROVIDE A SUMMARY
STATEMENT DESCRIBING THE AUTHORITY OF THE COMPANY TO ISSUE
DIFFERENT CLASSES OF SHARES OR DIFFERENT SERIES WITHIN A
CLASS, THE DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES, AND
LIMITATIONS APPLICABLE TO EACH CLASS AND THE VARIATIONS IN
RIGHTS, PREFERENCES, AND LIMITATIONS FOR EACH SERIES (AND
THE AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE
VARIATIONS FOR FUTURE SERIES) TO THE RECORD HOLDER OF THIS
CERTIFICATE WITHOUT CHARGE ON REQUEST TO THE COMPANY AT ITS
PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE.
C. Transfer of Shares and Common Stock. The Purchasers hereby covenant with
the Company not to make any sale of the Shares or the Common Stock except either
(i) in accordance with Rule 144, in which case Purchasers covenant to comply
with Rule 144 or (ii) pursuant to another exemption under the Securities Act; or
in case of sales of Common Stock in accordance with the Registration Statement,
in which case Purchasers covenant to comply with the requirement of delivering a
current prospectus. Permissible sales of the Shares shall include sales between
and among the Purchasers, provided such sales comply with the first sentence of
this Section 8.3.
D. Purchaser Information. The Company may require each Purchaser to furnish
the Company with such information and undertakings as it may reasonably request
in writing from time to time regarding such Purchaser and the distribution of
any of that Purchaser's Common Stock and each Purchaser hereby covenants that it
<PAGE>
will notify the Company in writing of any changes regarding such Purchaser or
its distribution of Common Stock that may affect the accuracy of the
Registration Statement.
E. Special Provisions Relating to Tudor. For purposes of determining
whether, for any provision hereof, the number of shares of capital stock held by
a Tudor Entity (as defined below) is sufficient to meet a required threshold,
such Tudor Entity shall be deemed to hold the number of shares of capital stock
issued or issuable upon conversion, exercise or exchange, directly or
indirectly, of any derivative securities held by such Tudor Entity and any of
its Affiliates and other Tudor Entities.
"Tudor Entity" or "Tudor Entities" means each of the following: Tudor
Private Equity Fund, L.P., Tudor Arbitrage Partners, L.P., Tudor BVI Futures,
Ltd., Raptor Global Fund, L.P., Raptor Global Fund Ltd., Raptor Global
Portfolio, Ltd., ALTAR Rock Fund, L.P. or any funds or other investment vehicles
or entities of which any of the forgoing entities are Affiliates, or any
Affiliate or Affiliated Group of Tudor Investment Corporation and/or Tudor
Global Trading, Inc.
"Affiliate" means any other person directly or indirectly controlling,
controlled by, or under direct or indirect common control with the referenced
person or entity and includes without limitation, (a) any person who is an
officer, director, general partner or direct or indirect beneficial holder of at
least 5% of the then outstanding capital stock of the referenced person or
entity, (b) any person of which the referenced person or entity and/or its
Affiliates (as defined in clause (a) above), directly or indirectly, either
beneficially own(s) at least 5% of the then outstanding equity securities or
constitute(s) at least a 5% equity participant, and (c) any entities for which a
Tudor Entity or any of its Affiliates (as defined in clauses (a) or (b) above)
serve as general partner and/or investment advisor or in a similar capacity, and
all mutual funds or other pooled investment vehicles or entities under the
control or management of such Tudor Entity or the general partner or investment
adviser thereof or any person in a similar capacity, or any Affiliate (as
defined in clause (a) or (b) above) of any of them, or any Affiliates of any of
the foregoing.
"Affiliated Group" has the meaning given to it in Section 1504 of the
Internal Revenue Code of 1986, as amended, and in addition includes any
analogous combined, consolidated, or unitary group, as defined under any
applicable state, local, or foregoing income tax law.
SECTION IX. MISCELLANEOUS
A. Waivers and Amendments. With the exception of Section 7 hereof, the
terms of this Agreement may be waived or amended with the written consent of the
Company and each Purchaser to be affected thereby. Any such amendment or waiver
shall be binding upon the Company and each such Purchaser. Section 7 hereof may
be waived or amended with the written consent of the Company and the record
holders of more than Fifty percent (50%) of the Shares and the Common Stock then
outstanding and held by Purchasers, and any such amendment or waiver shall be
binding upon the Company and all holders of Shares and Common Stock then
outstanding.
<PAGE>
B. Governing Law. This Agreement shall be governed in all respects by and
construed in accordance with the laws of the State of Missouri without any
regard to conflicts of laws principles.
C. Survival. The representations, warranties, covenants and agreements made
in this Agreement shall survive any investigation made by the Company or the
Purchasers and the Closing.
D. Successors and Assigns. The provisions hereof shall inure to the benefit
of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties to this Agreement.
E. Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof.
F. Notices, etc. All notices and other communications required or permitted
under this Agreement shall be effective upon receipt and shall be in writing and
may be delivered in person, by telecopy, overnight delivery service or
registered or certified United States mail, addressed to the Company or the
Purchasers, as the case may be, at their respective addresses set forth at the
beginning of this Agreement, or on Exhibit A, or at such other address as the
Company or the Purchasers shall have furnished to the other party in writing
with a copy to:
Shook, Hardy & Bacon L.L.P.
1010 Grand Boulevard
Kansas City, MO 64106
Attention: Kevin R. Sweeney, Esq.
Telecopier No.: (816)842-3190
and
Bingham Dana LLP
150 Federal Street
Boston, Massachusetts 02110
Attention: Victor J. Paci, Esq.
Telecopier No.: (617) 951-8736
All notices and other communications shall be effective upon the earlier of
actual receipt thereof by the person to whom notice is directed or (i) in the
case of notices and communications sent by personal delivery or telecopy, one
business day after such notice or communication arrives at the applicable
address or was successfully sent to the applicable telecopy number, (ii) in the
case of notices and communications sent by overnight delivery service, at noon
(local time) on the second business day following the day such notice or
communication was sent, and (iii) in the case of notices and communications sent
by United States mail, seven (7) days after such notice or communication shall
have been deposited in the United States mail.
<PAGE>
G. Severability Of This Agreement. If any provision of this Agreement shall
be judicially determined to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
H. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
I. Further Assurances. Each party to this Agreement shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as the other party hereto may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
J. Expenses. At the Closing, the Company shall pay by wire transfer or
check (delivered at Closing) the reasonable fees and expenses of legal counsel
of the Purchasers incurred in connection with the execution and delivery of this
Agreement by the Purchasers and the consummation of the transactions
contemplated hereby, not to exceed $13,000.
IN WITNESS WHEREOF, this Agreement is hereby executed as of the date first
above written.
the "Company"
TRAVELNOW.COM INC.
/s/ Jeffrey A. Wasson
-----------------------------------
By: Jeffrey A. Wasson
Title: Co-Chief Executive Officer
the "Purchasers"
RAPTOR GLOBAL PORTFOLIO, LTD.
Name:
-----------------------------------
By:
-----------------------------------
Title:
-----------------------------------
[Print Name and Title]
<PAGE>
Exhibit A........Schedule of Purchasers
Exhibit B .......Articles of Amendment to Articles of Incorporation
Exhibit C........Form of SHB Closing Date Legal Opinion
Exhibit D........Form of Purchaser's Officers Certificate For Transfer of
Securities
Exhibit E........Form of SHB Effective Date Legal Opinion
Schedule 3.1.....Subsidiaries/Equity Interests
Schedule 3.4.....SEC Documents
Schedule 3.7.....Capitalization, Etc.
<PAGE>
EXHIBIT - A
-----------
SCHEDULE OF PURCHASERS
Purchaser Name and Address Number of Shares Purchased
- -------------------------- --------------------------
Raptor Global Portfolio, Ltd. 497,820
Tudor Private Equity Fund, L.P. 0
Tudor Arbitrage Partners, L.P. 0
Tudor BVI Futures, Ltd. 0
Raptor Global Fund, L.P. 0
Raptor Global Fund Ltd. 0
ALTAR Rock Fund, L.P. 2,180
All other Tudor Entities as defined in
Section 8.5 of this Agreement 0
-------
TOTAL SHARES SOLD: 500,000
=======
<PAGE>
EXHIBIT - B
-----------
ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION
(See attached)
<PAGE>
EXHIBIT - C
-----------
FORM OF SHB CLOSING DATE LEGAL OPINION
(See attached)
<PAGE>
Law Offices
---------------------------
SHOOK, HARDY & BACON L.L.P.
Overland Park 1010 Grand Bouldevar, 5th Floor London
Houston Post office Box 15607 Zurich
Washington, D.C. Kansas City, Missouri 64106-0607 Geneva
San Francisco Telephone (816) 474-6550 Melbourne
Miami Facsimile (816) 842-3190 Buenos Aires
January 5, 2000
Raptor Global Portfolio, Ltd.
40 Rowes Wharf
2nd Floor
Boston, Maine 02110
Re: TravelNow.com Inc.
Ladies and Gentlemen:
We have acted as special outside counsel to TravelNow.com Inc. (the
"Company") in connection with the transactions described in the Class A
Convertible Preferred Stock Purchase Agreement dated January 4, 2000 (the
"Agreement") by and between the Company and Raptor Global Portfolio, Ltd. and
each of the Tudor Entities (collectively, the "Purchasers"), pursuant to which
the Company has agreed to issue and sell to you an aggregate of Five Hundred
Thousand (500,000) shares of Class A Convertible Preferred Stock, no par value
(the "Shares"). This opinion is furnished to you pursuant to Section 5.3 of the
Agreement. Capitalized terms used herein and not otherwise defined herein have
the respective meanings provided in the Agreement.
In rendering the opinions expressed below, we have examined and are
familiar with originals or copies of the documents set forth below and such
other agreements, instruments and documents as we have deemed necessary as a
basis for such opinions. In rendering the opinions herein we have relied solely
upon our examination of the following documents and have made no independent
verification or investigation of the matters set forth in such documents:
1. Certified copies of the Articles of Incorporation of the Company and
amendments thereto that have been provided to us by the Florida Department of
State and their bylaws (collectively, "Corporate Records");
2. The Articles of Amendment to the Articles of Incorporation dated January
4, 2000; and
3. the Agreement (and all exhibits attached thereto).
In rendering the opinions set forth herein, we have assumed (i) the
genuineness of all signatures on all documents submitted to us, (ii) the
capacity and competence of each natural person who executed any of these
documents, (iii) the authenticity of all documents submitted to us as originals
<PAGE>
Raptor Global Portfolio, Ltd.
January 5, 2000
Page 2
and of the originals of all documents submitted to us as copies, (iv) the
conformity with the original documents of all documents submitted to us as
copies, and (v) the due authorization, execution and delivery of the Agreement
by all parties thereto other than the Company. We have also assumed that any
certificate, telegram or other document relating to corporate existence and good
standing on which we have relied, which was given or dated earlier than the date
of this letter, has remained accurate as far as relevant to the opinions
contained herein from such earlier date through and including the date of this
letter. We have further assumed that each entity that is a party to the
Agreement other than the Company has been duly organized or formed and is in
good standing as a corporate or partnership organization under the laws of its
jurisdiction. As to any facts material to this opinion, we have, to the extent
that such facts were not independently established by us, relied upon
representations and warranties contained in the Agreement.
We are opining solely with respect to, and we express no opinion herein
concerning any laws other than, the internal laws of Missouri (exclusive of
conflict of laws principles), the 1989 Business Corporation Act of Florida, and
any applicable federal laws of the United States of America to the extent
specifically referred to herein.
It is our opinion that:
1. The Company is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Florida, with all requisite
corporate power and authority to execute, deliver, and perform its obligations
under the Agreement, to issue, sell, and deliver the Shares, and to carry on its
business as presently conducted and to own the property and assets currently
owned by it.
2. The Company's execution and delivery of the Agreement and its
consummation of the transactions contemplated thereby have been duly authorized
by all necessary corporate and stockholder action on the part of the Company.
The Agreement has been duly executed and delivered by the Company and is a valid
and binding agreement and obligation of the Company, enforceable against the
Company in accordance with its terms.
3. Neither the Company's execution and delivery of the Agreement, nor its
issuance and sale to you of the Shares, including the Common Stock issuable upon
the conversion of the Purchased Shares, nor its compliance with the terms of the
Agreement will conflict with, result in any breach of any of the provisions of,
constitute a default under, or result in the creation or imposition of any lien
upon any of the property of the Company pursuant to the Company's Articles of
Incorporation (as amended) or by-laws, or any Missouri or Federal statute, rule,
or regulation, or Florida corporation law, or to the best of our knowledge, any
contract, agreement or instrument to which the Company is a party or any
judgment, order, or decree of any court or arbitrator specifically naming the
Company.
<PAGE>
Raptor Global Portfolio, Ltd.
January 5, 2000
Page 3
4. The authorized capital stock of the Company consists of (i) 50,000,000
shares of common stock, no par value, of which to the best of our knowledge,
10,349,304 shares were issued and outstanding of record immediately prior to the
Closing, and (ii) 25,000,000 shares of Preferred Stock, no par value per share,
none of which were issued and outstanding of record immediately prior to the
Closing. To the best of our knowledge, except as set forth in Schedule 3.7 to
the Agreement, there are no options, warrants, pre-emptive rights, conversion
privileges or other securities of the Company presently outstanding which
contain or create the right to acquire any shares of the capital stock or other
securities of the Company.
5. The Shares to be purchased by you pursuant to the Agreement have been
duly authorized by all necessary corporate and stockholder action on the part of
the Company and such Shares, and the Common Stock issuable upon the conversion
of such Shares, when issued and sold to you against full payment therefore in
accordance with the terms of the Agreement or conversion thereof pursuant to the
Company's Articles of Incorporation (as amended) will be duly authorized,
validly issued, fully paid, and non-assessable. The issuance of the Shares, and
the Common Stock issuable upon the conversion of the Shares, is not subject to
any preemptive right, first refusal right or other right to subscribe for or
purchase such shares pursuant to the Company's Articles of Incorporation (as
amended), by-laws or applicable Missouri, and Florida corporation laws.
6. Based in part on the Purchaser's representations and warranties set
forth in Section 4 of the Stock Purchase Agreement, the issuance by the Company
to you of the Shares, and the issuance of the Common Stock upon the conversion
of the Shares, will not require registration under Section 5 of the Securities
Act of 1933, as amended, or under applicable Florida and Missouri blue sky laws.
7. To the best of our knowledge, there is no action, suit, proceeding, or
governmental investigation pending or threatened against the Company.
8. Except pursuant to federal and state securities laws and except for the
filing of the Articles of Amendment to the Articles of Incorporation of the
Company referred to in the Agreement with the Florida Department of State, no
consent, approval, or authorization of or by, or any designation, declaration,
filing, registration, or qualification with any governmental authority is
required on the part of the Company in connection with the Company's execution,
delivery, and performance of its obligations under the Agreement and its offer,
issuance, sale, and delivery to you of the Shares, and the Common Stock issuable
upon the conversion of the Shares, pursuant to the Agreement.
The foregoing opinions are subject to the following qualifications and
limitations:
A. The enforceability of the Agreement may be limited or affected by
(a) bankruptcy, insolvency, reorganization, moratorium, liquidation,
rearrangement, probate, conservatorship, fraudulent transfer, fraudulent
conveyance and other similar laws (including court decisions) now or hereafter
<PAGE>
Raptor Global Portfolio, Ltd.
January 5, 2000
Page 4
in effect and affecting the rights and remedies of creditors generally or
providing for the relief of debtors, (b) the availability of remedies which are
equitable in nature including but not limited to the remedies of specific
performance and injunctive relief which are subject to the discretion of the
court before which any proceeding therefor may be brought and may not be
available with respect to the enforcement of the terms or provision of the
Agreement and (c) concepts of materiality, reasonableness, good faith and fair
dealing.
B. In rendering the foregoing opinions, we express no opinion as to
(a) the availability of certain equitable remedies, including specific
performance, and further, (b) the legality, validity, enforceability or binding
effect of provisions of the Agreement relating to indemnities and rights of
contribution to the extent prohibited by public policy.
C. Whenever any opinion or statement herein with respect to the
existence or absence of facts, conditions or circumstances is qualified by the
phrase "to our knowledge", "known to us" or words or phrases of similar import
it is intended to indicate that, during the course of our representation of the
Company in connection with the negotiation, execution and delivery of the
Agreement, no information has come to our attention that would give us actual
knowledge of the existence or absence of such facts, conditions or
circumstances. We have not undertaken any independent investigation to determine
the existence or absence of such facts, conditions or circumstances and no
inferences as to our actual knowledge of the existence or absence of such facts,
conditions or circumstances should be drawn from the fact of our representation
of the Company in connection with the negotiation, execution or delivery of the
Agreement. In that regard, we have not made an independent review of any of the
business, properties, operations, transactions, contractual arrangements, orders
or actions or other matters and affairs of or pertaining to the Company, nor
have we undertaken to review our internal files or the files of the Company with
respect to any of the matters contained herein. Furthermore, the phrase "to our
knowledge" refers to the actual present knowledge of the attorneys in our Firm
who have devoted substantive attention to the negotiation, execution and
delivery of the Agreement by the Company, and not to the knowledge of the Firm
of its partners, or employees generally.
The opinions expressed herein are solely for benefit of, and may be relied
upon by, the addressee hereof in connection with the transaction described
herein. The opinions may not be relied upon for any other purpose or relied upon
by any other person, Firm or entity for any purpose. This letter may not be
paraphrased, quoted or summarized, nor may it be duplicated or reproduced in
whole or in part, without our prior written consent. The opinions expressed
herein are as of the date hereof or, to the extent a reference to a certificate
or other document is made herein, to such date and we make no undertaking to
amend or supplement such opinions as facts and circumstances come to our
attention or changes in the law occur which could affect such opinions.
<PAGE>
Raptor Global Portfolio, Ltd.
January 5, 2000
Page 5
Very truly yours,
/s/ SHOOK, HARDY & BACON L.L.P.
-------------------------------
SHOOK, HARDY & BACON L.L.P.
<PAGE>
SCHEDULE - 3.1
--------------
SUBSIDIARIES/EQUITY INTERESTS
Forty-nine percent (49%) equity position (percentage calculated as of
September 30, 1999 and reported on Form 10-QSB) in Nippon TravelNow, K.K. a
Japanese company.
<PAGE>
SCHEDULE - 3.4
--------------
SEC DOCUMENTS
Securities and Exchange Commission filings made prior to July 27, 1999 by
the Company may not have been made in a timely manner.
<PAGE>
SCHEDULE - 3.7
--------------
CAPITALIZATION, ETC.
Authorized and outstanding Common Stock = 10,349,304 shares
Authorized and outstanding Class A Convertible Preferred Stock = 500,000
shares immediately convertible into 500,000 shares of Common Stock
Stock options on 530,000 shares of Common Stock were granted during the
quarter ended September 30, 1999. The options have exercise prices
ranging from $1.50 per share to $65.00 per share and exercise dates
from July 2000 to August 2004 for 500,000 of the shares and September
2000 to September 2006 for 30,000 shares.
