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EXHIBIT 4.6(c)
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, IN A
TRANSACTION THAT, IN THE VIEW OF COUNSEL TO THE COMPANY, IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT PURSUANT TO RULE 144 THEREUNDER OR
PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION
IS NOT REQUIRED UNDER SUCH ACT.
THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS WARRANT HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS AN
EXEMPTION FROM SUCH QUALIFICATION IS AVAILABLE. THE RIGHTS OF ALL PARTIES TO
THESE SECURITIES ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING
OBTAINED OR SUCH EXEMPTION BEING AVAILABLE.
November 14, 1996
WARRANT TO PURCHASE SERIES E PREFERRED STOCK
This Warrant is issued, for good and valuable consideration of $1.00,
receipt of which is hereby acknowledged, to SDK Incorporated (the
"Warrantholder"), by ProBusiness, Inc., a California corporation (the "Company")
located at 0000 Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000. Unless otherwise
stated, all capitalized terms herein have the meaning provided in the Warrant
Purchase Agreement between the Warrantholder, X. X. Xxxxxxx, Xxxxxxxxx X.
Xxxxxxx, Xxxxxxxxx Xxxxxxx, Xxxxxxxx Xxxxxxx and the Company dated November 14,
1996 (the "Warrant Purchase Agreement").
14. Purchase of Shares. Subject to the terms and conditions hereinafter
set forth, the Warrantholder is entitled, upon surrender of this Warrant at the
principal office of the Company (or at such other place as the Company shall
notify the holder hereof in writing), to purchase from the Company, if and to
the extent permitted by law, 20,250 fully paid and nonassessable shares of
Series E Preferred Stock of the Company (the "Shares") at an exercise price of
$7.94 per share, subject to adjustment as provided in Section 7 hereof (the
"Warrant Price"), payable in cash or by check unless exercised pursuant to
Section 4 hereof.
15. Exercise Period. The purchase rights represented by this Warrant
shall become exercisable on the date that Britannia Hacienda V Limited
Partnership ("Landlord") notifies the Company that the work to be constructed by
Landlord pursuant to Section 2.4 and Exhibit C of the
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Build-to-Suit Lease dated September 27, 1996 between Landlord and the Company
(the "Lease Agreement") on the shell and core of the Building (as that term is
defined in the Lease Agreement) and the first phase of the interior improvements
of the Building (as more particularly described in the Lease Agreement) is
substantially complete (as that term is defined in the Lease Agreement) and such
work is, in fact, substantially complete. The period during which the purchase
rights represented by this Warrant are exercisable (the "Exercise Period") shall
end on the earlier of (i) five (5) years after the date of the consummation of a
public offering of the Company that triggers the automatic conversion of Series
E Preferred Stock of the Company into Common Stock under the Company's Articles
of Incorporation (an "Initial Public Offering") or (ii) eight (8) years from the
date of this Warrant as set forth on the first page hereof.
16. Method of Exercise. While this Warrant remains outstanding and
exercisable in accordance with Section 2 above, the holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise shall be
effected by:
(i) the surrender of this Warrant, together with the Form of
Subscription attached hereto as Exhibit 1, duly filled in and executed by the
Warrantholder, to the Secretary of the Company at its principal offices; and
(ii) the payment to the Company of an amount equal to the
aggregate purchase price for the Shares being purchased, unless exercised
pursuant to Section 4 hereof.
17. Conversion Right. During the Exercise Period (and subject to the
conditions set forth in Section 2) and in lieu of exercising this Warrant as
specified in Section 3, Warrantholder may from time to time convert this
Warrant, in whole or in part (but not for a fraction of a share), into a number
of Shares determined by dividing (a) the aggregate fair market value of the
Shares or other securities otherwise issuable upon exercise of this Warrant
minus the aggregate Warrant Price of such Shares by (b) the fair market value of
one Share.
18. Fair Market Value. The fair market value per share of the Shares
shall be equal to: (i) if the Common Stock issuable upon conversion of the
Shares is listed on a national stock exchange or over the counter market, then
the price per share listed on such national stock exchange, or the average of
the final "bid" and "asked" prices reported on such over the counter market, at
the close of business on the date of exercise as reported in the Wall Street
Journal multiplied by the quotient of (x) $7.94 divided by (y) the Series E
Conversion Price (as defined in the Company's Articles of Incorporation); or
(ii) if the Common Stock issuable upon the conversion of the Shares is not
listed on a national stock exchange or over the counter market, the Board of
Directors of the Company shall determine the fair market value per share of the
Shares in its reasonable good faith judgment.
19. Certificates for Shares; Partial Exercise. Upon the exercise of the
purchase rights evidenced by this Warrant, one or more certificates for the
Shares so purchased shall be issued to the Warrantholder as soon as practicable
thereafter. In the case of a partial exercise, unless the purchase rights
evidenced hereby have expired, the Company shall issue to the Warrantholder a
new Warrant,
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dated as of the same date as this Warrant, for the number of Shares, if any,
which remain exercisable hereunder.
20. Adjustment of Number of Shares and Warrant Price. The number and
kind of securities purchasable upon the exercise of the purchase rights
evidenced by this Warrant and the Warrant Price shall be subject to adjustment
from time to time upon the occurrence of certain events, as follows:
(i) Subdivision or Combination of Shares. If the Company at
any time while this Warrant remains outstanding and unexpired shall subdivide or
combine the class of the Company's securities purchasable upon exercise of this
Warrant, whether by way of stock split, stock dividend, recapitalization or
otherwise, the Warrant Price shall, in the case of a subdivision, be
proportionately decreased or, in the case of a combination, be proportionately
increased.
(ii) Adjustment of Number of Shares. Upon each adjustment in
the Warrant Price, the number of Shares of the class of the Company's securities
purchasable upon exercise of this Warrant shall, in the case of an increase in
the Warrant Price, be proportionately decreased or, in the case of a decrease in
the Warrant Price, be proportionately increased, in either case to the nearest
whole share.
(iii) Reorganization, Reclassification, Consolidation, Merger
or Sale. In case of any reclassification or change of outstanding securities of
the class purchasable upon exercise of this Warrant (other than as set forth in
Section 7(i)) as a result of any reorganization of the capital stock of the
Company, or any consolidation or merger of the Company with another corporation,
or the sale of substantially all of the Company's assets to another corporation,
the Company or its successor, as applicable, shall execute a new Warrant
providing that the Warrantholder shall have the right to exercise such new
Warrant for, in lieu of each share of the class of the Company's securities
theretofore purchasable upon exercise of this Warrant, the kind and amount of
shares of stock, other securities, money and property receivable upon such
reclassification or change by a holder of one share of the class of the
Company's securities theretofore purchasable upon exercise of this Warrant. Such
new Warrant shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 7. The
provisions of this Section 7(iii) shall apply similarly to successive
reclassifications and changes.
(iv) Dividends in Stock or Property. If at any time or from
time to time prior to commencement of the Exercise Period the holders of the
Company's Common Stock or of any other class of the Company's securities
purchasable upon exercise of this Warrant shall, as a class, receive or become
entitled to receive, without payment therefor, any shares of stock or other
securities of the Company, any rights or options to acquire or subscribe for any
such shares of stock or other securities, or any other property (including cash)
distributable other than as a cash dividend (collectively, a "Distribution"),
and if no adjustment is made pursuant to Section 7(i), (ii) or (iii) above with
respect to such Distribution, then in each such case, the Warrantholder shall,
upon exercise of this Warrant, be entitled to receive, in addition to the shares
otherwise purchasable upon exercise of this Warrant and without payment of any
additional consideration therefor, the amount of stock, other securities and
other property (other than cash distributed as a cash dividend) which the
Warrantholder would hold or be
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entitled to receive on the date of such exercise had the Warrantholder been the
holder of record, as of the date of such Distribution, of the shares purchased
by the Warrantholder upon such exercise.
(v) Certain Other Events. If any change in the shares of the
class of the Company's securities purchasable upon exercise of this Warrant or
any other event occurs as to which the other provisions of this Section 7 are
not strictly applicable or if strictly applicable would not fairly protect the
reasonable expectations of Warrantholder with respect to its purchase rights
under this Warrant, then the Board of Directors of the Company shall make an
adjustment in the number and class of shares purchasable under this Warrant, the
Warrant Price or the other terms and provisions of this Warrant, so as to
protect such reasonable expectations of Warrantholder by giving Warrantholder,
upon exercise of this Warrant for the same aggregate Warrant Price payable for
full exercise of this Warrant prior to such event, the total number, class and
kind of shares (or the closest then available equivalent thereto) as
Warrantholder would have owned had this Warrant been exercised prior to such
event and had Warrantholder continued to hold such shares until after the event
requiring such adjustment.
21. Notice of Adjustments. Whenever the Warrant Price or other terms of
this Warrant shall be adjusted pursuant to Section 7 hereof, the Company shall
deliver to the Warrantholder a certificate signed by the Company's chief
financial officer describing, in reasonable detail, the event requiring the
adjustment and the newly adjusted Warrant Price and, as applicable, the kind and
amount of shares of stock, other securities, money or property purchasable
hereunder after giving effect to such adjustment.
22. Fractional Shares. No fractional shares shall be issued in
connection with any exercise hereunder, but in lieu of any such fractional
shares the Company shall make a cash payment therefor in an amount equal to the
difference between the fair market value of such fractional Share as of the date
of exercise and the Warrant Price then in effect with respect to such fractional
Share.
23. Reservation of Shares. The Company covenants that it will at all
times keep available such number of authorized shares of its Series E Preferred
Stock and Common Stock issuable upon conversion of such Series E Preferred
Stock, free from all preemptive rights with respect thereto, as will be
sufficient to permit the exercise of this Warrant for the full number of Shares
specified herein. The Company further covenants that such Shares, when issued
pursuant to the exercise of this Warrant, and the Common Stock issuable upon
conversion of the Shares, when issued pursuant to such conversion, will be duly
and validly issued, fully paid and non-assessable and free from all taxes, liens
and charges with respect to the issuance thereof.
24. Rights Prior to Exercise. Prior to exercise of this Warrant, this
Warrant shall not entitle the Warrantholder to any rights of a shareholder with
respect to the Shares, including (without limitation) the right to vote such
Shares, receive preemptive rights or be notified of shareholder meetings, nor
shall this Warrant entitle such Warrantholder to any notice or other
communication concerning the business or affairs of the Company except as set
forth in Section 22 hereof.
25. Representations of Warrantholder. Warrantholder hereby represents
and warrants to the Company, with respect to its purchase of this Warrant and
the underlying securities issuable upon the
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exercise of this Warrant, that the representations and warranties made by
Warrantholder to the Company in Section 2 of the Warrant Purchase Agreement are
true and correct in all material respects as of the date of this Warrant.
26. Registration Rights. The registration rights of the Warrantholder
with respect to this Warrant and the underlying securities are set forth in the
Registration Rights Agreement dated December 1, 1989 between the Company and the
persons named therein as amended by the Twentieth Amendment to Registration
Rights Agreement, dated the date hereof, by and among the Company and the
Warrantholders set forth therein.
27. Non-Assignability and Non-Transferability of Warrant. This Warrant
is not assignable or otherwise transferable by the Warrantholder without the
prior written consent of the Company, except that Warrantholder shall be
entitled to transfer this Warrant, without the Company's consent but with prior
or concurrent written notice to the Company, to Landlord or to any partner of
Landlord or to any affiliate of Warrantholder or of Landlord or of any such
partner of Landlord (so long as the number of such partners or affiliates does
not exceed five (5) in the aggregate), subject to compliance with federal and
state securities laws and to each transferee's agreement to be bound by the
terms of the Warrant Purchase Agreement and this Warrant. The terms and
provisions of this Warrant shall inure to the benefit of, and be binding upon,
Warrantholder and the Company and their respective permitted successors and
assigns.
28. Governing Law. This Warrant shall be governed by the laws of the
State of California, excluding the conflicts of laws provisions thereof.
29. Rights and Obligations Survive Exercise of Warrant. The rights and
obligations of the Company, of the Warrantholder and of the holder of shares of
Series E Preferred Stock issued upon exercise of this Warrant, referred to in
Sections 12 and 13 shall survive the exercise of this Warrant.
30. Modification and Waiver. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the Company and the Warrantholder.
31. Notices. Any notice, request or other document required or
permitted to be given or delivered to the holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, return receipt
requested, to each such holder at its address as shown on the books of the
Company or to the Company at the address indicated therefor in the first
paragraph of this Warrant or such other address as either may from time to time
provide to the other.
32. Binding Effect on Successors. This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets in any one transaction or
series of related transactions. All of the obligations of the Company relating
to the Series E Preferred Stock issuable upon the exercise of this Warrant shall
survive
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the exercise and termination of this Warrant. All of the covenants and
agreements of the Company shall inure to the benefit of the successors and
assigns of the holder hereof.
33. Lost Warrants. The Company represents and warrants to the
Warrantholder hereof that upon receipt of evidence reasonably satisfactory to
the Company (such as an affidavit of the registered holder) of the loss, theft,
destruction, or mutilation of this Warrant and, in the case of any such loss,
theft or destruction, upon receipt of an indemnity reasonably satisfactory to
the Company, or in the case of any such mutilation upon surrender and
cancellation of such Warrant, the Company, at its expense, will make and deliver
a new Warrant, dated as of the date of the lost, stolen, destroyed or mutilated
Warrant, of like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant.
34. Lock-Up Agreement. Warrantholder hereby agrees not to sell, make
any short sale of, loan, grant any option for the purchase of, or otherwise
dispose of any of the underlying securities issuable upon exercise of this
Warrant for a period of up to 180 days after a firm commitment underwritten
initial public offering of the Company, other than a transfer or distribution to
Landlord, to any partner of Landlord, or to any affiliate of Warrantholder, of
Landlord or of any such partner of Landlord, and then only so long as such
transferee agrees in writing to be bound by the restrictions set forth in this
Section and so long as the number of any such partners or affiliates who are
transferees or distributees does not exceed five (5) in the aggregate (a
"Permitted Transfer"). Moreover, in connection with any registration of the
Company's securities, upon request of the Company or the underwriters managing
any underwritten offering of the Company's securities, Warrantholder hereby
agrees not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any underlying securities issued or
issuable upon exercise of this Warrant (other than those included in the
registration or other than a Permitted Transfer) without the prior written
consent of the Company or such underwriters, as the case may be, for such period
of time (not to exceed 180 days) from the effective date of such registration as
the Company or the underwriters may specify. Furthermore, Warrantholder hereby
agrees and consents to the entry of stop transfer instructions with the
Company's transfer agent against the transfer of the underlying securities
issuable upon exercise of the Warrant held by the Warrantholder except in
compliance with this Lock-Up Agreement.
35. Information Rights. Upon written request delivered to the Chief
Financial Officer of the Company, the Company shall provide to Warrantholder
copies of the following documents within a reasonable time after receipt of such
request and on or after such documents have been distributed or made available
to the Company's shareholders:
(i) unaudited quarterly financial statements for each quarter
(other than the Company's fourth quarter) of the Company's fiscal year since the
date of the Company's most recent audited annual financial statements;
(ii) the Company's most recent audited annual financial
statements;
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(iii) after an Initial Public Offering of the Company,
registration statements, annual reports on Form 10-K, and quarterly reports on
Form 10-Q filed with the Securities and Exchange Commission; and
(iv) letters distributed to holders of the class of the
Company's securities purchasable under this Warrant along with the Company's
quarterly and annual financial statements, as well as any proxy statements or
other information distributed to such holders in connection with any annual or
special meeting of the shareholders within the last twelve (12) months preceding
such request by Warrantholder.
36. Other Notices. If at any time the Company proposes:
(i) To declare any cash dividend upon its Common Stock or upon
any other class of its securities purchasable upon exercise of this Warrant;
(ii) To declare any dividend upon its Common Stock or upon any
other class of its securities purchasable upon exercise of this Warrant payable
in stock or make any special dividend or other distribution to the holders of
its Common Stock or to the holders of any other class of its securities
purchasable upon exercise of this Warrant;
(iii) To offer for subscription pro rata to the holders of its
Common Stock or to the holders of any other class of its securities purchasable
upon exercise of this Warrant any additional shares of stock of any class or
other rights;
(iv) To engage in any capital reorganization or
reclassification of the capital stock of the Company; or consolidation or merger
of the Company with, or sale of all or substantially all of its assets (in any
one transaction or series of related transactions) to another corporation; or
(v) To engage in a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the Warrantholder of this Warrant at the
address of such Holder as shown on the books of the Company, (a) at least twenty
(20) days' prior written notice of the date on which the books of the Company
shall close or a record shall be taken for such dividend, distribution or
subscription rights or for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, and (b) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, at least twenty (20) days' prior written notice of the date when the
same shall take place; provided, however, that the Warrantholder shall make a
best efforts attempt to respond to such notice as early as possible after the
receipt thereof. Any notice given in accordance with the foregoing clause (a)
shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of the
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applicable class of the Company's securities shall be entitled thereto. Any
notice given in accordance with the foregoing clause (b) shall also specify the
date on which the holders of the applicable class of the Company's securities
shall be entitled to exchange their shares for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, as the case may be.
37. Attorneys' Fees. In the event that any dispute arising out of or in
connection with this Warrant should result in litigation, the prevailing party
in such litigation shall be entitled to recover from the losing party all fees,
costs and expenses of enforcing any right of such prevailing party under or with
respect to this Warrant, including without limitation, reasonable fees and
expenses of attorneys and accountants, which shall include, without limitation,
all fees, costs and expenses of appeals and of enforcement of any judgment
issued in such litigation.
IN WITNESS WHEREOF, the parties have caused this Warrant to be executed
by their respective officers or managers (if applicable), thereunto duly
authorized, this 14th day of November, 1996.
SDK INCORPORATED PROBUSINESS, INC.
By: By:
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Xxxxxx X. Xxxxxx, President
Name:
-----------------------
Title:
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FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: ProBusiness, Inc.
The undersigned, the Warrantholder, hereby irrevocably elects to
exercise the purchase right represented by its Warrant for, and to purchase
thereunder, ___________, (________)(1) shares of Series E Preferred Stock of
ProBusiness, Inc. (the "Company") and herewith makes payment of
______________________ Dollars ($___________) therefor, and requests that the
certificates for such shares be issued in the name of, and delivered
to,___________, whose address is _______________.
The undersigned represents that it is acquiring such Series E Preferred
Stock for its own account for investment and not with a view to or for sale in
connection with any distribution thereof, and in order to induce the issuance of
such Series E Preferred Stock the undersigned makes to the Company the
representations and warranties set forth in Section 2 of the Warrant Purchase
Agreement between the Company and Warrantholder.
DATED:___________________
__________________________________________
(Signature must conform in all respects to
name of Warrantholder as specified on the
face of the Warrant)
__________________________________________
__________________________________________
________________
(1) Insert here the number of shares called for on the face of the Warrant
(or, in the case of a partial exercise, the portion thereof as to which
the Warrant is being exercised), in either case without making any
adjustment for additional Series E Preferred Stock or any other stock
or other securities or property or cash which, pursuant to the
adjustment provisions of the Warrant, may be deliverable upon exercise.
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