Exhibit 4.1
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
Issuer: Dataware Technologies, Inc., a Delaware corporation
Number of Shares: 57,658, subject to adjustment
Class of Stock: Common Stock, $0.01 par value per share
Exercise Price: $3.46875 per share, subject to adjustment
Issue Date: June 9, 2000
Expiration Date: June 9, 2007
THIS WARRANT CERTIFIES THAT, for the value of $1.00 and for other good
and valuable consideration, this Warrant is issued to SILICON VALLEY BANK
("Holder") by Dataware Technologies, Inc., a Delaware corporation (the
"Company").
Subject to the terms and conditions hereinafter set forth, the Holder
is entitled upon exercise of this Warrant to purchase from the Company up to
Fifty Seven Thousand Six Hundred Fifty Eight (57,658) fully paid and
non-assessable shares (the "Shares") of the Company's common stock, $0.01 par
value per share ("Common Stock") at a purchase price per Share of Three Dollars
and Forty-Six and Seven-Eighths Cents ($3.46875) (the "Exercise Price"). This
Warrant may be exercised in whole or in part at any time and from time to time
until 5:00 PM, Eastern time, on the Expiration Date, and shall be void
thereafter. Until such time as this Warrant is exercised in full or expires, the
Exercise Price and the Shares are subject to adjustment from time to time as
hereinafter provided.
Article 1
EXERCISE
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1.1 Method of Exercise. Holder may exercise this Warrant by delivering
this Warrant together with a duly executed Notice of Exercise in substantially
the form attached as Appendix 1 to the principal office of the Company, Xxx
Xxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, or such other office as the Company
shall notify the Holder of in writing. Unless Holder is exercising the
conversion right set forth in Section 1.2, Holder shall also deliver to the
Company a check for the aggregate Exercise Price for the Shares being purchased.
1.2 Conversion Right. In lieu of exercising this Warrant as specified
in Section 1.1, Holder may from time to time convert this Warrant, in whole or
in part, 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 Exercise
Price of such Shares by (b) the fair market value of one Share. The fair market
value of the Shares shall be determined pursuant to Section 1.4.
1.3 Intentionally Omitted.
1.4 Fair Market Value.
1.4.1 If shares of Common Stock are traded on a nationally
recognized securities exchange or over the counter market, the fair market value
of one Share shall be the closing price of a share of Common Stock reported for
the business day immediately preceding the date of Holder's Notice of Exercise
to the Company.
1.4.2 If shares of Common Stock are not traded on a nationally
recognized securities exchange or over the counter market, the Board of
Directors of the Company shall determine the fair market value of a share of
Common Stock in its reasonable good faith judgment. The foregoing
notwithstanding, if Holder advises the Board of Directors in writing that Holder
disagrees with such determination, then the Company and Holder shall promptly
agree upon a reputable investment banking firm to undertake such valuation. If
the valuation of such investment banking firm is greater than that determined by
the Board of Directors by ten percent (10%) or more, then all fees and expenses
of such investment banking firm shall be paid by the Company. In all other
circumstances, such fees and expenses shall be paid by Holder. The determination
of any such investment banking firm shall be conclusive in any event.
1.5 Delivery of Certificate and New Warrant. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the right
to purchase the Shares not so acquired.
1.6 Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.7 Repurchase on Sale, Merger, or Consolidation of the Company.
1.7.1 "Acquisition". For the purpose of this Warrant, "Acquisition"
means any sale, transfer, exclusive license, or other disposition of all or
substantially all of the assets of the Company, or any acquisition,
reorganization, consolidation or merger of the Company where the holders of the
Company's outstanding voting equity securities immediately prior to the
transaction beneficially own less than 50.01% of the outstanding voting equity
securities of the surviving or successor entity immediately following the
transaction.
1.7.2 Assumption of Warrant. Upon the closing of any Acquisition
the successor or surviving entity shall assume the obligations of this Warrant,
and this Warrant shall be exercisable for the same securities and property as
would be payable for the Shares issuable
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upon exercise of the unexercised portion of this Warrant as if such Shares were
outstanding on the record date for the Acquisition and subsequent closing. The
Exercise Price shall be adjusted accordingly.
Article 2
ADJUSTMENTS TO THE SHARES
-------------------------
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a
dividend on the outstanding shares of Common Stock, payable in Common Stock or
other securities, or subdivides the outstanding Common Stock into a greater
amount of Common Stock, then upon exercise of this Warrant, for each Share
acquired, Holder shall receive, without additional cost to Holder, the total
number and kind of securities to which Holder would have been entitled had
Holder owned the Shares of record as of the record date for such dividend or
subdivision.
2.2 Reclassification, Exchange or Substitution. Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive, upon exercise
or conversion of this Warrant, the number and kind of securities and property
that Holder would have received for the Shares if this Warrant had been
exercised immediately before the record date for such reclassification,
exchange, substitution, or other event. The Company or its successor shall
promptly issue to Holder a new Warrant for such new securities or other
property. The new Warrant shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
2 including, without limitation, adjustments to the Exercise Price and to the
number of securities or property issuable upon exercise of the new Warrant. The
provisions of this Section 2.2 shall similarly apply to successive
reclassifications, exchanges, substitutions, or other events.
2.3 Adjustments for Combinations, Etc. If the outstanding shares of
Common Stock are combined or consolidated, by reclassification or otherwise,
into a lesser number of shares, the Exercise Price shall be proportionately
increased and the number of Shares shall be proportionately decreased.
2.4 No Impairment. The Company shall not, by amendment of its
Certificate of Incorporation or by-laws, or through a reorganization, transfer
of assets, consolidation, merger, dissolution, issue, or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed under this Warrant by the
Company, but shall at all times in good faith assist in carrying out of all the
provisions of this Article 2 and in taking all such action as may be necessary
or appropriate to protect Holder's rights under this Article against impairment.
2.5 Fractional Shares. No fractional Shares shall be issuable upon
exercise or conversion of this Warrant, and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional Share interest
arises upon exercise or conversion of this Warrant, the Company shall eliminate
such fractional Share interest by paying Holder an amount computed by
multiplying such fractional Share interest by the fair market value (as
determined pursuant to Section 1.4 above) of one Share on the date of such
exercise or conversion.
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2.6 Certificate as to Adjustments. Upon each adjustment of the Exercise
Price, number of Shares or class of security for which this Warrant is
exercisable, the Company at its expense shall promptly compute such adjustment,
and furnish Holder with a certificate of its chief financial officer setting
forth such adjustment and the facts upon which such adjustment is based. The
Company shall, upon written request, furnish Holder a certificate setting forth
the Exercise Price, number of Shares and class of security for which this
Warrant is exercisable in effect upon the date thereof and the series of
adjustments leading to such Exercise Price, number of Shares and class of
security.
Article 3
REPRESENTATIONS AND COVENANTS OF THE COMPANY
--------------------------------------------
3.1 Representations and Warranties. The Company hereby represents and
warrants to the Holder as follows:
(a) All Shares which may be issued upon the due exercise of
this Warrant shall, upon issuance, be duly authorized, validly issued, fully
paid and non-assessable, and free of any liens and encumbrances imposed by or
through the Company except for restrictions on transfer provided for herein or
under applicable federal and state securities laws.
(b) The authorized capital stock of the Company consists of
38,000,000 shares, consisting of 30,000,000 shares of Common Stock, and
8,000,000 shares of preferred stock, $0.01 par value per share, of which 300,000
shares have been designated Series A Junior Participating Preferred Stock and
3,000 Shares have been designated Series B Convertible Preferred Stock. Schedule
3.1(b) sets forth, as of June 5, 2000 and to the Company's best knowledge,
holders of five percent (5%) or more of the Company's outstanding voting equity
securities, and all outstanding options, warrants, convertible securities,
convertible debentures, and rights to acquire, subscribe for, and/or purchase
any Common Stock, preferred stock and/or other capital stock of the Company or
any securities or debentures convertible into or exchangeable for Common Stock,
preferred stock and/or other capital stock of the Company.
(c) The Company covenants that it shall at all times cause to
be reserved and kept available out of its authorized and unissued shares such
number of shares of its Common Stock, and other securities into or for which
such Common Stock may be converted or exchanged, as will be sufficient to permit
the exercise in full of this Warrant and the conversion or exchange of such
Common Stock into or for such other securities.
(d) As of the date hereof, the Exercise Price first set forth
above represents the fair market value of a share of Common Stock as determined
by the Company's Board of Directors.
3.2 Notice of Certain Events. If the Company proposes at any time (a)
to declare any dividend or distribution upon any of its capital stock, whether
in cash, property, stock, or other securities and whether or not a regular cash
dividend; (b) to offer for subscription pro rata to the holders of any class or
series of its stock any additional shares of stock of any class or series or
other rights; (c) to effect any reclassification or recapitalization of any of
its securities; (d) to
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merge or consolidate with or into any other corporation (other than any
transaction in which the holders of Common Stock will acquire no new securities
or rights therefor), or sell, lease, license, or convey all or substantially all
of its assets, or to liquidate, dissolve or wind up; or (e) offer holders of
registration rights the opportunity to participate in an underwritten public
offering of the company's securities for cash, then, in connection with each
such event, the Company shall give Holder (1) at least 20 days prior written
notice of the date on which a record will be taken for such dividend,
distribution, or subscription rights (and specifying the date on which the
holders of securities of the Company shall be entitled to receive such dividend,
distribution or rights) or for determining rights to vote, if any, in respect of
the matters referred to in (c) and (d) above; (2) in the case of the matters
referred to in (c) and (d) above at least 20 days prior written notice of the
date when the same will take place (and specifying the date on which the holders
of securities of the Company will be entitled to exchange their securities of
the Company for securities or other property deliverable upon the occurrence of
such event); and (3) in the case of the matter referred to in (e) above, the
same notice as is given to the holders of such registration rights.
3.3 Information Rights. If at any time the Company is not subject to
the reporting requirements of the Securities Exchange Act of 1934 (the "1934
Act"), as amended, or is not in compliance with its reporting requirements under
the 1934 Act, while the Holder holds this Warrant and/or any of the Shares, the
Company shall deliver to the Holder (a) promptly after mailing, copies of all
notices or other written communications to the shareholders of the Company, (b)
within one-hundred and twenty (120) days after the end of each fiscal year of
the Company, the annual audited financial statements of the Company certified by
independent public accountants of recognized standing, and (c) within forty-five
(45) days after the end of each of the first three quarters of each fiscal year,
the Company's quarterly, unaudited financial statements.
3.4 Registration Under Securities Act of 1933, as amended. The Shares
shall have certain registration rights as set forth in that certain Registration
Rights Agreement between the Company and Holder of even date herewith. The
Company represents and warrants to Holder that the Company's execution, delivery
and performance of such Registration Rights Agreement (a) has been duly
authorized by all necessary corporate action of the Company's Board of Directors
and shareholders, (b) does not and will not violate the Company's Certificate of
Incorporation or By-laws, each as amended, (c) does not and will not violate or
cause a breach or default (or an event which with the passage of time or the
giving of notice or both, would constitute a breach or default) under any
agreement, instrument, mortgage, deed of trust or other arrangement to which the
Company is a party or to or by which it or any of its assets is subject or
bound, and (d) does not require the approval, consent or waiver of or by any
shareholder, registration rights holder or other third party which approval,
consent or waiver has not been obtained as of the date of issuance of this
Warrant.
Article 4
MISCELLANEOUS
-------------
4.1 Automatic Conversion upon Expiration. In the event that, upon the
Expiration Date, the fair market value of one Share (or other security issuable
upon the exercise hereof) as
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determined in accordance with Section 1.4 above is greater than the Exercise
Price in effect on such date, then this Warrant shall automatically be deemed on
and as of such date to be converted pursuant to Section 1.2 above as to all
Shares (or such other securities) for which it shall not previously have been
exercised or converted, and the Company shall promptly deliver a certificate
representing the Shares (or such other securities) issued upon such conversion
to the Holder.
4.2 Legends. This Warrant and the Shares (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) shall be
imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO
RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
4.3 Compliance with Securities Laws on Transfer. This Warrant and the
Shares (and the securities issuable, directly or indirectly, upon conversion of
the Shares, if any) may not be transferred or assigned in whole or in part
without compliance with applicable federal and state securities laws by the
transferor and the transferee (including, without limitation, the delivery of
investment representation letters and legal opinions reasonably satisfactory to
the Company, as reasonably requested by the Company). The Company shall not
require Holder to provide an opinion of counsel if the transfer is to an
affiliate of Holder that is an "accredited investor" as defined in Rule 501 of
Regulation D under the Securities Act of 1933, as amended (the "Act") or if (a)
there is no material question as to the availability of current information as
referenced in Rule 144(c) under the Act, (b) Holder represents that it has
complied with Rule 144(d) and (e) in reasonable detail, (c) the selling broker
represents that it has complied with Rule 144(f), and (d) the Company is
provided with a copy of Holder's notice of proposed sale complying with Rule
144(h).
4.4 Transfer Procedure. Subject to the provisions of Section 4.3,
Holder may transfer all or part of this Warrant and/or the Shares issuable upon
exercise of this Warrant (or the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) at any time to Silicon Valley Bancshares
or The Silicon Valley Bank Foundation, or to any other transferee by giving the
Company notice of the portion of the Warrant being transferred setting forth the
name, address and taxpayer identification number of the transferee and
surrendering this Warrant to the Company for reissuance to the transferee(s)
(and Holder if applicable).
4.5 Notices. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or sent by electronic facsimile transmission, express overnight
courier service, or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such holder from time
to time, but in all cases, unless instructed in writing otherwise, the Company
shall deliver a copy
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of all notices to Holder to Silicon Valley Bank, Treasury Department, 3003
Tasman Drive, MS NC 821, Xxxxx Xxxxx, Xxxxxxxxxx 00000.
4.6 Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
4.7 Attorneys Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
4.8 No Rights as Stockholder. Except as specifically provided herein,
this Warrant shall not entitle Holder to any rights as a stockholder of the
Company prior to the exercise or conversion hereof, and then only to the extent
of such exercise or conversion.
4.9 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts, without giving
effect to its principles regarding conflicts of law.
ATTEST: "COMPANY"
DATAWARE TECHNOLOGIES, INC.
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------- ---------------------------
Name: /s/ Xxxxxxx Xxxxxxx Name: /s/ Xxxxxxx Xxxxxxxxx
------------------------- -------------------------
Title: Assistant Vice President Title: Chief Financial Officer
------------------------ ------------------------
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APPENDIX 1
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NOTICE OF EXERCISE
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1. The undersigned hereby elects to purchase shares of the ____________
stock of __________________ pursuant to Section 1.1 of the attached Warrant, and
tenders herewith payment of the Exercise Price of such shares in full.
2. The undersigned hereby elects to convert the attached Warrant into
Shares in the manner specified in Section 1.2 of the attached Warrant. This
conversion is exercised with respect to ____________ of shares of the
________________________ Stock of ____________________.
[Strike paragraph that does not apply.]
3. Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name as is specified below:
-------------------------------------------
(Name)
-------------------------------------------
-------------------------------------------
(Address)
4. The undersigned represents it is acquiring the shares solely for its
own account and not as a nominee for any other party and not with a view toward
the resale or distribution thereof except in compliance with applicable
securities laws.
------------------------------
(Signature)
--------------------------
(Date)
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Schedule 3.1(b) - Capitalization
---------------
As of June 5, 2000
Holders of 5% or more Outstanding Capital Stock:
Xxxx Xxxxxxx, a director of the Company
Outstanding options, warrants, convertible securities, convertible debentures,
and rights to acquire, subscribe for, and/or purchase any Common Stock,
preferred stock and/or other capital stock of the Company or any securities or
debentures convertible into or exchangeable for Common Stock, preferred stock
and/or other capital stock of the Company:
See attached chart
In addition, rights to acquire shares of Series A Junior Participating
Preferred Stock attach to all outstanding shares of Common Stock pursuant to the
Company's Shareholder Rights Plan.
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