EXHIBIT 4.3
THIS WARRANT MAY NOT BE TRANSFERRED EXCEPT IN THE LIMITED
CIRCUMSTANCES SET FORTH HEREIN OR WITH THE
WRITTEN CONSENT OF THE COMPANY
Warrant for The Purchase of
Certain Securities of
DATAWARE TECHNOLOGIES, INC.
(A Delaware Corporation)
Original Issue Date: June 23, 1997
Dataware Technologies, Inc., a Delaware corporation (the "Company"), hereby
certifies that Imperial Bank, a California banking corporation, or registered
assigns permitted hereunder (the "Holder"), is entitled, subject to the terms
set forth below, to purchase from the Company, at any time or from time to time
during the Warrant Exercise Period (as hereinafter defined), that number of
shares of the Company's Common Stock, $.01 par value per share ("Common Stock")
as shall be equal to the Warrant Number (as hereinafter defined), at that price
per share of Common Stock as shall be equal to the Purchase Price (as
hereinafter defined).
1. Definitions
For the purposes of this Warrant:
"Account Balance" is defined in the Factoring Agreement.
"Credit Facility" means the revolving credit facility and factoring
arrangement being provided pursuant to the Loan Agreement and the Factoring
Agreement.
"Factoring Agreement" means the Agreement for Purchase of Receivables,
dated as of June 23, 1997, between the Company and Imperial Bank.
"Fair Market Value" means the average of the closing sale prices (if listed
on a stock exchange or quoted on the Nasdaq National Market System or any
successor thereto) or the average of the mean between the closing bid and asked
prices (if quoted on NASDAQ or otherwise publicly traded) of the Common Stock on
each of the five (5) trading days prior to the date of exercise.
"Loan Agreement" means the Security and Loan Agreement, dated June 23,
1997, between the Company and Imperial Bank, as amended and in effect from time
to time.
"Maximum Loan Amount" means the maximum principal amount of loans made by
Imperial Bank to the Company pursuant to the Loan Agreement that shall be
outstanding at any time after the original issue date of this Warrant, without
regard to any subsequent repayment or prepayment of such loans.
"Purchase Price" means, initially $3.42, subject to adjustment in
accordance with Section 3.
"Termination Date" is defined in Section 7.
"Warrant Exercise Period" means the period commencing with the original
issue date of this Warrant and ending on the Termination Date.
"Warrant Number" means, the number (calculated to the nearest 1/100th of a
share of Common Stock) equal to the quotient of (a) the Warrant Value, divided
by (b) the initial Purchase Price. The Warrant Number shall be subject to
adjustment in accordance with Section 3.
"Warrant Value" means (a) initially, $80,000, and (b) if at any time the
sum of the Maximum Loan Amount at such time, plus the Account Balance at such
time, exceeds $1,000,000, the Warrant Value in effect prior to such time, plus
$80,000. The Warrant Value shall be reduced by any portion of this Warrant (i)
that shall be exercised, or (ii) for which the Holder shall have elected the
provisions of subsection 2(c) hereof.
2. Exercise
(a) This Warrant may be exercised by the Holder, in whole or in part, by
surrendering this Warrant, with the purchase form appended hereto as Exhibit I
duly executed by such Holder, at the principal office of the Company, or at such
other office or agency as the Company may designate, accompanied by payment in
full by bank or certified check in lawful money of the United States, of the
Purchase Price payable in respect of the number of shares of Common Stock
purchased upon such exercise.
(b) Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this Warrant
shall have been surrendered to the Company as provided in subsection 2(a) above.
At such time, the person or persons in whose name or names any certificates for
or other instruments evidencing shares of Common Stock shall be issuable upon
such exercise as provided in subsection 2(d) below shall be deemed to have
become the holder or holders of record of the Common Stock represented by such
certificates or other instruments.
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(c) (i) The Holder may at its sole option and in lieu of paying the
Purchase Price pursuant to subsection 2(a) hereof, exchange this
Warrant in whole or in part for a number of shares of Common Stock as
determined below. Such shares of Common Stock shall be issued by the
Company to the Holder without payment by the Holder of any exercise
price or any cash or other consideration. The number of shares of
Common Stock to be so issued to the Holder shall be equal to the
quotient obtained by dividing (A) the Surrendered Value (as defined
below) on the date of surrender of this Warrant pursuant to subsection
2(a) by (B) the Fair Market Value on the Exchange Date of one share of
Common Stock.
(ii) For the purposes of this subsection 2(c), the "Surrendered
Value" of a portion of this Warrant on a given date shall be deemed to
be the difference between (A) the aggregate Fair Market Value of the
number of shares of Common Stock otherwise issuable upon exercise of
such portion of the Warrant, minus (B) the aggregate Purchase Price of
such number of shares of Common Stock.
(d) As soon as practicable after the exercise of this Warrant in full or
in part, and in any event within three (3) business days thereafter, the Company
at its expense will cause to be issued in the name of, and delivered to, the
Holder, or, subject to the terms and conditions hereof, as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full shares
of Common Stock to which such Holder shall be entitled upon such
exercise, plus, in lieu of any fractional share to which such Holder
would otherwise be entitled, cash in an amount determined pursuant to
Section 3 hereof, and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the
aggregate on the face or faces thereof for the number of shares of
Common Stock equal (without giving effect to any adjustment therein)
to the Warrant Number minus the number of such shares of Common Stock
purchased by the Holder upon such exercise.
3. Adjustments, Fractional Securities
(a) If, at any time after the original issue date of this Warrant, the
outstanding Common Stock shall be subdivided into a greater number of shares or
a dividend in Common Stock shall be paid in respect of Common Stock, the
Purchase Price in effect immediately prior to such subdivision or at the record
date of such dividend shall simultaneously with the effectiveness of such
subdivision or immediately after the record date of such dividend be
proportionately and equitably reduced. If, at any time after the original issue
date of this Warrant, the outstanding Common Stock
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shall be combined into a smaller number of shares, the Purchase Price in effect
immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately and equitably increased.
When any adjustment is required to be made in the Purchase Price, the number of
shares of Common Stock purchasable upon the exercise of this Warrant shall be
changed to the number determined by dividing (i) an amount equal to the number
of shares of Common Stock issuable upon the exercise of this Warrant immediately
prior to such adjustment, multiplied by the Purchase Price in effect immediately
prior to such adjustment, by (ii) the Purchase Price in effect immediately after
such adjustment.
(b) If, at any time after the original issue date of this Warrant, there
shall occur any capital reorganization or reclassification of the Common Stock
(other than a change in par value or a subdivision or combination as provided
for in subsection 3(a) above), or any consolidation or merger of the Company
with or into another corporation, or a transfer of all or substantially all of
the assets of the Company, or the payment of a liquidating distribution, then,
as part of any such reorganization, reclassification, consolidation, merger,
sale, automatic conversion or liquidating distribution, lawful provision shall
be made so that the Holder of this Warrant shall have the right thereafter to
receive upon the exercise hereof (to the extent, if any, still exercisable) the
kind and amount of shares of stock or other securities or property which such
Holder would have been entitled to receive if, immediately prior to any such
reorganization, reclassification, consolidation, merger, sale, automatic
conversion or liquidating distribution, as the case may be, such Holder had held
the number of shares of Common Stock which were then purchasable upon the
exercise of this Warrant. In any such case, appropriate adjustment (as
reasonably determined by the Board of Directors of the Company) shall be made in
the application of the provisions set forth herein with respect to the rights
and interests thereafter of the Holder of this Warrant such that the provisions
set forth in this Section 3 (including provisions with respect to adjustment of
the Purchase Price) shall thereafter be applicable, as nearly as is reasonably
practicable, in relation to any shares of stock or other securities or property
thereafter deliverable upon the exercise of this Warrant.
(c) In any case in which this Section 3 shall require that any adjustment
in the number of shares of Common Stock or other property for which this Warrant
may be exercised be made effective as of a record date for a specified event,
the Company may elect to defer until the occurrence of such event the issuing to
the Holder with respect to the exercise of this Warrant after that record date
the Common Stock and other property, if any, issuable upon exercise over and
above the Common Stock and other property, if any, issuable upon exercise of
this Warrant as in effect prior to such adjustment, provided, however, that upon
request the Company shall deliver to the Holder a due xxxx or other appropriate
instrument evidencing the Holder's right to receive such additional shares or
property upon the occurrence of the event requiring such adjustment.
(d) When any adjustment is required to be made in the Purchase Price, the
Company shall promptly mail to the Holder a certificate setting forth the
Purchase Price and the Warrant Number after such adjustment, and setting forth a
brief
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statement of the facts requiring such adjustment. Such certificate shall
also set forth the kind and amount of stock or other securities or property into
which this Warrant shall be exercisable following the occurrence of any of the
events specified in subsection 3(a) or (b) above.
(e) The Company shall not be required upon the exercise of this Warrant to
issue any fractional shares, but shall make an adjustment therefore in cash on
the basis of the Fair Market Value of the Common Stock.
4. Limitation on Sales, etc.
The Holder, and each subsequent holder of this Warrant, if any,
acknowledges that this Warrant and the underlying shares of Common Stock have
not been registered under the Securities Act of 1933, as now in force or
hereafter amended, or any successor legislation (the "Act"), and agrees not to
sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this
Warrant or any Common Stock issued upon its exercise in the absence of (a) an
effective registration statement under the Act as to this Warrant or such
underlying shares of Common Stock and registration or qualification of this
Warrant or such underlying shares of Common Stock under any applicable Blue Sky
or state securities laws then in effect, or (b) an opinion of counsel,
satisfactory to the Company, that such registration and qualification are not
required.
Without limiting the generality of the foregoing, unless the offering and
sale of the Common Stock to be issued upon the particular exercise of the
Warrant shall have been effectively registered under the Act, the Company shall
be under no obligation to issue the shares covered by such exercise unless and
until the registered Holder shall have executed an investment letter in form and
substance reasonably satisfactory to the Company, including a warranty at the
time of such exercise that it is acquiring such shares for its own account, for
investment and not with a view to, or for sale in connection with, the
distribution of any such shares, in which event the registered Holder shall be
bound by the provisions of a legend to such effect on the certificate(s)
representing the Common Stock.
In addition, without limiting the generality of the foregoing, the Company
may delay issuance of the Common Stock hereunder until completion of any action
or obtaining of any consent, which the Company deems necessary under any
applicable law (including without limitation state securities or "blue sky"
laws), provided that the Company shall be using all reasonable efforts in good
faith to diligently pursue completion of such action or the receipt of such
consent.
5. Notices of Record Date, etc.
In case:
(a) the Company shall take a record of the holders of Common Stock for the
purpose of entitling or enabling them to receive any dividend or other
distribution, or to
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receive any right to subscribe for or purchase any shares of stock of any class
or any other securities, or to receive any other right, or
(b) of any capital reorganization of the Company, any reclassification of
the capital stock of the Company, any consolidation or merger of the Company
with or into another corporation, or any transfer of all or substantially all of
the assets of the Company, or
(c) of the voluntary or involuntary dissolution, liquidation or winding-up
of the Company, then, and in each such case, the Company will mail or cause to
be mailed to the Holder of this Warrant a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up. Such notice shall be mailed at least twenty (20) days prior to the
record date or effective date for the event specified in such notice, provided
that the failure to so mail such notice shall not affect the legality or
validity of any such action.
6. Reservation of Stock, etc.
(a) The Company will at all times reserve and keep available, solely for
issuance and delivery upon the exercise of this Warrant, such stock and other
property as from time to time shall be issuable upon the exercise of this
Warrant.
(b) The Company further covenants that it will, at its expense, prior to
the issuance of any Common Stock upon exercise of this Warrant, procure the
listing on all stock exchanges (if any) on which the Common Stock is then listed
of all such shares of Common Stock.
(c) The Company will not, by amendment of its Certificate of Incorporation
or through reorganization, consolidation, merger, dissolution, issuance of
capital stock or sale of treasury stock (otherwise than upon exercise of this
Warrant) or sale of assets, or by any other act or deed, avoid or seek to avoid
the material performance or observance of any of the covenants, stipulations or
conditions in this Warrant to be observed or performed by the Company. The
Company will at all times in good faith assist, insofar as it is able, in the
carrying out of all of the provisions of this Warrant in a reasonable manner and
in the taking of all other action which may be necessary in order to protect the
rights hereunder of the Holder of this Warrant.
(d) The Company will maintain an office where presentations and demands to
or upon the Company in respect of this Warrant may be made. The Company
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will give notice in writing to the Holder, at the address of the Holder
appearing on the books of the Company, of each change in the location of such
office.
7. Termination
This Warrant shall terminate and no longer be exercisable as of 5:00 p.m.,
Boston time, on June 23, 2004 (the "Termination Date").
8. Transfers, etc.
(a) The Company will maintain a register containing the names and
addresses of the Holders of this Warrant. The Holder may change its, his or her
address as shown on the warrant register by written notice to the Company
requesting such change.
(b) Until any transfer of this Warrant is made in the warrant register,
the Company may treat the Holder of this Warrant as the absolute owner hereof
for all purposes.
9. Replacement of Warrants
Upon 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) upon delivery of an indemnity agreement (with surety if
reasonably required) in an amount reasonably satisfactory to the Company, or (in
the case of mutilation) upon surrender and cancellation of this Warrant, the
Company will issue, in lieu thereof, a new Warrant of like tenor.
10. Mailing of Notices, etc.
All notices and other communications from the Company to the Holder of this
Warrant shall be mailed by first-class certified or registered mail, postage
prepaid, to the address furnished to the Company in writing by the last Holder
of this Warrant who shall have furnished an address to the Company in writing.
All notices and other communications from the Holder of this Warrant or in
connection herewith to the Company shall be mailed by first-class certified or
registered mail, postage prepaid, to the Company at its principal executive
offices, or such other address as the Company shall so notify the Holder.
11. No Rights as Stockholder
Until the exercise of this Warrant, the Holder shall not have or exercise
any rights by virtue hereof as a stockholder of the Company.
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12. Change or Waiver
Any term of this Warrant may be changed or waived only by an instrument in
writing signed by the party against which enforcement of the change or waiver is
sought.
13. Headings
The headings in this Warrant are for purposes of reference only and shall
not limit or otherwise affect the meaning of any provision of this Warrant.
14. Governing Law.
The validity, construction and performance of this Warrant will be governed
by and construed in accordance with the laws of The State of Delaware applicable
to contracts executed in and performed entirely within such State, without
reference to any choice of law principles of such State. With respect to any
suit, action or other proceeding arising out of this Agreement, or any other
transaction contemplated thereby, the parties hereto expressly waive any right
they may have to a jury trial and agree that any proceeding hereunder shall be
tried by a judge without a jury.
DATAWARE TECHNOLOGIES, INC.
By:_______________________
[Corporate Seal]
ATTEST:
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EXHIBIT A
PURCHASE FORM
To:
The undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby irrevocably elects either (i) to purchase shares of
Common Stock covered by such Warrant and herewith makes payment of $ ,
representing the full purchase price for such shares at the Purchase Price per
share provided for in such Warrant, or (ii) to surrender $_________________ of
the current Warrant Value of such Warrant in exchange for the number of shares
of Common Stock determined pursuant to Section 2(c) thereof.
By:______________________________
Dated:
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EXHIBIT B
ASSIGNMENT FORM
For Value Received, the undersigned hereby sells, assigns and transfers
unto: the right to purchase Common Stock represented by this
Warrant to the extent of shares, and does hereby irrevocably
constitute and appoint , attorney-in-fact to transfer the same
on the books of the Company with power of substitution in the premises.
By:_____________________
Dated:
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