EXHIBIT 4.1
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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: Datawatch Corporation, a Delaware corporation
Number of Shares: 70,000, subject to adjustment
Class of Stock: Common Stock
Exercise Price: $ 0.50 per share, subject to adjustment
Issue Date: January 17, 2001
Expiration Date: January 17, 2011
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for
other good and valuable consideration, this Warrant is issued to SILICON VALLEY
BANK ("Holder") by DATAWATCH CORPORATION, a Delaware corporation (the
"Company").
Subject to the terms and conditions hereinafter set forth, the Holder
is entitled upon surrender of this Warrant and the duly executed subscription
form annexed hereto as Appendix 1, at the office of the Company, 000 Xxxxx
Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxxxxx 00000-0000, or such other office as the
Company shall notify the Holder of in writing, to purchase from the Company
Seventy Thousand (70,000) fully paid and non-assessable shares (the "Shares") of
the Company's Common Stock, $.01 par value per share (the "Class"), at a
purchase price per Share of Fifty Cents ($0.50) (the "Exercise Price"). Until
such time as this Warrant is exercised in full or expires, the Exercise Price
and the number of Shares are subject to adjustment from time to time as
hereinafter provided. This Warrant may be exercised in whole or in part at any
time and from time to time until 5:00 PM, Eastern time January 17, 2011 (the
"Expiration Date").
ARTICLE 1. EXERCISE.
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1.1 Method of Exercise. Holder may exercise this Warrant by
delivering a duly executed Notice of Exercise in substantially the form attached
as Appendix 1 to the principal office of the Company. 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 the Class (or shares of the Company's stock
into which shares of the Class are convertible or exchangeable) are traded on a
nationally recognized securities exchange or over the counter market, the fair
market value of a Share shall be the closing price of a share of the Class (or
the closing price of a share of the Company's stock for which shares of the
Class are convertible or exchangeable) reported for the business day immediately
before Holder delivers its Notice of Exercise to the Company.
1.4.2 If shares of the Class (or shares of the Company's stock
into which shares of the Class are convertible or exchangeable) are not traded
on a nationally recognized securities exchange or over the counter market, the
Board of Directors of the Company shall determine fair market value 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, 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
valuation determined by 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
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 Assumption Upon 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 50.1% 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 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, and the Exercise Price and number and class of Shares
shall continue to be subject to adjustment from time to time in accordance with
the provisions hereof.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
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2.1 Stock Dividends, Splits, Etc. If the Company declares or
pays a dividend on the outstanding shares of the Class, payable in Common Stock
or other securities, or subdivides the outstanding
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Common Stock into a greater amount of Common Stock of the outstanding shares of
the Class into a greater number of shares of the Class, or subdivides the shares
of the Class in a transaction that increases the amount of Common Stock into
which such shares are convertible, then upon exercise of this Warrant, for each
Share acquired, Holder shall receive, without 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 date the dividend or subdivision occurred.
2.2 Reclassification, Exchange or Substitution. Upon any
reclassification, exchange, substitution, reorganization 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 such reclassification, exchange, substitution,
reorganization 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, reorganizations or other events.
2.3 Adjustments for Combinations, Etc. If the outstanding
shares of the Class 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 for which this Warrant is
exercisable shall be proportionately decreased.
2.4 No Impairment. The Company shall not, by amendment of the
Certificate or its 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 all of 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 the Warrant and the number of Shares to be issued
shall be rounded up to the nearest whole Share.
2.6 Certificate as to Adjustments. Upon each adjustment of the
Exercise Price, number of class of Shares or number of shares of Common Stock or
other securities for which the Shares are convertible or exchangeable, 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 and class of Shares and conversion ratio in effect upon the date
thereof and the series of adjustments leading to such Exercise Price, number and
class of Shares and conversion ratio.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
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3.1 Representations and Warranties. The Company hereby
represents and warrants to the Holder as follows:
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(a) All Shares which may be issued upon the due exercise of this Warrant, and
all Common Stock or other securities, if any, issuable upon due conversion of
the Shares, shall, upon issuance, be duly authorized, validly issued, fully paid
and non-assessable, and free of any liens and encumbrances except for
restrictions on transfer provided for herein or under applicable federal and
state securities laws.
(b) The execution and delivery by the Company of this
Warrant and the performance of all obligations of the Company hereunder,
including the issuance to Holder of the right to acquire the Shares, have been
duly authorized by all necessary corporate action on the part of the Company,
and this Warrant Agreement is not inconsistent with the Certificate and/or the
Company's by-laws, does not contravene any law or governmental rule, regulation
or order applicable to it, does not and will not contravene any provision of, or
constitute a default under, any material indenture, mortgage, contract or other
instrument to which it is a party or by which it is bound, and constitutes a
legal, valid and binding agreement of the Company, enforceable in accordance
with its terms.
(c) The authorized capital stock of the Company
consists of 21,000,000 shares, consisting of 20,000,000 shares of Common Stock,
$.01 par value per share and 1,000,000 shares of Preferred Stock, .01 par value
per share.
(d) 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 as will be
sufficient to permit the exercise in full of this Warrant.
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; or (d) to merge or consolidate with or into any other
corporation, or sell, lease, license, or convey all or substantially all of its
assets, or to liquidate, dissolve or wind up, 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; and (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).
3.3 Information Rights. So long as 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, and (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.
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ARTICLE 4. MISCELLANEOUS.
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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 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 or if (a) there is no material question as to the
availability of current information as referenced in Rule 144(c), (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.
4.4 Transfer Procedure. Subject to the provisions of Section
4.2, 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 of all notices to Holder to Silicon Valley Bank,
Treasury Department, 0000 Xxxxxx Xxxxx, XX-000, Xxxxx Xxxxx, Xxxxxxxxxx 00000.
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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 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.
"COMPANY"
ATTEST: DATAWATCH CORPORATION
By: By: /s/ Xxxxx X. Xxxxxxx
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Name: Name: Xxxxx X. Xxxxxxx
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Title: Title: President
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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.
1. 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.]
2. Please issue a certificate or certificates representing said shares
in the name of the undersigned or in such other name as is specified below:
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(Name)
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(Address)
3. 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.
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(Signature)
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(Date)
