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EXHIBIT 10.06
EXECUTION COPY
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL (WHICH
MAY BE COMPANY COUNSEL) REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
WARRANT AGREEMENT
To purchase Shares of the Common Stock of
ONESOURCE HOLDING CORPORATION
Dated as of September 8, 1993 (the "Effective Date")
WHEREAS, OneSource Information Services, Inc. (the "Operating Company")
is the wholly owned subsidiary of one Source Holding Corporation (the "Company")
and the Operating Company has entered into a Loan Agreement dated as of
September 8, 1993 with Silicon Valley Bank (the "Warrantholder"); and
WHEREAS, the Company desires to grant to the Warrantholder, in
consideration for the Revolving Credit Line and the Term Loan provided to the
Operating Company under the Loan Agreement, the right to purchase shares of the
Company's Common Stock;
NOW, THEREFORE, in consideration of the Warrantholder executing and
delivering the Loan Agreement and providing the Revolving Credit Line and Term
Loan thereunder and in consideration of mutual covenants and agreements
contained herein, the Company and the Warrantholder agree as follows:
1. GRANT OF THE RIGHT TO PURCHASE STOCK.
The Company hereby grants to the Warrantholder, and the Warrantholder
is entitled, upon the terms and subject to the conditions hereinafter set forth,
a Warrant to subscribe to and purchase, from the Company, an aggregate of 10,101
fully paid and non-assessable shares ("Warrant Shares") of the Company's Common
Stock, par value $.01 per share ("Common Stock"), constituting 1% of the
Company's capital stock on a fully diluted basis on the date hereof (after
giving effect to the issuance of 81,000 shares of Common Stock and 9,000 shares
of Class P Common Stock to be issued to management of the Company after the date
hereof), at a
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purchase price of $.49 per share (the `Exercise Price"). The number and purchase
price of such Warrant Shares are subject to adjustment as provided in Section 8
hereof.
2. TERM OF THE WARRANT AGREEMENT.
Except as otherwise provided for herein, the term of this Warrant
Agreement and the right to purchase Warrant Shares as granted herein shall
commence on the Effective Date and shall be exercisable for a period of (i) ten
(10) years or (ii) five (5) years from the effective date of the Company's
initial public offering, whichever is longer. The Company shall give the
Warrantholder written notice of the Warrantholder's right to exercise purchase
rights under this Warrant Agreement in the form attached as APPENDIX I not more
than 90 days and not less than 30 days before the expiration of the term
established in this section. If such notice is not so given, the term shall
automatically be extended until 30 days after the Company gives such notice to
the Warrantholder.
3. EXERCISE OF THE PURCHASE RIGHTS.
(a) The purchase rights set forth in this Warrant Agreement are
exercisable by the Warrantholder, in whole or in part, at any time, or from time
to time, prior to the expiration of the term set forth in Section 2 above, by
tendering to the Company at its principal office a notice of exercise in the
form attached hereto as APPENDIX II (the `Notice of Exercise"), duly completed
and executed. Promptly upon receipt of the Notice of Exercise and the payment of
the purchase price in accordance with the terms set forth below, and in no event
later than twenty-one (21) days thereafter, the Company shall issue to the
Warrantholder a certificate for the number of Warrant Shares purchased and shall
execute the Notice of Exercise indicating the number of Warrant Shares which
remain subject to future purchases, if any.
The Exercise Price may be paid at the Warrantholder's election either
(i) by cash or check, or (ii) by surrender of all or a portion of the Warrant
("Net Issuance") as determined below. If the Warrantholder elects the Net
Issuance method, the Company will issue Warrant Shares in accordance with the
following formula:
X = (P)(A-B)
--------
A
Where: X = the number of Warrant Shares to be issued to the Warrantholder for
the portion of the Warrant being exercised.
P = the number of Warrant Shares requested to be exercised under this
Warrant Agreement.
A = the Fair Market Value (defined below) of one (1) share of the
Company's Common Stock.
B = the Exercise Price.
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As used herein, "Fair Market Value" of Common Stock shall mean with
respect to each share of Common Stock:
(i) if the exercise is in connection with an initial public offering,
and if the Company's Registration Statement relating to such public offering has
been declared effective by the SEC, then the initial "Price to Public" specified
in the final prospectus with respect to the offering;
(ii) if this Warrant is exercised after, and not in connection with the
Company's initial public offering, and:
(a) if traded on a securities exchange, the Fair Market Value
shall be deemed to be the average of the closing prices over a
twenty-one (21) day period ending three days before the day the Fair
Market Value of the securities is being determined; or
(b) if actively traded over-the-counter, the Fair Market Value
shall be deemed to be the average of the closing bid and asked prices
quoted on the NASDAQ system (or similar system) over the twenty-one
(21) day period ending three days before the day the Fair Market Value
of the securities is being determined;
(iii) if at any time the Common Stock is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market, the Fair
Market Value of Common Stock shall be the highest price per share which the
Company could obtain from a willing buyer (not a current employee or director)
for shares of Common Stock sold by the Company, from authorized but unissued
shares, as determined in good faith by its Board of Directors, unless the
Company shall become subject to a merger, acquisition or other consolidation
pursuant to which the Company is not the surviving party, in which case the Fair
Market Value of Common Stock shall be deemed to be the value received by the
holders of Common Stock pursuant to such merger or acquisition. The foregoing
notwithstanding, if the Warrantholder advises the Board of Directors in writing
that the Warrantholder disagrees with such determination, then the Company and
the Warrantholder 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 the Warrantholder.
(b) Upon partial exercise by either cash or Net Issuance, the
Company shall promptly issue an amended Warrant Agreement representing
the remaining number of Warrant Shares purchasable hereunder. All other
terms and conditions of such amended Warrant Agreement shall be
identical to those contained herein, including, but not limited to the
Effective Date hereof.
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4. RESERVATION OF SHARES.
(a) AUTHORIZATION AND RESERVATION OF SHARES. During the term of this
Warrant Agreement, the Company will at all times have authorized and reserved a
sufficient number of shares of its Common Stock to provide for the exercise of
the rights to purchase Warrant Shares as provided for herein.
(b) REGISTRATION OR LISTING. If any shares of Common Stock required to
be reserved hereunder require registration with or approval of any governmental
authority under any Federal or state law (other than any registration under the
Securities Act of 1933, as then in effect ("1933 Act"), or any similar Federal
statute then enforced, or any state securities law, required by reason of any
transfer involved in such conversion), or listing on any domestic securities
exchange, before such shares may be issued upon exercise of this Warrant, the
Company will, at its expense and as expeditiously as possible, use its best
efforts to cause such shares to be duly registered, listed or approved for
listing on such domestic securities exchange, as the case may be.
5. NO FRACTIONAL SHARES OR SCRIP.
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant Agreement, but in lieu of such
fractional shares the Company shall make a cash payment therefor upon the basis
of the Exercise Price then in effect.
6. NO RIGHTS AS SHAREHOLDER.
This Warrant Agreement does not entitle the Warrantholder to any voting
rights or other rights as a shareholder of the Company prior to the exercise of
this Warrant.
7. WARRANTHOLDER REGISTRY.
The Company shall maintain a registry showing the name and address of
the registered holder of this Warrant Agreement.
8. ADJUSTMENT RIGHTS.
The Exercise Price per share and the number of Warrant Shares
purchasable hereunder are subject to adjustment, as follows:
(a) MERGER AND SALE OF ASSETS. If at any time there shall be a capital
reorganization of the shares of the Company's stock (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), or a merger or consolidation of the Company with or into another
corporation when the Company is not the surviving corporation, or the sale of
all or substantially all of the Company's properties and assets to any other
person (hereinafter referred to as a "Merger Event"), then, as a part of such
Merger Event, lawful provision shall be made so that the Warrantholder shall
thereafter be entitled to receive, upon exercise of the Warrant, the number of
Warrant Shares or other securities of the successor
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corporation resulting from such Merger Event, equivalent in rights and value to
that which would have been issuable if the Warrantholder had exercised this
Warrant immediately prior to the Merger Event. In any such case, appropriate
adjustment (as determined in good faith by the Company's Board of Directors)
shall be made in the application of the provisions of this Warrant Agreement
with respect to the rights and interest of the Warrantholder after the Merger
Event to the end that the provisions of this Warrant Agreement (including
adjustments of the Exercise Price and number of Warrant Shares purchasable)
shall be applicable to the greatest extent possible.
(b) RECLASSIFICATION OF SHARES. If the Company at any time shall, by
combination, reclassification, exchange or subdivision of securities or
otherwise, change any of the securities as to which purchase rights under this
Warrant Agreement exist into the same or a different number of securities of any
other class or classes, this Warrant Agreement shall thereafter represent the
right to acquire such number and kind of securities as would have been issuable
as the result of such change with respect to the securities which were subject
to the purchase rights under this Warrant Agreement immediately prior to such
combination, reclassification, exchange, subdivision or other change.
(c) SUBDIVISION OR COMBINATION OF SHARES. If the Company at any time
shall combine or subdivide its Common Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.
(d) STOCK DIVIDENDS. If the Company at any time shall pay a dividend
payable in, or make any other distribution (except any distribution specifically
provided for in the foregoing subsections (a) or (b)) of the Company's stock,
then the Exercise Price shall be adjusted, from and after the record date of
such dividend or distribution, to that price determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction (i)
the numerator of which shall be the total number of all shares of the Company's
stock outstanding immediately prior to such dividend or distribution, and (ii)
the denominator of which shall be the total number of all shares of the
Company's stock outstanding immediately after such dividend or distribution. The
Warrantholder shall thereafter be entitled to purchase, at the Exercise Price
resulting from such adjustment, the number of Warrant Shares (calculated to the
nearest whole share) obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares issuable
upon the exercise hereof immediately prior to such adjustment and dividing the
product thereof by the Exercise Price resulting from such adjustment.
(e) ANTIDILUTION RIGHTS. Additional antidilution rights applicable to
the Common Stock purchasable hereunder are as set forth in APPENDIX III hereto.
The Company shall provide the Warrantholder with prior written notice of any
issuance of its stock or other equity security to occur after the Effective Date
of this Warrant, which notice shall include (i) the price at which such stock or
security is to be sold, (ii) the number of shares to be issued, and (iii) such
other information as necessary for Warrantholder to determine if a dilutive
event has occurred.
(f) NOTICE OF ADJUSTMENTS. If: (i) the Company shall declare any
dividend or distribution upon its stock, whether in cash, property, stock or
other securities; (ii) the Company
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shall offer for subscription pro rata to the holders of Common Stock or other
stock any additional shares of stock of any class or other rights; (iii) there
shall be any Merger Event; or (iv) there shall be any voluntary or involuntary
dissolution, liquidation or winding up of the Company; then, in connection with
each such event, the Company shall send to the Warrantholder: (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,
subscription rights (specifying the date on which the holders of Common Stock
shall be entitled thereto) or for determining rights to vote in respect of such
Merger Event, dissolution, liquidation or winding up; and (B) in the case of any
such Merger Event, dissolution, liquidation or winding up, at least twenty (20)
days' prior written notice of the date when the same shall take place (and
specifying the date on which the holders of Common Stock shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such Merger Event, dissolution, liquidation or winding up). In the case of a
public offering, the Company shall give the Warrantholder at least twenty (20)
days written notice prior to the effective date thereof.
Each such written notice shall set forth, in reasonable detail, (i) the
event requiring the adjustment, (ii) the amount of the adjustment, (iii) the
method by which such adjustment was calculated, (iv) the Exercise Price, and (v)
the number of shares subject to purchase hereunder after giving effect to such
adjustment, and shall be given by first class mail, postage prepaid, addressed
to the Warrantholder, at the address as shown on the books of the Company.
(g) TIMELY NOTICE. Failure to timely provide such notice required by
subsection (f) above shall entitle the Warrantholder to retain the benefit of
the applicable notice period notwithstanding anything to the contrary contained
in any insufficient notice received by the Warrantholder. The notice period
shall begin on the date the Warrantholder actually receives a written notice
containing all the information specified above.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
(a) RESERVATION OF WARRANT SHARES. The Warrant Shares issuable upon
exercise of the Warrant granted under this Warrant Agreement have been duly and
validly reserved and, when issued in accordance with the provisions of this
Warrant Agreement, will be validly issued, fully paid and non-assessable, and
will be free of any taxes, liens, charges or encumbrances of any nature
whatsoever; provided, however, that the Warrant Shares issuable pursuant to this
Warrant Agreement will be subject to restrictions on transfer under that certain
Stockholders Agreement of even date among the Company, the Warrantholder,
Xxxxxxx Xxxxx Venture Partners III Limited Partnership ("Xxxxxxx Xxxxx'),
Information Partners Limited Fund, L.P. ("Information Partners") and certain
other persons listed on SCHEDULE A thereto (the "Stockholders Agreement"). The
Company has made available to the Warrantholder true, correct and complete
copies of its Certificate of Incorporation and Bylaws, as amended. The issuance
of certificates for shares of Common Stock upon exercise of the Warrant
Agreement shall be made without charge to the Warrantholder for any issuance tax
or transfer-tax in respect thereof, or other cost incurred by the Company in
connection with such exercise and the related issuance of Warrant Shares.
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(b) DUE AUTHORITY. The execution and delivery by the Company of this
Warrant Agreement and the performance of all obligations of the Company
hereunder, including the issuance to Warrantholder of the right to acquire the
Warrant Shares upon exercise of the Warrant granted hereby, have been duly
authorized by all necessary corporate action on the part of the Company, and
this Warrant Agreement is not inconsistent with the Company's Certificate of
Incorporation or Bylaws, 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 indenture, mortgage, contract
or other instrument to which it is a party or by which it is bound, and this
Warrant Agreement and the Warrant evidenced hereby constitute legal, valid and
binding agreements of the Company, enforceable in accordance with their terms.
(c) CONSENTS AND APPROVALS. No consent or approval of, giving of notice
to, registration with, or taking of any other action in respect of any state,
Federal or other governmental authority or agency is required with respect to
the execution, delivery and performance by the Company of its obligations under
this Warrant Agreement, except for the filing of a notice pursuant to Regulation
D under the 1933 Act, which filing will be effective by the time required
thereby.
(d) ISSUED SECURITIES. All issued and outstanding shares of capital
stock and other securities of the Company have been duly authorized and validly
issued and are fully paid and non assessable. All outstanding shares of capital
stock and other securities of the Company were issued in full compliance with
all Federal and state securities laws. In addition:
(i) The authorized capital stock of the Company consists
of (A) 1,500,000 shares of Common Stock, of which
729,000 shares are issued and outstanding, and (B)
100,000 shares of Class P Common Stock, $.01 per
share ("Class P Common Stock"), of which 81,000
shares are issued and outstanding. The names of the
Company's officers, directors, shareholders and
holders of options, warrants and other convertible
securities (including percentage of ownership as to
shareholders and holders of options, warrants and
other convertible securities) are as set forth on
EXHIBIT A hereto.
(ii) The Company has reserved (A) 100,000 shares of Common
Stock for issuance to Lotus Development Corporation
upon the exercise of certain warrants, (B) 81,000
shares of Common Stock and 9,000 shares of Class P
Common Stock for issuance to members of management of
the Operating Company and (C) an additional 352,265
shares of Common Stock for issuance to members of
management of the Operating Company upon the exercise
of certain stock options. There are no other options,
warrants, conversion privileges or other rights
presently outstanding to purchase or otherwise
acquire any authorized but unissued shares of the
Company's capital stock or other securities of the
Company.
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(iii) In accordance with the Company's Certificate of
Incorporation, and except as otherwise set forth in
the Stockholders Agreement, no shareholder of the
Company has preemptive rights to purchase new
issuances of the Company's capital stock.
(e) INSURANCE. The Company has in full force and effect insurance
policies, with extended coverage, insuring the Company and its property and
business against such losses and risks, and in such amounts, as are customary
for corporations engaged in a similar business and similarly situated and as
otherwise may be required pursuant to the terms of any other contract or
agreement.
(f) REGISTRATION RIGHTS. The Company hereby acknowledges that the
Warrant Shares are subject to the registration rights set forth in that certain
Registration Agreement of even date among the Company, the Warrantholder,
Information Partners, Xxxxxxx Xxxxx and certain other persons listed on Schedule
B thereto (the "Registration Agreement"). Except as set forth in the
Registration Agreement, the Company is not, pursuant to the terms of any other
agreement currently in existence, under any obligation to register under the
1933 Act any of its presently outstanding securities or any of its securities
which may hereafter be issued.
(g) EXEMPT TRANSACTION. Subject to the accuracy of the Warrantholder's
representations in Section 10 hereof, the issuance of the Warrant Shares upon
exercise of this Warrant will constitute a transaction exempt from (i) the
registration requirements of Section 5 of the 1933 Act and (ii) the
qualification requirements of applicable state securities laws.
(h) COMPLIANCE WITH RULE 144. At the written request of the
Warrantholder who proposes to sell Warrant Shares issuable upon the exercise of
the Warrant in compliance with Rule 144 promulgated by the Securities and
Exchange Commission, the Company shall furnish to the Warrantholder, within ten
days after receipt of such request, a written statement confirming the Company's
compliance with the filing requirements of the Securities and Exchange
Commission as set forth in such Rule, as such Rule may be amended from time to
time.
10. REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.
This Warrant Agreement has been entered into by the Company in reliance
upon the following representations and covenants of the Warrantholder:
(a) INVESTMENT PURPOSE. The right to acquire Warrant Shares or the
Warrant Shares issuable upon exercise of the Warrant granted hereby will be
acquired for investment and not with a view to the sale or distribution of any
part thereof in violation of applicable securities laws, and the Warrantholder
has no present intention of selling or engaging in any public distribution of
the same except pursuant to a registration or exemption.
(b) PRIVATE ISSUE. The Warrantholder understands (i) that the Warrant
Shares issuable upon exercise of this Warrant are not registered under the 1933
Act or qualified under applicable
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state securities laws on the ground that the issuance contemplated by this
Warrant Agreement will be exempt from the registration and qualifications
requirements thereof, and (ii) that the Company's reliance on such exemption is
predicated on the representations set forth in this Section 10.
(c) DISPOSITION OF WARRANTHOLDER'S RIGHTS. In no event will the
Warrantholder make a disposition of any of its rights to acquire Warrant Shares
or Warrant Shares issuable upon exercise of such rights unless and until (i) it
shall have notified the Company of the proposed disposition, and (ii) if
requested by the Company, it shall have furnished the Company with an opinion of
counsel (which counsel may either be inside or outside counsel to the
Warrantholder) reasonably satisfactory to the Company and its counsel to the
effect that (A) appropriate action necessary for compliance with the 1933 Act
has been taken, or (B) an exemption from the registration requirements of the
1933 Act is available. Notwithstanding the foregoing, the restrictions imposed
upon the transferability of any of its rights to acquire Warrant Shares or
Warrant Shares issuable on the exercise of such rights do not apply to transfers
from the beneficial owner of any of the aforementioned securities to its nominee
or from such nominee to its beneficial owner, and shall terminate as to any
particular Warrant Share when (1) such security shall have been effectively
registered under the 1933 Act and sold by the holder thereof in accordance with
such registration or (2) such security shall have been sold without registration
in compliance with Rule 144 under the 1933 Act, or (3) a letter shall have been
issued to the Warrantholder at its request by the staff of the Securities and
Exchange Commission or a ruling shall have been issued to the Warrantholder at
its request by such Commission stating that no action shall be recommended by
such staff or taken by such Commission, as the case may be, if such security is
transferred without registration under the 1933 Act in accordance with the
conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions on transfer are required. Whenever the
restrictions imposed hereunder shall terminate, as hereinabove provided, the
Warrantholder or holder of a Warrant Share then outstanding as to which such
restrictions have terminated shall be entitled to receive from the Company,
without expense to such holder, one or more new certificates for the Warrant or
for such Warrant Shares not bearing any restrictive legend.
(d) FINANCIAL RISK. The Warrantholder has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment.
11. TRANSFERS. Subject to the terms and conditions contained in Section 10
hereof, this Warrant Agreement and all rights hereunder are transferable in
whole or in part by the Warrantholder and any successor transferee. The transfer
shall be recorded on the books of the Company upon receipt by the Company of a
notice of transfer in the form attached here to as APPENDIX IV (the "Transfer
Notice"), at its principal offices and the payment to the Company of all
transfer taxes and other governmental charges imposed on such transfer. The
Warrantholder hereby acknowledges that the Warrant Shares are subject to certain
restrictions on transfer set forth in the Stockholders Agreement and that such
restrictions may, in accordance with the Stockholders Agreement, be binding upon
any transferee of the Warrant.
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12. MISCELLANEOUS.
(a) EFFECTIVE DATE. The provisions of this Warrant Agreement shall be
construed and shall be given effect in all respects as if it had been executed
and delivered by the Company on the date hereof. This Warrant Agreement and the
Warrant granted hereunder and evidence hereby shall be binding upon any
successors or assigns of the Company.
(b) ATTORNEY'S FEES. In any litigation, arbitration or court proceeding
between the Company and the Warrantholder relating hereto, the prevailing party
shall be entitled to reasonable attorneys' fees and expenses and all costs of
proceedings incurred in enforcing this Warrant Agreement.
(c) GOVERNING LAW. This Warrant Agreement shall be governed by and
construed for all purposes under and in accordance with the internal laws of the
Commonwealth of Massachusetts, without giving effect to the conflicts of law
principles thereof.
(d) COUNTERPARTS. This Warrant Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(e) NOTICES. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery,
facsimile transmission (provided that the original is sent by personal delivery
or mail as hereinafter set forth) or five (5) days after deposit in the United
States mail, by registered or certified mail, addressed (i) to the Warrantholder
at 00 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, Attention:
Xxxxx X. Xxxxxxx, Vice President (and/or, if by facsimile, 617 431-9906) and
(ii) to the Company at c/o Information Partners Capital Fund L.P., Two Xxxxxx
Place, Boston, MA 02116, Attention: Xxxxx Xxxxxxx (and/or if by facsimile,
617/572-3274) or at such other address as any such party may subsequently
designate by written notice to the other party.
(f) REMEDIES. In the event of any default hereunder, the non-defaulting
party may proceed to protect and enforce its rights either by suit in equity
and/or by action at law, including but not limited to an action for damages as a
result of any such default, and/or an action for specific performance for any
default where the Warrantholder will not have an adequate remedy at law and
where damages will not be readily ascertainable. The Company expressly agrees
that it shall not oppose an application by the Warrantholder or any other person
entitled to the benefit of this Agreement requiring specific performance of any
or all provisions hereof or enjoining the Company from continuing to commit any
such breach of this Agreement.
(g) NO IMPAIRMENT OF RIGHTS. The Company will not, by amendment of its
Certificate of Incorporation or through any other means, avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate in order to
protect the rights of the Warrantholder against impairment.
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(h) SURVIVAL. The representations, warranties, covenants and conditions
of the respective parties contained herein or made pursuant to this Warrant
Agreement shall survive the execution and delivery of this Warrant Agreement.
(i) SEVERABILITY. In the event any one or more of the provisions of
this Warrant Agreement shall for any reason be held invalid, illegal or
unenforceable, the remaining provisions of this Warrant Agreement shall be
unimpaired, and the invalid, illegal or unenforceable provision shall be
replaced by a mutually acceptable valid, legal and enforceable provision, which
comes closest to the intention of the parties underlying the invalid, illegal or
unenforceable provision.
(j) AMENDMENTS. Any provision of this Warrant Agreement may be amended
by a written instrument signed by the Company and by the Warrantholder.
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OneSource Holding Corporation
Warrant Agreement
SIGNATURE PAGE
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be executed by its officers thereunto duly authorized as of the
Effective Date.
Company: ONESOURCE HOLDING CORPORATION
By: /s/ Xxxxx Xxxxxxx
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Title: President
Warrantholder: Silicon Valley Bank
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, Vice President
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APPENDIX I
NOTICE THAT WARRANT IS ABOUT TO EXPIRE
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Silicon Valley Bank
Wellesley Office Park
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
Dear:
This is to advise you that the Warrant issued to you described below
will expire on 19 .
Issuer: OneSource Holding Corporation
Issue Date: September , 1993
Class of Security Issuable: Common Stock
Exercise Price per Share:
Number of Shares Issuable:
Procedure for Exercise:
Please contact [name of contact person at (phone number)] with any
questions you may have concerning exercise of the Warrant. This is your only
notice of pending expiration.
OneSource Holding Corporation
By
--------------------------------
Its:
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APPENDIX II
NOTICE OF EXERCISE
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1. The undersigned hereby elects to purchase shares of the
Common Stock of OneSource Holding Corporation pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price of such
shares in full.
1. The undersigned hereby elects to convert the attached Warrant into
Shares/cash [strike one] in the manner specified in the Warrant. This conversion
is exercised with respect to of the Shares covered by the Warrant.
[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)
----------------------------
----------------------------
(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.
----------------------------
(Signature)
----------------------------
(Date)
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APPENDIX II, CONTINUED
ACKNOWLEDGMENT OF EXERCISE
The undersigned hereby acknowledge receipt of the
"Notice of Exercise" from Warrantholder, to purchase shares of the
Common Stock of OneSource Holding Corporation, pursuant to the terms of the
Warrant Agreement, and further acknowledges that shares remain subject
to purchase under the terms of the Warrant Agreement.
Company: OneSource Holding Corporation
By:
--------------------------------
Title:
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Date:
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APPENDIX III
ANTI-DILUTION ADJUSTMENTS
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In addition to the adjustments specified in Section 8 of the Warrant
Agreement, the Exercise Price in effect at any time and the number and kind of
Warrant Shares issuable upon exercise of the Warrant shall be subject to
adjustments from time to time upon the happening of the events hereinafter
specified. No adjustment shall be made for (i) any cash dividends, (ii) any
Warrant Shares issued or issuable upon exercise of the Warrants, (iii) shares of
Common Stock issued or issuable to Lotus Development Corporation upon the
exercise of that certain Stock Purchase Warrant of even date, (iv) up to 81,000
shares of Common Stock and 9,000 shares of Class P Common Stock issued to
members of management of the Operating Company (who are not affiliates of
Xxxxxxx Xxxxx or Information Partners), and (v) up to 352,265 additional shares
of Common Stock issued or issuable to members of management of the Operating
Company (who are not affiliates of Xxxxxxx Xxxxx or Information Partners) upon
the exercise of certain stock options. Notwithstanding any other provision of
this Agreement, the Exercise Price, as adjusted from time to time, shall not in
any event be less than the par value (if any) of the Common Stock.
(1) EXERCISE PRICE ADJUSTMENT. If, at any time after the date hereof,
the Company issues or sells any shares of Common Stock (except for issuances
subject to Section 8(d) of the Warrant Agreement) for a consideration per share
less than the Exercise Price in effect immediately prior to the time of such
issue or sale, or the Company shall issue or sell any shares of Common Stock for
a consideration per share less than the Fair Market Value immediately prior to
the time of such issue or sale (as determined under Section 3(a) of the Warrant
Agreement), then, forthwith upon such issue or sale, the Exercise Price in
effect immediately prior to such issue or sale shall thereupon be reduced to the
lower of the prices (calculated to the nearest cent) determined as follows:
(a) by dividing an amount equal to the sum of (i) the number
of shares of Common Stock outstanding immediately prior to such issue
or sale MULTIPLIED BY the then existing Exercise Price and (ii) the
consideration, if any, received by the Company upon such issue or sale,
by the total number of shares of Common Stock outstanding immediately
after such issue or sale; and
(b) by multiplying the Exercise Price in effect immediately
prior to the time of such issue or sale by a fraction, the numerator of
which shall be the sum of (i) the number of shares of Common Stock
outstanding immediately prior to such issue or sale MULTIPLIED BY the
then existing Fair Market value and (ii) the consideration, if any,
received by the Company upon such issue or sale, and the denominator of
which shall be the total number of shares of Common Stock outstanding
immediately after such issue or sale MULTIPLIED BY the existing
Exercise Price.
(2) SPECIAL RULES FOR ADJUSTING THE EXERCISE PRICE. For the purposes of
Section (1) above, the following subsections (a) to (d), inclusive, shall also
be applicable:
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(a) TREATMENT OF OPTIONS, RIGHTS, ETC. At any time the Company
grants, issues or sells (whether directly or by assumption in a merger
or otherwise) any rights to subscribe for, or any rights or options to
purchase, Common Stock or any securities convertible into or
exchangeable for Common Stock (such convertible or exchangeable
securities being herein called "CONVERTIBLE SECURITIES"), whether or
not such rights or options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, and the price per
share for which Common Stock is issuable upon the exercise of such
rights or options or upon conversion or exchange of such Convertible
Securities (determined by dividing (i) the total amount, if any,
received or receivable by the Company as consideration for the granting
of such rights or options PLUS the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the
exercise of such rights or options PLUS, in the case of any such rights
or options that relate to such Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable upon the
issue or sale of such Convertible Securities and upon the conversion or
exchange thereof, by (ii) the total maximum number of shares of Common
Stock issuable upon the exercise of such rights or options or upon the
conversion or exchange of all such Convertible Securities issuable upon
the exercise of such rights or options) is less than the Exercise Price
in effect immediately prior to the granting of such rights or options
(or less than the Fair Market Value determined as of the date of the
granting of such rights or options), then the maximum number of shares
of Common Stock issuable upon the exercise of such rights or options or
upon conversion or exchange of the maximum number of such Convertible
Securities issuable upon the exercise of such rights or options shall
be deemed to be outstanding as of the date of granting of such rights
or options and to have been issued for such price per share and the
Exercise Price shall be adjusted as of the date of the granting of such
rights or options as set forth in Section (1) above; PROVIDED, HOWEVER,
that except as provided in Section (3) below, no further adjustments of
the Exercise Price shall be made upon the actual issue of such Common
Stock or of such Convertible Securities upon exercise of such rights or
options or upon the actual issue of such Common Stock upon conversion
or exchange of such Convertible Securities.
(b) TREATMENT OF CONVERTIBLE SECURITIES. At any time the
Company issues or sells (whether directly or by assumption in a merger
or otherwise) any Convertible Securities, whether or not the rights to
exchange or convert thereunder are immediately exercisable, and the
price per share for which Common Stock is issuable upon such conversion
or exchange (determined by dividing (i) the total amount received or
receivable by the Company as consideration for the issue or sale of
such Convertible Securities PLUS the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the
conversion or exchange thereof, by (ii) the total maximum number of
shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities) is less than the Exercise Price in effect
immediately prior to the time of such issue or sale (or less than the
Fair Market Value determined as of the date of such issue or sale),
then the maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities shall be
deemed
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to be outstanding as of the date of the issue or sale of such
Convertible Securities and to have been issued for such price per share
and the Exercise Price shall be adjusted as of the date of such issue
or sale as set forth in Section (1) above; PROVIDED, HOWEVER, that (A)
except as provided in Section (3) below, no further adjustments of the
Exercise Price shall be made upon the actual issue of such Common Stock
upon conversion or exchange of such Convertible Securities and (B) if
any such issue or sale of such Convertible Securities is made upon
exercise of any rights to subscribe for or to purchase or any option to
purchase any such Convertible Securities for which adjustments of the
Exercise Price have been or are to be made pursuant to other provisions
of this Section (2), no further adjustment of the Exercise Price shall
be made by reason of such issue or sale.
(c) COMPUTATION OF CONSIDERATION. For purposes of this
APPENDIX III, in case any shares of Common Stock or Convertible
Securities or any rights or options to purchase any such Common Stock
or Convertible Securities shall be issued or sold:
(i) for cash, the consideration received
therefor shall be deemed to be the amount
received by the Company therefor, without
deduction therefrom of any expenses incurred
or any underwriting commissions or
concessions or discounts paid or allowed by
the Company in connection therewith;
(ii) for consideration other than cash, the
amount of the consideration other than cash
received by the Company shall be deemed to
be the fair value of such consideration as
reasonably determined in good faith by the
board of directors of the Company, without
deduction therefrom of any expenses incurred
or any underwriting commissions or
concessions or discounts paid or allowed by
the Company in connection therewith; and
(iii) in connection with any merger or
consolidation of another corporation into
the Company (other than any merger or
consolidation in which the previously
outstanding shares of Common Stock of the
Company shall be changed into or exchanged
for the stock or other securities of another
corporation), the amount of consideration
therefor shall be deemed to be the fair
value of the portion of the assets and
business of such merged or consolidated
corporation attributable to such Common
Stock, Convertible Securities, rights and/or
options as reasonably determined in good
faith by the board of directors of the
Company after deducting therefrom all cash
and other consideration, if any, paid by the
Company in connection with such merger or
consolidation.
In the event of any consolidation or merger of the Company in
which the Company is not the surviving corporation or in which the
previously outstanding shares of Common Stock of the Company shall be
changed into or exchanged for the stock or other securities of another
corporation or in the event of any sale of all or substantially all of
the property and assets and/or the stock of the Company for stock or
other securities of any corporation, the Warrantholder shall receive
either the stock, securities or other property and assets of the other
corporation computed on the basis of the actual exchange
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ratio on which the transaction was predicated and for a consideration
equal to the fair value (as determined in accordance with clause (iii)
above) on the date of such transaction of all such stock, securities or
other property and assets of the other corporation. If any calculation
required under the immediately preceding sentence results in adjustment
of the Exercise Price, the determination of the number of Warrant
Shares issuable upon exercise of the Warrants immediately prior to such
merger, consolidation or sale shall be made after giving effect to such
adjustment of the Exercise Price.
(d) RECORD DATE. At any time the Company takes a record of the
holders of its Common Stock for the purpose of entitling them (i) to
receive a dividend or other distribution payable in Common Stock or
Convertible Securities or (ii) to subscribe for or purchase Common
Stock or Convertible Securities, then such record date shall be deemed
to be the date of the actual issue or sale of the shares of Common
Stock deemed to have been issued or sold upon the declaration of such
dividend or the making of such other distribution or the date of the
actual granting of such right of subscription or purchase, as the case
may be.
(e) TREASURY SHARES. The number of shares of Common Stock
outstanding at any given time shall not include shares of Common Stock
directly or indirectly owned or held by or for the account of the
Company or any of its subsidiaries, and the disposition of any such
shares of Common Stock shall be considered an issue or sale of shares
of Common Stock for the purposes of this Section (2).
(3) CERTAIN READJUSTMENTS. If the purchase price provided for in any
right or option referred to in Section 2(a), or the additional consideration, if
any, payable upon the conversion or exchange of Convertible Securities referred
to in Section 2(a) or 2(b), or the rate at which any Convertible Securities
referred to in Section 2(a) or 2(b) are convertible into or exchangeable for
Common Stock, shall change or a different purchase price or rate shall become
effective at any time or from time to time (other than under or by reason of
provisions designed to protect against dilution), then, upon such change
becoming effective, the Exercise Price then in effect under the Warrant
Agreement shall thereupon be readjusted to such Exercise Price as would have
been in effect had the adjustments made upon the granting or issuance of such
rights or options or convertible Securities been made upon the basis of (i) the
issuance of the number of shares of Common Stock theretofore actually delivered
upon the exercise of such options or rights or upon the conversion or exchange
of such Convertible Securities, and the total consideration received therefor,
and (ii) the granting or issuance at the time of such change of any such
options, rights or Convertible Securities then still outstanding for the
consideration, if any, received by the Company therefor and to be received on
the basis of such changed price. On the expiration of any right or option
referred to in Section 2(a), or on the termination of any right to convert or
exchange any Convertible Securities referred to in Section 2(a) or 2(b), the
Exercise Price then in effect under the Warrant Agreement shall thereupon be
readjusted to the Exercise Price as would have been in effect had the adjustment
made upon the granting or issuance of such rights or options or Convertible
Securities been made upon the basis of the issuance or sale of only the number
of shares of Common Stock actually issued upon the exercise of such options or
rights or upon the conversion or exchange of such Convertible Securities. If the
purchase price provided
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for in any such right or option, or the rate at which any such Convertible
Securities are convertible into or exchangeable for Common Stock, shall change
at any time under or by reason of provisions with respect thereto designed to
protect against dilution, then in case of the delivery of Common Stock upon the
exercise of any such right or option or upon conversion or exchange of any such
Convertible Security, the Exercise Price then in effect shall forthwith be
decreased to such Exercise Price as would have been obtained had the adjustments
made upon the issuance of such right or option or Convertible Security never
been made as to such Common Stock and had adjustments instead been made upon the
issuance of such right or option or Convertible Security upon the basis of the
issuance of (and the total consideration received for) the shares of Common
Stock delivered as aforesaid.
(4) ADJUSTMENT IN WARRANT SHARES PURCHASABLE. Whenever the Exercise
Price is adjusted pursuant to Section (1) above, each Warrant outstanding at the
time of such adjustment shall become the right to purchase that number of
Warrant Shares obtained by multiplying the number of Warrant Shares into which
such Warrant is exercisable immediately prior to such adjustment by the Exercise
Price in effect immediately prior to the adjustment, and dividing the product so
obtained by the Exercise Price in effect immediately after such adjustment, so
that upon exercise of such Warrant for all of the Warrant Shares purchasable
thereby, the Company shall receive the same amount of consideration it would
have received if the event occasioning the adjustment had not occurred and such
Warrant were exercised with respect to all the Warrant Shares purchasable
thereby.
(5) REFLECTION OF ADJUSTMENT ON CERTIFICATES. Notwithstanding any
adjustments in the Exercise Price or the number or kind of Warrant Shares
issuable upon exercise of the Warrant, the Warrant Agreement may continue to
express the same price and number and kind of Warrant Shares as are stated in
the Warrant initially issued to the Warrantholder pursuant to the Warrant
Agreement.
(6) CERTAIN EVENTS. If (a) in the good faith opinion of the
Warrantholder, any event occurs as to which the other provisions of this
APPENDIX III are not strictly applicable but the lack of an adjustment would not
in the opinion of the Warrantholder fairly protect the purchase rights of the
Warrantholder in accordance with the basic intent and principles of such
provisions, or if strictly applicable would not fairly protect the purchase
rights of the Warrantholder in accordance with the basic intent and principles
of such provisions and (b) following notice to the Company, the Warrantholder
and the Company shall disagree as to the applicability or appropriateness of
such adjustment, then the Company shall appoint a firm of independent certified
public accountants of recognized national standing (which may be the independent
accounting firm then regularly engaged by the Company to report on the financial
statements of the Company), which shall give its opinion upon the adjustment, if
any, on a basis strictly consistent with the basic intent and principles
established in the other provisions of this APPENDIX III, necessary to preserve,
without dilution as provided for herein, the exercise rights of the
Warrantholder in accordance with this APPENDIX III. Upon receipt of such
opinion, the Company shall forthwith make the adjustments described therein,
absent manifest error.
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APPENDIX IV
TRANSFER NOTICE
(To transfer or assign the foregoing Warrant Agreement execute this
form and supply required information. Do not use this form to purchase
shares.)
FOR VALUE RECEIVED, the foregoing Warrant Agreement and all rights
evidenced thereby are hereby transferred and assigned to
(Please Print)
whose address is
Dated
-------------------------------------------
Holder's Signature
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Holder's Address
--------------------------------
--------------------------------
Signature Guaranteed:
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NOTE: The signature to this Transfer Notice must correspond with the name as
it appears on the face of the Warrant Agreement, without alteration or
enlargement or any change whatever. Officers of corporations and those
acting in a fiduciary or other representative capacity should file
proper evidence of authority to assign the foregoing Warrant Agreement.
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EXHIBIT A
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Officers, Directors, Shareholders of the Company
1. Officers of Holding:
President and Treasurer: Xxxxx Xxxxxxx
Vice President and Secretary: Xxxxx Xxxxxxx
2. Directors of Holding: Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
3. Shareholders of Holding:
(See attached Schedule)
4. Holders of Convertible Securities of Holding:
(See attached Schedule)
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ONE SOURCE CAPITALIZATION TABLE
Price/ Price/ %total before
Common Share Amount Common P Share Amount Warrants options Total $
WBVP 364,500 $0.49 $180,000 40,500 $40,00 $1,620,000 40.10% $1,800,000
Information Partners 364,500 $0.49 $180,000 40,500 $40,00 $1,620,000 40.10% $1,800,000
Lotus Development 0 $ 0 $ 0 100,000 9.90% $ 0
Silicon Valley Bank 0 $ 0 $ 0 10,101 1.00% $ 0
Xxx Xxxxxxxx* 18,000 $0.49 $ 8,889 2,000 $40,00 $ 80,000 1.98% $ 88,889
Xxxxx Xxxx* 18,000 $0.49 $ 8,889 2,000 $40,00 $ 80,000 1.98% $ 88,889
Other Senior Mgt* 18,000 $0.49 $ 8,889 2,000 $40,00 $ 80,000 1.98% $ 88,889
Other Employees 27,000 $0.49 $ 13,333 3,000 $40,00 $ 120,000 2.97% $ 133,333
Total 810,000 $0.49 $400,000 90,000 $40,00 $3,600,000 110,101 100.00$ $4,000,000
Total Equity $4,000,000 $4.44
*To be issued post-closing.
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ONE SOURCE CAPITALIZATION TABLE
Warrants Initial Options Other Options
WBVP III -0- -0- -0-
Information Partners -0- -0- -0-
Lotus Development 100,000
Silicon Valley Bank 10,101
Xxx Xxxxxxxx* 34,483 92,200
Xxxxx Xxxx* 17,241 46,100
Other Senior Mgt* 45,977 36,880
Other Employees* 51,724 27,660
Total 110,101 149,425 202,840
Warrants are exercisable at per share price of:
Initial Options are convertible at per share price of: $1.00
50% of Other Options are convertible at per share price of: $0.49
$8.89 through 1996, $11.11 through 1997 and $13.33 after 1997.
The other 50% are convertible at $13.33, $17.78 and $22.22, for the same dates.
*To be granted post-closing.
