EXHIBIT 4.7
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"). NEITHER THIS WARRANT NOR SUCH SHARES MAY BE TRANSFERRED UNLESS THE
WARRANT OR SUCH SHARES ARE REGISTERED UNDER THE ACT OR THE COMPANY IS PROVIDED
WITH AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IN FORM AND SUBSTANCE
THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT IS AVAILABLE.
DATAWARE TECHNOLOGIES, INC.
COMMON STOCK PURCHASE WARRANT
(40,000 SHARES)
Dataware Technologies, Inc., a Delaware corporation (the "Company"), hereby
certifies that, for value received, Sovereign Hill Software, Inc. ("Sovereign
Hill") or its assigns, is entitled, subject to the terms set forth below, to
purchase from the Company at any time or from time to time after the date hereof
and before 5:00 P.M., Boston time, on the fifth anniversary of the date of
initial issuance of this Warrant (the "Termination Date"), up to Forty Thousand
(40,000) fully paid and nonassessable shares of common stock, $.01 par value, of
the Company ("Common Stock"), at a purchase price per share of $6.00 (such
purchase price per share as adjusted from time to time as herein provided is
referred to herein as the "Purchase Price"). The number and character of such
shares of Common Stock and the Purchase Price are subject to adjustment as
provided herein.
As used herein the following terms,unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include Dataware Technologies, Inc. and any
corporation that shall succeed or assume the obligations of Dataware
Technologies, Inc. hereunder.
(b) The terms "Warrant" or "Warrants" mean this Warrant and any other warrant
or warrants issued in exchange or substitution for, or upon partial exercise of,
this Warrant.
(c) The term "Warrant Shares" means the shares of Common Stock issued or
issuable upon exercise of this Warrant and, following subdivision of this
Warrant, shall include the shares issued or issuable upon exercise of all
successor Warrants; provided that for purposes of Section 10, regarding
registration, and Section 15.1, regarding amendments, such term shall not
include any such shares that have been sold in a public sale.
(d) The term "Market Price" of the Common Stock means the average of the
closing prices of sales of a share of Common Stock on all domestic securities
exchanges (including the Nasdaq National Market) on which the Common Stock may
at the time be listed, or, if there have been no sales on any such exchange on
any day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day such security is not so
listed, the average of the representative bid and asked prices quoted in the
Nasdaq System as of 4:00 P.M., New York time, on such day, or, if on any day
such security is not quoted in the Nasdaq System, the average of the highest bid
and lowest asked prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau, Incorporated, or any similar
successor organization, in each such
1
case averaged over a period of 21 trading days ending with the last trading day
before the day as of which "Market Price" is being determined. If at any time
such security is not listed on any domestic securities exchange or quoted in the
Nasdaq System or the domestic over-the-counter market, the "Market Price" shall
be the fair value thereof as of such time if and as determined in good faith by
the Company's Board of Directors.
1. EXERCISE OF WARRANT. Subject to Section 12, this Warrant may be exercised
-------------------
in full or in part by the holder hereof by surrender of this Warrant to the
Company at its principal office, with the subscription form at the end hereof
duly executed by such holder, accompanied by either (a) payment in cash or by
certified or official bank check payable to the order of the Company in the
amount of the aggregate Purchase Price for the number of shares of Common Stock
designated by the holder in the subscription form or (b) a written notice to the
Company that the holder is exercising this Warrant (or a portion thereof) by
authorizing the Company to withhold from issuance a number of shares of Common
Stock issuable upon such exercise of this Warrant that, when multiplied by the
Market Price of the Common Stock, is equal to the aggregate Purchase Price (and
such withheld shares shall no longer be issuable under this Warrant). On any
partial exercise the Company at its expense will forthwith issue and deliver to
or upon the order of the holder hereof a new Warrant or Warrants of like tenor,
in the name of the holder hereof or as such holder (upon compliance with
Sections 11 and 12 and payment by such holder of any applicable transfer taxes)
may request, calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock for which this Warrant may still be exercised.
2. DELIVERY OF STOCK CERTIFICATES, ETC., ON EXERCISE. As soon as practicable
-------------------------------------------------
after the exercise of this Warrant in full or in part, and in any event within
10 days thereafter, the Company at its expense (including the payment by it of
any applicable issue taxes) will cause to be issued in the name of and delivered
to the holder hereof, or as such holder (upon compliance with Sections 11 and 12
and payment by such holder of any applicable transfer taxes) may direct, a
certificate or certificates for the number of fully paid and nonassessable
shares of Common Stock to which such holder shall be entitled on such exercise.
3. NOTICE OF RECORD DATE. In case the Company shall take a record of the
---------------------
holders of its Common Stock (or other stock or securities at the time
deliverable upon the exercise of this Warrant) for the purpose of entitling or
enabling them to receive any dividend or other distribution, or to 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, then and in each such case the
Company will mail or cause to be mailed to the Registered Holder of this Warrant
a notice specifying 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. Such notice shall be mailed at least ten
(10) business days before the record date or effective date for the event
specified in such notice.
4. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
----------------------------------------------------------
4.1 In case at any time or from time to time, the Company shall (a) effect
a reorganization, (b) consolidate with or merge into any other person, or (c)
transfer all or substantially all of its properties or assets to any other
person under any plan or
2
arrangement contemplating the dissolution of the Company, then, in each such
case, the holder of this Warrant, on the exercise hereof as provided in Section
1 at any time after the consummation of such reorganization, consolidation or
merger or the effective date of such dissolution, as the case may be (but not
later than the Termination Date), shall receive, in lieu of the Common Stock
issuable on exercise before such consummation or such effective date, the stock
and other securities and property (including cash) to which such holder would
have been entitled upon such consummation or in connection with such
dissolution, as the case may be, if such holder had so exercised this Warrant
immediately prior thereto, all subject to further adjustment thereafter as
provided in Section 5.
4.2 Upon any reorganization, consolidation, merger or transfer (and any
dissolution following any transfer) referred to in this Section 4, this Warrant
shall continue in full force and effect until the Termination Date and the terms
hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company.
5. ADJUSTMENT UPON EXTRAORDINARY EVENTS. In the event that the Company shall
------------------------------------
(i) issue additional shares of Common Stock as a dividend or other distribution
on outstanding Common Stock, (ii) subdivide its outstanding shares of Common
Stock, or (iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock, then, in each such event, the Purchase Price
shall, simultaneously with the happening of such event, be adjusted by
multiplying the then Purchase Price by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately before such event and
the denominator of which is the number of shares of Common Stock outstanding
immediately after such event, and the product so obtained shall thereafter be
the Purchase Price. Upon any such adjustment, the holder of this Warrant shall
thereafter, upon the exercise hereof as provided in Section 1, be entitled to
receive that number of shares of Common Stock determined by multiplying the
number of shares of Common Stock issuable upon exercise hereof immediately
before such adjustment by a fraction, the numerator of which is the Purchase
Price that was in effect immediately before such adjustment, and the denominator
of which is the Purchase Price in effect on the date of such exercise.
6. NOTIFICATION AS TO ADJUSTMENTS. In each case of any adjustment or
------------------------------
readjustment in the Purchase Price and shares of Common Stock issuable on the
exercise of the Warrants, the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the holder of this Warrant at
his or its address registered on the books of the Company, which notice shall
state the Purchase Price resulting from such adjustment and the increased or
decreased, if any, number of shares purchasable at such price upon the exercise
of this Warrant, setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based.
7. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS. The Company
------------------------------------------------------------
will at all times reserve and keep available,
3
solely for issuance and delivery on the exercise of the Warrants, all shares of
Common Stock from time to time issuable upon the exercise of the Warrants.
8. EXCHANGE OF WARRANTS. On surrender for exchange of any Warrant, properly
--------------------
endorsed, to the Company, the Company at its expense will issue and deliver to
or on the order of the holder thereof a new Warrant or Warrants of like tenor,
in the name of such holder or as such holder (upon compliance with Sections 11
and 12 and payment by such holder of any applicable transfer taxes) may direct,
calling in the aggregate on the face or faces thereof for the number of shares
of Common Stock called for on the face or faces of the Warrant or Warrants so
surrendered.
9. REPLACEMENT OF WARRANTS. On receipt of evidence reasonably satisfactory to
-----------------------
the Company of the loss, theft, destruction or mutilation of any Warrant and, in
the case of any such loss, theft or destruction of any Warrant, on delivery of
an indemnity agreement or security satisfactory in form and amount to the
Company in its sole discretion or, in the case of any such mutilation, on
surrender and cancellation of such Warrant, the Company at its expense will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
10. REGISTRATION OF WARRANT SHARES.
------------------------------
10.1 Registration Requirement. The Company will, within 45 days after the
------------------------
Company receives a written request from the holders of not less than fifty
percent (50%) of the Warrant Shares that the Company effect a registration of
not less than fifty percent (50%) of the Warrant Shares under the Act on Form S-
3 (or successor Form providing for incorporating substantially all information
about the Company by reference from other SEC filings), if the Company is then
eligible to register the resale of such securities on such Form, the Company
will (a) give notice of such request to all other holders of record of Warrant
Shares and (b) within 45 days of such request, file a Registration Statement on
such Form covering all Warrant Shares that any of such holders shall (within 20
days after the Company's notice) request be registered, and will use its
reasonable efforts to cause such registration statement to become effective
thereafter and to remain effective until the second anniversary of the first
date on which any of the Warrants were exercised (the "Termination Date").
Notwithstanding the foregoing, if the Company is not eligible to register the
resale of such securities on such Form within such time, the Company will file
such registration statement promptly after it again becomes so eligible,
whereupon the other provisions of this Section 10 shall apply. The Buyer shall
not be obligated to file more than one registration statement pursuant to this
Section 10.1 Subject to receipt of the transferee's agreement described in
Section 12, the Company will amend such registration statement within a
reasonable time after request to include the names of any permitted transferee
of the Warrant Shares as selling stockholders. Each holder of Warrant Shares
being registered on such registration statement (the "Selling Holders") shall,
as a condition thereof, provide the Company with all such information about such
holder and his or its proposed method of distribution as the Company shall
reasonably request to comply with the provisions of the Act and the rules of the
SEC thereunder.
10.2 Registration Procedures. In connection with any registration
-----------------------
statement filed under Section 10.1, the Company shall:
(a) furnish to the Selling Holders such numbers of copies of a
4
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of the registered Warrant Shares owned by
them;
(b) notify each Selling Holder at any time when a prospectus relating
to such shares is required to be delivered under the Act as a result of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, whereupon each such Selling Holder shall refrain
from selling any Warrant Shares pursuant to such registration statement until
the Company shall have filed such amendment or supplement to such registration
statement and the prospectus used in connection with such registration statement
as may be necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement;
(c) cause all such registered Warrant Shares to be registered (if not
exempt) under the blue sky laws of any state reasonably requested by a Selling
Holder and to be listed on each securities exchange or national market on which
similar securities issued by the Company are then listed; and
(d) pay all expenses of such registration, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company (but not for any
Selling Holder) , blue sky fees and expenses, and the expense of any special
audits incident to or required by any such registration (but excluding
discounts, selling commissions and fees and stock transfer taxes applicable to
the securities registered by a Selling Holder).
10.3 Indemnification.
---------------
(a) The Company will indemnify each Selling Holder, each of its
officers and directors and partners and each Person controlling any such Persons
within the meaning of Section 15 of the Act, and each underwriter, if any, and
each Person who controls any underwriter within the meaning of Section 15 of the
Act, against all expenses, claims, losses, damages and liabilities (or actions
in respect thereof), including any of the foregoing incurred in the
investigation or settlement of any litigation, commenced or threatened, arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement, prospectus, offering
circular or other document, or any amendment or supplement thereto, incident to
any such registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, not misleading, or any violation by
the Company of any rule or regulation promulgated under the Act or any state
securities laws applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration, qualification
or compliance, and will reimburse each such Selling Holder, each of its officers
and directors and each Person controlling any such Persons, each such
underwriter and each Person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action;
provided that the
5
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability, expense, or violation arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission, made in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Selling Holder or underwriter, or
any action or inaction required of any Selling Holder in connection therewith.
(b) Each Selling Holder will indemnify the Company, each of its
directors and officers, each underwriter, if any, of the Company's securities
covered by such a registration statement, each Person who controls the Company
or such underwriter within the meaning of Section 15 of the Act, and each other
such Person whose securities are covered by such registration statement, each of
its officers and directors and each Person controlling such selling
securityholder within the meaning of Section 15 of the Act, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by such Selling Holder of any rule or
regulation promulgated under the Act or any state securities laws applicable to
such Selling Holder and relating to action or inaction required of such Selling
Holder in connection with any such registration, qualification or compliance,
and will reimburse the Company, such other selling securityholders, such
directors, officers, underwriters or control Persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by such Selling
Holder for use therein or such violation arises out of any action or inaction
required of such Selling Holder in connection therewith; provided, however, that
-------- -------
the obligation of such Selling Holder hereunder shall be limited to an amount
equal to the gross proceeds received by such Selling Holder upon the sale of the
Warrant Shares sold by such Selling Holder in the offering covered by such
registration.
(c) Each party entitled to indemnification under this Section 10.3
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld). The Indemnified Party may participate in such defense at such
party's expense; provided, however, that the Indemnifying Party shall bear the
expense of such defense of the Indemnified Party if representation of both
parties by the same counsel would be inappropriate due to actual or potential
conflicts of interest (as determined in good faith by the Indemnified Party).
The failure of any Indemnified Party to give notice as
6
provided herein shall not relieve the Indemnifying Party of its obligations
under this Agreement unless the failure to do so materially prejudices the
Indemnifying Party. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
(d) If the indemnification provided for in this Section 10.3 is
unavailable or insufficient to hold harmless an Indemnified Party, then each
Indemnifying Party shall contribute to the amount paid or payable to such
Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in this Section 10.3 an amount or additional amount, as the case may
be, in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party or parties on the one hand and the Indemnified Party on the
other in connection with the statements or omissions which resulted in such
losses, claims, demands or liabilities as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Indemnifying Party or parties on the one hand or the
Indemnified Party on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid to an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this Section 10.3(d) shall be deemed to include any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any action or claim that is the subject of this Section 10.3. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
11. COMPLIANCE WITH SECURITIES LAWS. This Warrant has been issued in reliance
-------------------------------
on the representations and agreements set forth herein and may be exercised,
transferred or exchanged only in compliance with the Act. This Warrant may only
be exercised by, and Common Stock issued to, a person who provides the Company
with confirmation that such person is not acquiring such Common Stock with a
view to any offering or distribution thereof in violation of applicable
securities laws. Any holder by accepting this Warrant represents to the Company
that the Warrant is acquired without a view to any offering or distribution in
violation of applicable securities laws. Each holder of this Warrant agrees
that he or it will not offer, sell or otherwise dispose of this Warrant or the
shares of Common Stock issuable upon exercise hereof except in circumstances
that will not result in a violation of the Act or any applicable laws relating
to the sale of securities, and such holder agrees to provide the Company with
such documentation as the Company shall deem necessary to demonstrate that such
offer, sale or disposition will comply with applicable securities laws. This
provision shall similarly apply to subsequent transferees of this Warrant.
12. TRANSFERS. This Warrant is issued upon the following terms, to all of which
---------
each holder or owner hereof, including each transferee, by acceptance hereof
consents and agrees.
7
12.1 This Warrant may not be transferred or subdivided into fewer than
twenty-three (23) Warrants.
12.2 Subject to Section 11, title to this Warrant may only be transferred
by endorsement (by the holder hereof executing the form of assignment at the end
hereof) and delivery in the same manner as in the case of a negotiable
instrument transferable by endorsement and delivery; provided that each
transferee executes an agreement with the Company (in the form appearing on the
form of assignment) to be bound by the obligations of a holder hereunder.
12.3 Until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.
13. NO RIGHTS AS A STOCKHOLDER. Until the exercise of this Warrant, the holder
--------------------------
hereof shall have only the rights provided herein and shall not by virtue hereof
have or exercise any voting or other rights as a stockholder of the Company.
14. NOTICES, ETC. All notices and other communications from the Company to the
------------
holder of this Warrant shall be mailed by first class registered or certified
mail, postage prepaid, at such address as may have been furnished to the Company
in writing by such holder or, until any such holder furnishes to the Company an
address, then to, and at the address of, the last holder of this Warrant who has
so furnished an address to the Company.
15. MISCELLANEOUS.
-------------
15.1 This Warrant and any term hereof may be amended, waived, discharged or
terminated only by an instrument in writing signed by the Company and the
registered holder hereof; provided that (a) amendments or waivers of any part of
Section 10 hereof shall require only the signatures of the Company and holders
of a majority of the issued or issuable Warrant Shares and (b) if this Warrant
is divided or subdivided into multiple Warrants, any such action with respect to
any other term of this Warrant shall require only the signatures of holders of
Warrants for the purchase of a majority of the Warrant Shares issuable upon
exercise of all then outstanding Warrants.
15.2 This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware. The headings in this Warrant are
for purposes of reference only, and shall not limit or otherwise affect any of
the terms hereof. This Warrant is being executed as an instrument under seal.
The invalidity or unenforceability of any provision hereof shall in no way
affect the validity or enforceability of any other provision.
8
Dated as of December 31, 1998
DATAWARE TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxxxx
---------------------------
Xxxx Xxxxxxx
Chairman and President
9
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO DATAWARE TECHNOLOGIES, INC.:
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder, _______________
shares of Common Stock of Dataware Technologies, Inc. and herewith makes payment
of $__________ therefor, and requests that the certificates for such shares be
issued in the name of, and delivered____________________________________________
to_________________________________________, whose address is___________________
________________________________________________________________________.
The undersigned confirms that he or it is not acquiring such Common Stock
with a view to any offering or distribution thereof in violation of applicable
securities laws.
Dated: _______________ .............................................
(Signature must conform to the name of holder as
specified on the face of the Warrant)
.............................................
(Address)
____________________
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto __________________________________________ the right represented by the
within Warrant to purchase ______________________ [not less than 1,000 shares
without the Company's prior written consent] shares of Common Stock of Dataware
Technologies, Inc. to which the within Warrant relates, and appoints
___________________________________ attorney to transfer such right on the books
of Dataware Technologies, Inc. with full power of substitution in the promises.
Dated: _______________ ................................................
(Signature must conform to name of the holder as
specified on the face of the Warrant)
Signed in the presence of: .............................................
(Address)
....................
The undersigned transferee agrees to be bound by
all the obligations of a holder under the Warrant.
By:_____________________________________
Typed name:
10
