Exhibit 4.10
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY
NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
THEREOF UNDER SUCH ACT AND LAWS OR, SUBJECT TO SECTION 5.3 HEREOF, AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE STOCK
Issuer: Internet Commerce Corporation, a Delaware corporation
Number of Shares: 40,000, subject to adjustment
Class of Stock: Class A Common Stock, $0.01 par value per share
Exercise Price: $1.39, subject to adjustment
Issue Date: May 30, 2003
Expiration Date: May 30, 2010
FOR THE AGREED UPON VALUE of $1.00, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
this Warrant is issued to SILICON VALLEY BANK (together with its successors and
permitted assigns, "Holder") by Internet Commerce 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 Notice of Exercise
form annexed hereto as Appendix 1 ("Notice of Exercise"), at the principal
office of the Company, 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or
such other office as the Company shall notify the Holder of in writing, to
purchase from the Company up to Forty Thousand (40,000) fully paid and
non-assessable shares (the "Shares") of the Company's Class A Common Stock,
$0.01 par value per share ("Common Stock"), at a purchase price per Share of
$1.39 (the "Exercise Price"). This Warrant may be exercised in whole or in part
at any time and from time to time until 5:00 PM, Eastern time, on the Expiration
Date, and shall be void thereafter. Until such time as this Warrant is exercised
in full or expires, the Exercise Price and the Shares are subject to adjustment
from time to time as hereinafter provided.
ARTICLE 1. EXERCISE.
1.1 Method of Exercise. Holder may exercise this Warrant by
delivering a duly executed Notice of Exercise 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.
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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 as follows:
X = Y (A-B)/A
where:
X = the number of Shares to be issued to the Holder.
Y = the number of Shares with respect to which
this Warrant is being exercised.
A = the Fair Market Value (as determined pursuant
to Section 1.3 below) of one Share.
B = the Exercise Price.
1.3 Fair Market Value.
1.3.1 If shares of Common Stock are traded on a nationally
recognized securities exchange or over the counter market, the fair market value
of one Share shall be the closing price of a share of Common Stock reported for
the business day immediately preceding the date of Holder's Notice of Exercise
to the Company.
1.3.2 If shares of Common Stock are not traded on a nationally
recognized securities exchange or over the counter market, the Board of
Directors of the Company shall determine the fair market value of a share of
Common Stock in its reasonable good faith judgment.
1.4 Delivery of Certificate and New Warrant. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the right
to purchase the Shares not so acquired.
1.5 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.
1.6 Assumption on Sale, Merger, or Consolidation of the Company.
1.6.1. "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
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prior to the transaction beneficially own less than a majority of the
outstanding voting equity securities of the surviving or successor entity
immediately following the transaction.
1.6.2. In connection with, and upon the closing of, any
Acquisition, and as a condition precedent thereto, the successor or surviving
entity shall assume the obligations of this Warrant, and this Warrant thereafter
shall be exercisable for the same kind and amount of shares or other securities
or property (including cash) 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 such that the product of (i) the Exercise Price
in effect immediately prior to the closing of such Acquisition, and (ii) the
number of Shares then issuable upon exercise of this Warrant, equals the product
of (i) the number of shares or other securities or property for which this
Warrant shall be exercisable immediately following the closing of such
Acquisition, and (ii) the Exercise Price in effect immediately following the
closing of such Acquisition, 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.
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a
dividend on the outstanding shares of Common Stock, payable in Common Stock or
other securities, or subdivides the outstanding Common Stock into a greater
number of shares of Common Stock, 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, 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 (other than in connection with an Acquisition),
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, or other event. The Company or
its successor shall promptly issue to Holder a new Warrant for such new
securities or other property. The new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 2 including, without limitation, adjustments to the
Exercise Price and to the number of securities or property issuable upon
exercise of the new Warrant. The provisions of this Section 2.2 shall similarly
apply to successive reclassifications, exchanges, substitutions, or other
events.
2.3 Adjustments for Combinations, Etc. If the outstanding shares of
Common Stock are combined or consolidated, by reclassification or otherwise,
into a lesser number of shares, the Exercise Price shall be proportionately
increased and the number of Shares shall be proportionately decreased.
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2.4 No Impairment. The Company shall not, by amendment of its
Certificate of Incorporation or by-laws, or through a reorganization, transfer
of assets, consolidation, merger, dissolution, issue, or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed under this Warrant by the
Company, but shall at all times in good faith assist in carrying out of all the
provisions of this Article 2 and in taking all such action as may be necessary
or appropriate to protect Holder's rights under this Article against impairment.
2.5 Fractional Shares. No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional Share interest
arises upon any exercise or conversion of this Warrant, the Company shall
eliminate such fractional Share interest by paying Holder an amount computed by
multiplying such fractional interest by the Fair Market Value (determined in
accordance with Section 1.3 above) of one Share.
2.6 Certificate as to Adjustments. Upon each adjustment of the
Exercise Price, number of Shares or class of security for which this Warrant is
exercisable, the Company at its expense shall compute such adjustment, and,
within a reasonable time, furnish Holder with a certificate of its chief
financial officer setting forth such adjustment and the facts upon which such
adjustment is based. The Company shall, upon written request, furnish Holder a
certificate setting forth the Exercise Price, number of Shares and class of
security for which this Warrant is exercisable in effect upon the date thereof
and the series of adjustments leading to such Exercise Price, number of Shares
and class of security.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents
and warrants to the Holder as follows:
(a) All Shares which may be issued upon the due exercise of this
Warrant shall, upon issuance, be duly authorized, validly issued, fully paid and
non-assessable, and free of any liens and encumbrances except for restrictions
on transfer provided for herein or under applicable federal and state securities
laws and for liens and encumbrances placed thereon by or through Holder.
(b) 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 and the conversion or exchange of
such Common Stock into or for such other securities.
3.2 Notice of Certain Events. If the Company proposes at any time
(a) to declare any dividend or distribution upon any of its Common 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
Common 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
Common Stock; or
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(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, if known, 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 Registration Under Securities Act of 1933, as amended. The
Shares issued and issuable hereunder shall have certain incidental or
"piggyback" registration rights pursuant to, and as set forth in, that certain
Registration Rights Agreement of even date herewith between the Company and
Holder. The Company represents and warrants to Holder that the Company's
foregoing grant of registration rights and its execution, delivery and
performance of the aforementioned Registration Rights Agreement (a) have been
duly authorized by all necessary corporate action of the Company's Board of
Directors and shareholders, (b) will not violate the Company's Certificate of
Incorporation or by-laws, each as amended, (c) will not violate or cause a
breach or default (or an event which with the passage of time or the giving of
notice or both, would constitute a breach or default) under any agreement,
instrument, mortgage, deed of trust or other arrangement to which the Company is
a party or by which it or any of its assets is subject or bound, and (d) do not
require the approval, consent or waiver of or by any shareholder, registration
rights holder or other third party which approval, consent or waiver has not
been obtained as of the date of issuance of this Warrant.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE HOLDER.
4.1 Purchase for Own Account. This Warrant and the Shares to be
acquired upon exercise hereof will be acquired for investment for Holder's
account, not as nominee or agent, and not with a view to sale or distribution in
violation of applicable federal and state securities laws; provided that, for
regulatory reasons, Silicon Valley Bank will transfer this Warrant to its parent
corporation, Silicon Valley Bancshares, promptly following issuance hereof.
4.2 Investment Experience. Holder understands that the purchase of
this Warrant and the Shares covered hereby involves substantial risk. Holder (a)
has experience as an investor in unregistered securities, (b) has sufficient
knowledge and experience in financial and business affairs that it is able to
evaluate the risks and merits of its investment in this Warrant and the Shares,
and (c) can bear the economic risk of such Holder's investment in this Warrant
and the Shares.
4.3 Accredited Investor. Holder is an "accredited investor" as such
term is defined in Regulation D under the Securities Act of 1933, as amended.
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ARTICLE 5. MISCELLANEOUS.
5.1 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 1.3
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.
5.2 Legends. This Warrant and the Shares 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, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH
ACT AND LAWS OR, SUBJECT TO SECTION 5.3 OF THAT CERTAIN WARRANT TO
PURCHASE STOCK ISSUED BY THE CORPORATION TO SILICON VALLEY BANK DATED AS
OF _______________, AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
5.3 Compliance with Securities Laws on Transfer. This Warrant and
the Shares 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 Silicon Valley
Bancshares or other affiliate of Holder.
5.4 Transfer Procedure. Following its receipt of this executed
Warrant, Silicon Valley Bank will transfer same in whole or in part to its
parent corporation Silicon Valley Bancshares, and thereafter Holder and/or
Silicon Valley Bancshares may, subject to Section 5.3 above, transfer all or
part of this Warrant and/or the Shares at any time and from time to time by
giving the Company notice of the portion of the Warrant and/or Shares 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).
5.5 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 mailed by first-class registered or certified mail, postage
prepaid, or sent via reputable overnight courier service, fee prepaid, at such
address as may have been furnished to the Company or the Holder,
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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.
5.6 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.
5.7 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 reasonable
costs incurred in such dispute, including reasonable attorneys' fees.
5.8 Governing Law. This Warrant shall be governed by and construed
in accordance with the laws of the State of Delaware, without giving effect to
its principles regarding conflicts of law.
5.9 No Rights as a Stockholder. Except as specifically provided in
this Warrant, Holder shall have no rights as a stockholder of the Company in
respect of the Shares issuable hereunder unless and until Holder exercises this
Warrant as to all or any of such Shares.
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IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Stock
to be executed as an instrument under seal by its duly authorized representative
as of the date first above written.
ATTEST: "COMPANY"
INTERNET COMMERCE
CORPORATION
By:____________________________________ By:________________________________
Name: Name:
Title: Title:
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APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase shares of the ____________
stock of __________________ pursuant to Section 1.1 of the attached Warrant, and
tenders herewith payment of the Exercise Price of such shares in full.
2. The undersigned hereby elects to convert the attached Warrant into
Shares in the manner specified in Section 1.2 of the attached Warrant. This
conversion is exercised with respect to ____________ of shares of the
________________________ Stock of ___________________.
[Strike paragraph that does not apply.]
3. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name as is specified below:
-------------------------------------------
(Name)
-------------------------------------------
-------------------------------------------
(Address)
4. The undersigned represents it is an "accredited investor" as
defined in Regulation D under the Securities Act of 1933, as amended and 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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