EXHIBIT 4.4
THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON THE EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE
OFFERED FOR SALE, SOLD OR OTHERWISE DISPOSED OF FOR VALUE UNLESS A REGISTRATION
STATEMENT HAS BECOME EFFECTIVE WITH RESPECT TO SUCH WARRANT OR SECURITIES UNDER
THE SECURITIES ACT AND SUCH STATE SECURITIES LAWS OR IN THE OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY THERE IS AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS OR SUCH REGISTRATION IS NOT OTHERWISE REQUIRED.
[FORM OF]
THE ULTIMATE SOFTWARE GROUP, INC.
WARRANT
Dated as of [2002/2003]
No:
THIS IS TO CERTIFY THAT, for value received, (the "Holder")
is entitled to purchase from The Ultimate Software Group, Inc., a Delaware
corporation (the "Company"), prior to 5:00 p.m., New York City time
on [2006/2007] (the "Expiration Date"), at the offices of the
Company, up to shares (each a "Share" and collectively, the
"Shares") of common stock, par value $0.01 per share ("Common Stock"), of the
Company at an exercise price of $4.00 per Share (subject to adjustment pursuant
to Article III, the "Exercise Price"), upon the terms and conditions as
hereinafter provided.
Certain terms used in this Warrant are defined in Article IV.
ARTICLE I
EXERCISE OF WARRANT
1.1 METHOD OF EXERCISE. To exercise this Warrant in whole or in part,
the Holder shall deliver to the Company (a) this Warrant, (b) a written notice,
in substantially the form of the Subscription Notice attached hereto as EXHIBIT
A, of such Holder's election to exercise this Warrant, which notice shall
specify the number of Shares to be purchased (in lots of not less than 10,000
Shares), the denominations of the Share certificate or certificates desired and
the name or names in which such certificates are to be registered and (c)
payment in immediately available funds or certified check of the Exercise Price
multiplied by the number of Shares to be purchased upon such exercise (the
"Aggregate Exercise Price") UNLESS the Holder elects in the Subscription Notice
to exercise the Warrant (or a portion thereof) by authorizing the Company to
withhold from issuance and apply as payment of the Aggregate Exercise Price such
number of Shares otherwise issuable upon such exercise of the Warrant which,
when multiplied by the Market Price (as defined below) of the Shares as of the
date such Subscription Notice is received by the Company, is equal to the
Aggregate Exercise Price (and such withheld Shares shall no longer be issuable
under this Warrant).
1
The Company shall as promptly as practicable, and in any event within
five Business Days after receipt of the Subscription Notice, execute and deliver
or cause to be executed and delivered, in accordance with such notice, a
certificate or certificates representing the aggregate number of Shares to which
the Holder is entitled. The Share certificate or certificates so delivered shall
be in such denominations as may be specified in such notice and shall be issued
in the name of the Holder or such other name or names as shall be designated in
such notice. Such certificate or certificates shall be deemed to have been
issued, and the Holder or any other person so designated to be named therein
shall be deemed for all purposes to have become holders of record of such
Shares, as of the date the aforementioned notice is received by the Company. If
this Warrant shall have been exercised only in part, unless this Warrant shall
have expired, the Company shall, at the time of delivery of the certificate or
certificates, deliver to the Holder a new Warrant evidencing the rights to
purchase the remaining Shares called for by this Warrant, which new Warrant
shall in all other respects be identical to this Warrant. The Company shall pay
all expenses, taxes and other charges payable in connection with the
preparation, issuance and delivery of Share certificates and new Warrants,
except that, if Share certificates shall be registered in a name or names other
than the name of the Holder, funds sufficient to pay all transfer taxes payable
as a result of such transfer shall be paid by the Holder at the time of
delivering the aforementioned notice of exercise or promptly upon receipt of a
written request of the Company for payment.
1.2 VESTING OF WARRANT. This Warrant is fully vested and exercisable as
of the date hereof.
1.3 SHARES TO BE FULLY PAID AND NONASSESSABLE; RESERVATION. All Shares
issued upon the exercise of this Warrant shall be validly issued, fully paid and
nonassessable and the Company shall at all times reserve and keep available out
of its authorized shares of Common Stock, solely for the purpose of issuance
upon the exercise of this Warrant, such number of Shares as shall be issuable
upon the exercise hereof.
1.4 NO FRACTIONAL SHARES TO BE ISSUED. The Company shall not be
required to issue fractions of Shares upon exercise of this Warrant. If any
fraction of a Share would, but for this Section, be issuable upon any exercise
of this Warrant, in lieu of such fractional Share the Company shall pay to the
Holder, in cash, an amount equal to the same fraction of the Market Price per
Share of outstanding Shares at the close of business on the Business Day
immediately prior to the date of such exercise.
1.5 SHARE LEGEND. Each certificate for Shares issued upon exercise of
this Warrant, unless at the time of exercise such Shares are registered under
the Securities Act, shall bear the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT
BE OFFERED FOR SALE, SOLD OR OTHERWISE DISPOSED OF FOR VALUE UNLESS A
REGISTRATION STATEMENT HAS BECOME EFFECTIVE WITH RESPECT TO SUCH
SECURITIES UNDER THE SECURITIES ACT AND SUCH STATE SECURITIES LAWS OR
2
IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE CORPORATION
THERE IS AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR SUCH
REGISTRATION IS NOT OTHERWISE REQUIRED.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a registration statement under the
Securities Act) shall also bear such legend unless the holder of such
certificate shall have delivered to the Company an opinion of counsel, in
writing and addressed to the Company (which counsel and opinion shall be
reasonably acceptable to the Company), that the securities represented thereby
need no longer be subject to restrictions on resale under the Securities Act or
any state securities laws.
ARTICLE II
TRANSFER AND
REPLACEMENT OF WARRANTS
2.1 NO TRANSFER. Except as provided herein, the Holder of this Warrant,
by its acceptance hereof, covenants and agrees that neither this Warrant nor any
interest herein may be sold, transferred, pledged or hypothecated. Neither the
Shares issuable upon exercise hereof nor any interest therein may be offered,
sold, transferred, pledged, hypothecated or otherwise disposed of, except
pursuant to (i) an effective registration statement under the Securities Act and
any applicable state securities laws or (ii) an exemption from the registration
requirements of the Securities Act and any applicable state securities laws,
such exemption to be evidenced by such documentation as the Company may
reasonably request, including an opinion of counsel, in writing and addressed to
the Company (which counsel and opinion shall be reasonably satisfactory to the
Company), that such transfer is not in violation of the Securities Act and any
applicable state laws. The Company shall treat the Holder, or the transferee of
the Holder as permitted hereunder, as the holder and owner hereof for all
purposes.
2.2 LOSS, THEFT, DESTRUCTION OF WARRANT CERTIFICATES. Upon receipt of
evidence 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, upon receipt of indemnity or security satisfactory to the Company,
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Company, at the Holder's expense, will make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor
and representing the right to purchase the same aggregate number of Shares.
3
ARTICLE III
ADJUSTMENT PROVISIONS
3.1 ADJUSTMENTS GENERALLY. In the event of a reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger or
consolidation, or the sale, conveyance, lease or other transfer by the Company
of all or substantially all of its property, or any other change in the
corporate structure or shares of the Company, pursuant to any of which events
the then outstanding shares of Common Stock are split up or combined, or are
changed into, become exchangeable at the holder's election for, or entitle the
holder thereof to, other shares of stock, or in the case of any other
transaction described in Section 424(a) of the Internal Revenue Code of 1986,
the Board of Directors of the Company shall change the number and kind of Shares
(including by substitution of shares of another corporation) subject to this
Warrant and/or the Exercise Price in the manner that it shall reasonably deem to
be equitable and appropriate.
Notwithstanding anything herein to the contrary, upon a Change of
Control in which shares of Common Stock are converted into cash, securities or
other property, this Warrant shall be terminated and the Holder shall receive,
with respect to each Share issuable under this Warrant at such time, a payment
in cash equal to the excess of the Change of Control Price (as defined below) of
the Share over the Exercise Price. For purposes of this section, "Change of
Control Price" shall mean the average fair market value (as determined by the
Board of Directors in good faith) of such cash, securities and other property
received, in connection with the Change of Control, by holders of Common Stock
with respect to each share of Common Stock.
3.2 NOTICE OF ADJUSTMENT. Within thirty (30) days after any action is
taken which requires an adjustment or readjustment pursuant to this Article III,
the Company shall give written notice to the Holder of such event, and, if
determinable, the required adjustment and the computation thereof. If the
required adjustment is not determinable at the time of such written notice, the
Company shall give written notice to the Holder of such adjustment and
computation promptly after such adjustment becomes determinable.
ARTICLE IV
DEFINITIONS
The following terms, as used in this Warrant, have the following
respective meanings:
"BUSINESS DAY" means each day in which banking institutions in New York
City are not required or authorized by law or executive order to close.
"CHANGE OF CONTROL" means:
(i) The consummation of any consolidation or merger of the
Company pursuant to which the stockholders of the Company immediately
prior to the merger or consolidation do not represent, immediately
4
after the merger or consolidation, the beneficial owners (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934 (the
"Exchange Act")) of 50% or more of the combined voting power of the
Company's (or the surviving entity's) then outstanding securities
ordinarily having the right to vote (other than rights occurring in
special circumstances) in the election of directors;
(ii) The consummation of any sale, lease, exchange or transfer
(in any single transaction or series of related transactions) of all or
substantially all of the assets or business of the Company and its
Subsidiaries; or
(iii) The occurrence of any event the result of which is that
any "person" (as such term is used in Sections 13(d)(3) and 14(d)(2) of
the Exchange Act), other than (A) the Company or any Subsidiary, or (B)
any employee benefit plan sponsored by the Company or any Subsidiary,
shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of securities of the Company representing more
than 50% of the combined voting power of the Company's then outstanding
securities ordinarily having the right to vote (other than rights
accruing in special circumstances) in the election of directors, as a
result of a tender, leveraged buyout or exchange offer, open market
purchases, privately negotiated purchases, other arrangements or
understandings or otherwise.
"COMPANY" shall have the meaning set forth in the first paragraph of
this Warrant.
"EXERCISE PRICE" shall have the meaning set forth in the first
paragraph of this Warrant.
"EXPIRATION DATE" shall have the meaning set forth in the first
paragraph of this Warrant.
"HOLDER" shall have the meaning set forth in the first paragraph of
this Warrant.
"MARKET PRICE" means, as of any date, (i) if shares of Common Stock are
listed on a national securities exchange, the average of the closing sale prices
per share therefor on the largest securities exchange on which such shares are
traded on the last ten (10) trading days before such date, (ii) if such shares
are listed on the Nasdaq National Market but not on any national securities
exchange, the average of the closing sales prices per share therefor on the
Nasdaq National Market on the last ten (10) trading days before such date, (iii)
if such shares are not listed on either a national securities exchange or the
Nasdaq National Market, the average of the sales prices per share therefor on
the last twenty (20) trading days before such date or, (iv) if no such sales
prices are available, the parties hereto agree for the purposes of this Warrant
5
that the current Market Price shall be as determined by an investment banking or
appraisal firm of recognized national standing mutually agreed upon by the
Company and the Holder.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" shall have the meaning set forth in the first paragraph of
this Warrant.
"SUBSIDIARY" means any corporation of which 50 percent or more of the
combined voting power of all classes of stock is owned by the Company or a
Subsidiary of the Company.
ARTICLE V
MISCELLANEOUS
5.1 EXPIRATION. This Warrant shall expire and be of no further force
and effect on the Expiration Date.
5.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given upon receipt by the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
if to the Company, to:
The Ultimate Software Group, Inc.
0000 Xxxxxxxx Xxx
Xxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. XxxxXxxxxxx, Xx.
Telecopy: (000) 000-0000
if to the Holder, to:
Facsimile:
6
5.3 AMENDMENTS. The provisions of this Warrant may be amended, modified
or waived with (and only with) the written consent of the Company and the
Holder.
5.4 GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CHOICE OF
LAW PRINCIPLES.
5.5 SURVIVAL OF AGREEMENTS. All covenants and agreements made by the
parties herein shall be considered to have been relied upon by each party and
shall survive the issuance and delivery of this Warrant, and shall continue in
full force and effect so long as this Warrant is outstanding.
5.6 SUCCESSOR AND ASSIGNS. All covenants, stipulations, promises and
agreements in this Warrant contained by or on behalf of the Company shall bind
its successors and assigns, whether so expressed or not.
5.7 WITHHOLDING. The Company shall be entitled to withhold any amounts
required to be withheld under applicable law from any amounts to be paid to the
Holder hereunder.
5.8 SEVERABILITY. In case any one or more of the provisions contained
in this Warrant shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
5.9 SECTION HEADINGS. The section headings used herein are for
convenience of reference only, are not part of this Warrant and are not to
affect the construction of or be taken into consideration in interpreting this
Warrant.
5.10 NO RIGHTS AS STOCKHOLDER. This Warrant shall not entitle the
Holder to any rights as a stockholder of the Company and no dividends shall be
payable or accrue in respect of this Warrant or the interest represented hereby
or the Shares underlying this Warrant exercisable hereunder unless and until and
only to the extent this Warrant shall be exercised.
5.11 NO REQUIREMENT TO EXERCISE. Nothing contained in this Warrant
shall be construed as requiring the Holder to exercise this Warrant.
5.12 COUNTERPARTS This Warrant may be executed in two or more
counterparts, all of which shall be considered one and the same instrument.
7
IN WITNESS WHEREOF, the Company has executed this Warrant as of the
date first above written.
THE ULTIMATE SOFTWARE GROUP, INC.
By:
----------------------------------------------
Name: Xxxxx Xxxxxx
Title: President and Chief Executive Officer
Acknowledged and Agreed
to this [2002/2003]
--------------------------------
8
EXHIBIT A
SUBSCRIPTION NOTICE
(To be executed upon exercise of Warrant)
To: The Ultimate Software Group, Inc.
The undersigned hereby irrevocably elects to exercise the
right of purchase represented by the attached Warrant for, and to purchase
thereunder, ____________ Shares, as provided for therein, and either (xxxx one
with an X) ____tenders herewith payment of the Aggregate Exercise Price in
immediately available funds or ____ authorizes the Company to withhold from
issuance a number of Shares issuable upon such exercise of the Warrant which
when multiplied by the Market Price of the Shares as of the date such
Subscription Notice is received by the Company is equal to the Aggregate
Exercise Price (failure to indicate a method of payment shall be deemed an
election to pay the Aggregate Exercise Price in immediately available funds).
Please issue a certificate or certificates for such Shares in
the following name or names and denominations:
If said number of Shares shall not be all the Shares issuable
upon exercise of the attached Warrant, a new Warrant is to be issued in the name
of the undersigned for the balance remaining of such Shares less any fraction of
a Share paid in cash.
Dated:
[ ]
By:
--------------------------------------
Name:
Title:
9
