EXHIBIT 2.3
NO. W98-1
THIS WARRANT AND THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT
TO RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.
WARRANT TO PURCHASE COMMON STOCK
OF
SQL FINANCIALS INTERNATIONAL, INC.
ISSUANCE DATE: February 5, 1998
This certifies that the following named Purchaser is entitled, and SQL
FINANCIALS INTERNATIONAL, INC. (the "Company"), a Delaware corporation, hereby
grants to Purchaser the option and right, subject to the terms set forth below,
to purchase from Company shares of fully paid and nonassessable Common Stock of
the Company (the "Shares") in the aggregate number (the "Number of Shares") and
at the purchase price (the "Purchase Price") set forth below at any time and
from time to time through the Termination Date, as defined below. Such Purchase
Price and number of Shares are subject to adjustment as provided in Section 2 of
this Warrant.
Name of Purchaser: Technology Ventures, L.L.C.
Address of Purchaser: Xxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Number of Shares: 200,000
Purchase Price: $5.50 per Share
1. Definitions.
-----------
As used in this Warrant, the following terms, unless the context otherwise
requires, have the following meanings:
a. "Termination Date" means 5:00 p.m. Atlanta, Georgia time on February
5, 2000.
b. "Company" includes the Company as defined above and any corporation
which shall succeed to or assume obligations of the Company under this Warrant.
c. "Note" means the promissory note dated February 5, 1998 from the
Company to the Purchaser in the principal amount of $1,100,000.00.
d. "Stock," when used with reference to stock of the Company, means
shares of the Common Stock of the Company.
e. "Warrantholder," "holder of Warrant," "holder," or similar terms when
the context refers to a holder of this Warrant, mean any person who shall at the
time be the registered holder of this Warrant.
2. Adjustment of Purchase Price and Number of Shares.
-------------------------------------------------
The number and kind of securities purchasable upon the exercise of this Warrant
and the Purchase Price shall be subject to adjustment from time to time upon the
occurrence of certain events (except for such events as to which appropriate
adjustment has been made pursuant to relevant provisions of the Amended and
Restated Certificate of Incorporation of the Company, as amended from time to
time), as follows:
a. Reclassification. In case of any reclassification, merger,
----------------
consolidation, exchange of shares, recapitalization, reorganization, change of
outstanding securities of the class issuable upon exercise of this Warrant, or
other similar event (an "Adjustment Event"), the Company shall execute a new
Warrant providing that the holder of this Warrant shall have the right to
exercise such new Warrant and procure upon such exercise such shares of stock or
other securities as may be issued or payable with respect to or in exchange for
the number of shares of Stock issuable upon exercise of this Warrant had this
Warrant been exercised immediately prior to such Adjustment Event. The Company
will use its best efforts to cause the provisions of this Warrant, as nearly as
may be practicable, to continue in effect in the new Warrant, and such new
Warrant shall provide for adjustments which shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section 2. The Company
shall not effect any transaction described in this Section 2(a) unless the
resulting successor or acquiring entity (if not the Company) agrees in writing
to assume the obligation of the Company to deliver the new Warrant. The
provisions of this subsection (a) shall similarly apply to successive Adjustment
Events.
b. Subdivision or Combination of Shares. If the Company at any time
------------------------------------
while this Warrant remains outstanding and unexpired shall subdivide or combine
its capital stock, the Purchase Price shall be proportionately decreased in the
case of a subdivision or increased in the case of a combination.
c. Stock Dividends. If the Company at any time while this Warrant is
---------------
outstanding shall pay a dividend with respect to its capital stock payable in
shares of its capital stock, or make any other distribution of its capital stock
with respect to such capital stock (except any distribution specifically
provided for in the foregoing subsections (a) or (b)), then the Purchase Price
shall be adjusted, effective from and after the date of determination of
stockholders entitled to receive such dividend or distribution, to that price
determined by multiplying the Purchase Price in effect immediately prior to such
date of determination by a fraction, (a) the numerator of which shall be the
total number of shares of its capital stock outstanding immediately prior to
such dividend or distribution (determined on a fully diluted, as converted
basis), and (b) the
-2-
denominator of which shall be the total number of shares of such capital stock
outstanding immediately after such dividend or distribution (determined as
aforesaid).
d. Non-Cash Dividends. If the Company at any time while this Warrant is
------------------
outstanding shall pay a dividend with respect to its capital stock payable in
securities other than the Company's capital stock or other non-cash property, or
make any other distribution of such securities or property with respect to such
capital stock (except any distribution specifically provided for in the
foregoing subsections (a), (b) or (c)), then this Warrant shall represent the
right to acquire such securities or property which the holder of this Warrant
would have been entitled to receive upon exercise of this Warrant, without the
payment by the holder of this Warrant of any additional consideration for such
securities or property.
e. Adjustment of Number of Shares. Upon each adjustment in the Purchase
------------------------------
Price, the number of shares of Stock purchasable hereunder shall be adjusted to
the nearest whole share, to the product obtained by multiplying the number of
Shares purchasable immediately prior to such adjustment in the Purchase Price by
a fraction, the numerator of which shall be the Purchase Price immediately prior
to such adjustment and the denominator of which shall be the Purchase Price
immediately thereafter.
f. Notice of Adjustments. Whenever the Purchase Price or the number of
---------------------
shares of Stock purchasable hereunder shall be adjusted pursuant to Section 2
hereof, the Company shall issue a certificate signed by its chief financial
officer setting forth, in reasonable detail, the event requiring the adjustment,
the amount of the adjustment, the method by which such adjustment was calculated
and the Purchase Price or number of shares purchasable after giving effect to
such adjustment, and shall cause a copy of such certificate to be mailed (by
first class mail, postage prepaid) to the holder of this Warrant.
3. Exercise Provisions.
-------------------
a. Manner of Exercise. This Warrant may be exercised in whole at any time
------------------
following its execution and delivery through the Termination Date only by the
holder of this Warrant surrendering to the Company, at its principal office in
Georgia, this Warrant, together with the exercise form attached to this Warrant
duly executed by the holder together with payment to the Company of
$1,100,000.00. The Purchase Price may be paid by the holder either by delivery
to the Company of the Note or by payment of the Purchase Price in cash.
b. Mandatory Exercise. If (i) one hundred eighty (180) days (or the next
------------------
following trading day) following the effective date of the registration
statement for the Company's initial public offering of equity securities
registered pursuant to the Securities Act of 1933, as amended (the "Six Month
IPO Date"), the Closing Price is equal to or greater than $5.50 per share, or
(ii) at any time after the Six Month IPO Date the average Closing Price on the
twenty trading days immediately preceding such date is equal to or exceeds $5.50
per share (provided that the Closing Price must have been equal or exceeded
$5.50 on at least three (3) days after the Six Month IPO Date), this Warrant
shall be deemed to have been exercised as to all 200,000 shares, and the
-3-
holder of this Warrant shall surrender it to the Company, at its principal
office in Georgia, together with the exercise form attached to this Warrant duly
executed by the holder with payment to the Company of $1,100,000.00. Such
Purchase Price may be paid by either delivery to the Company of the Note or by
payment of the Purchase Price in cash. "Closing Price" on any trading day shall
mean the last reported sale price of the Stock on the NASDAQ National Market (or
such other principal quotation system or national securities exchange on which
the Stock is admitted to trading or quoted or listed), or, if not admitted to
trading or quoted or listed on any quotation system or national securities
exchange, the average of the closing bid and asked prices of the Stock on the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similarly generally accepted reporting
service.
c. No Fractional Shares. No fractional shares will be issued upon
--------------------
exercise of rights to purchase under this Warrant. If upon any exercise of this
Warrant a fraction of a share results, the Company will pay the cash value of
that fractional share.
4. Delivery of Stock Certificates.
------------------------------
Within five (5) business days after exercise of this Warrant, the Company at
its expense will cause to be issued in the name of and delivered to the holder
of this Warrant, a certificate or certificates for the number of fully paid and
nonassessable shares of Stock to which that holder shall be entitled upon such
exercise, together with any other securities and property to which that holder
is entitled upon such exercise under the terms of this Warrant.
5. Compliance with Securities Act; Notice of Proposed Transfers; Registration
--------------------------------------------------------------------------
Rights.
------
a. Compliance with Securities Act. The holder of this Warrant, by
------------------------------
acceptance hereof, agrees that this Warrant and the Stock to be issued upon
exercise hereof are being acquired for investment and that such holder will not
offer, sell or otherwise dispose of this Warrant or any Stock to be issued upon
exercise hereof except under circumstances which will not result in a violation
of the Securities Act of 1933, as amended (the "Act"). Upon exercise of this
Warrant, the holder hereof shall confirm in writing, in a form satisfactory to
the Company, that the Stock is being acquired for investment and not with a view
toward distribution or resale (unless sale of the Stock has been registered
under the Act or an exemption therefrom is available). Any proposed transferee
of this Warrant or the Stock (except a transferee of the Stock in a registered
public offering) will be required to agree in writing to the provisions of this
Section 5. Certificates representing all Stock (unless registered under the Act)
shall be stamped or imprinted with a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933. SUCH SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN EXEMPTION THEREFROM EVIDENCED BY
-4-
AN OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO SQL
FINANCIALS INTERNATIONAL, INC. (THE "COMPANY").
TRANSFER OF SUCH SECURITIES IS SUBJECT TO RESTRICTIONS CONTAINED
IN A WARRANT PURSUANT TO WHICH THE SECURITIES WERE PURCHASED AND
THE BY-LAWS OF THE COMPANY, COPIES OF WHICH WILL BE FURNISHED ON
REQUEST WITHOUT CHARGE.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
RESTRICTIONS ON TRANSFER CONTAINED IN (1) AN AGREEMENT DATED AS
OF SEPTEMBER 1, 1995 (THE "SHAREHOLDERS' AGREEMENT") AMONG THE
COMPANY AND THE SHAREHOLDERS (AS DEFINED THEREIN) AND (2) A STOCK
PURCHASE AGREEMENT DATED AS OF SEPTEMBER 26, 1987 (THE "SERIES F
AGREEMENT"), AND MAY NOT BE SOLD, PLEDGED, TRANSFERRED,
ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE
SHAREHOLDERS' AGREEMENT AND THE SERIES F AGREEMENT. A COPY OF
THESE AGREEMENTS IS ON FILE AT THE OFFICES OF THE COMPANY AND MAY
BE OBTAINED WITHOUT CHARGE UPON WRITTEN REQUEST TO THE PRESIDENT
OF THE COMPANY.
b. Notice of Proposed Transfers. Transfer of this Warrant is restricted
----------------------------
by Section 6(e) hereof, and transfer of the Stock is restricted by (i) the by-
laws of the Company, as amended from time to time (the "By-Laws"), (ii) the
Restated Shareholders' Agreement dated as of September 1, 1995, as amended from
time to time, among the Company and its holders of Common Stock (the "Restated
Shareholders' Agreement"), and (iii) a certain Series F Convertible Preferred
Stock Purchase Agreement dated September 26, 1997 (the "Series F Agreement"), to
which the Company and Purchaser are parties. With respect to any proposed
offer, sale or other distribution of this Warrant or any of the Stock prior to
its registration under the Act, the holder of this Warrant and the holder of any
shares of the Stock to be issued upon exercise hereof shall give written notice
to this Company of such holder's intention to effect such transfer. Each such
notice shall describe the manner and circumstances of the proposed transfer in
sufficient detail and shall be accompanied by a written opinion of legal counsel
who shall be reasonably satisfactory to the Company, addressed to the Company
and reasonably satisfactory in form and substance to the Company's counsel, to
the effect that the proposed transfer does not require registration under the
Act and is in compliance with the By-Laws, the Restated Shareholders' Agreement
and the Series F Agreement. The Company, within 30 days after receipt of the
notice either shall notify such holder that such holder may dispose of the
Warrant or Stock in the manner described in the notice and the opinion of
counsel, or shall notify such holder that the Company objects to the opinion of
counsel and shall set forth the grounds for such objection. Each new certificate
representing the Warrant or Stock (except Stock sold publicly) shall bear the
appropriate restrictive legend set forth in Section 5(a), unless in the opinion
of counsel for the Company such legend is not required or advisable in order to
assure compliance with the Act
-5-
or other restrictions referred to therein, or the restrictions referred to
therein shall have been terminated, waived or otherwise ceased. The Company will
issue stop-transfer instructions with respect to any Warrant or Stock to which
the foregoing restrictions apply.
c. Registration Rights. The Stock to be issued upon exercise of this
-------------------
Warrant shall be subject to the Restated Shareholders' Agreement, and the holder
shall be entitled to the registration rights set forth in Section 7 of the
Restated Shareholders' Agreement; provided, however, that the holder shall not
-------- -------
be entitled to have any of the Stock issued upon exercise of this Warrant
included in a registration statement filed in connection with the Company's
initial public offering of its Common Stock under the Act.
6. Miscellaneous Provisions.
------------------------
a. Reservation of Stock; Issuance of Stock. The Company covenants that it
---------------------------------------
will at all times reserve and keep available, solely for issuance upon exercise
of this Warrant, all shares of Stock or other securities from time to time
issuable upon exercise of this Warrant. The Company covenants and agrees that
all Stock issued upon exercise of this Warrant shall, upon issuance and payment
therefor, be legally and validly issued and outstanding, fully paid and
nonassessable, and free from all liens, claims and charges, except (i)
restrictions imposed by applicable securities laws, the Company's Amended and
Restated Certificate of Incorporation, the Company's By-Laws, the Restated
Shareholders' Agreement, the Series F Agreement and this Warrant and (ii) any
security interests, pledges, liens, charges, claims or other encumbrances or
restrictions on transfer created by holder or other parties other than the
Company.
b. Modification. This Warrant and any of its terms may be changed,
------------
waived, or terminated by a written instrument signed by the Company and the
holder of this Warrant.
c. Replacement. 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 any indemnity agreement
or bond 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 will execute and deliver, in lieu of this Warrant, a new Warrant
of like tenor.
d. No Rights as Stockholder. No holder of this Warrant, as such, shall be
------------------------
entitled to vote or receive dividends or be considered a stockholder of the
Company for any purpose, nor shall anything in this Warrant be construed to
confer on any holder of this Warrant as such, any rights of a stockholder of the
Company or any right to vote, to give or withhold consent to any corporate
action, to receive notice of meeting of stockholders, to receive dividends or
subscription rights or otherwise.
e. Nontransferability. This Warrant may not be transferred or assigned
------------------
without the prior written consent of the Company except (i) to a person or
entity which has purchased capital stock of the Company directly from the
Company, (ii) a member, former member or affiliate of
-6-
the holder of this Warrant, or (iii) in the case of a transfer or assignment by
a stockholder of the Company who is an individual, to a member of the immediate
family (including for this purpose parents, grandparents, grandchildren,
brothers, sisters, nieces and nephews) of such stockholder, a person related by
marriage to such stockholder, or a trust for the benefit of any of the
foregoing.
f. Notices. Notices hereunder to the holder of this Warrant shall be sent
-------
by certified or registered mail to the address given to the Company by such
holder and shall be deemed given when so mailed, or if sent to a holder outside
the United States, by telecopy with a copy sent by air mail or courier.
g. Governing Law. This Warrant shall be governed by the laws of the State
-------------
of Delaware as applied to contracts entered into in Delaware between Delaware
residents.
Dated: February 5, 1998 SQL FINANCIALS INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxx, President
-7-
Form of Exercise
----------------
(To be signed only upon exercise of Warrant)
To: SQL FINANCIALS INTERNATIONAL, INC.
The undersigned holder of the attached Warrant hereby irrevocably elects to
exercise the right to purchase 200,000 shares of Common Stock of SQL FINANCIALS
INTERNATIONAL, INC. (the "Company") and herewith makes payment of $1,100,000.00
for those shares and requests that the certificate for those shares be issued in
the name of the undersigned and delivered to the address below the signature of
the undersigned. The undersigned hereby affirms the statements and covenants in
Sections 5(a) and 5(b) of the Warrant.
Dated: ____________________________________
Technology Ventures, L.L.C.
By: ____________________________________
Title: ____________________________________
Dated: ____________________________________
Technology Ventures, L.L.C.
By: ____________________________________
Signature
Address:
____________________________________
____________________________________
____________________________________
-8-
