1
EXHIBIT 4.7
NEITHER THIS WARRANT NOR THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE. THE SECURITIES REPRESENTED BY
THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION, AND NEITHER SUCH SECURITIES NOR ANY INTEREST OR PARTICIPATION
THEREIN MAY BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, ENCUMBERED OR IN ANY OTHER
MANNER TRANSFERRED OR DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS THEREOF AND IN COMPLIANCE WITH THE REGISTRATION
PROVISIONS OF APPLICABLE STATE SECURITIES OR BLUE SKY LAWS.
CAYENNE SOFTWARE, INC.
WARRANT
Dated January 2, 1997
CAYENNE SOFTWARE, INC., a Massachusetts corporation (the "Company"),
hereby certifies that, for value received, Southbrook International Investments,
Ltd., a corporation organized and existing under the laws of the British Virgin
Islands, or its registered assigns ("Holder"), is entitled, subject to the terms
set forth below, to purchase from the Company from time to time up to a total of
[ ](1) shares of Common Stock, par value $.01 per share (the "Common Stock"), of
the Company (each such share, a "Warrant Share" and all such shares, the
"Warrant Shares") at an exercise price equal to the lower of (a) [ ](2) per
share and (b) [120%, 125% and 150% for each Warrant issued, respectively] of the
average Per Share Market Value for the thirty (30) trading days immediately
following an announcement by or on behalf of the Company of an acquisition,
merger or consolidation following the date hereof, in which the Company or an
entity controlled by the Company will be the surviving entity; PROVIDED,
HOWEVER, that the price per share derived in the calculation of this clause (b)
shall only become the "Exercise Price" (defined below) upon the first such
announcement of acquisition, merger or consolidation where (x) such announcement
of acquisition, merger or consolidation occurs within one (1) year after the
Original Issue Date and (y) if such price per share is less than or equal to 90%
of the average Per Share Market Value for the thirty (30) trading days
immediately preceding such announcement (the lower of (a) and (b), as adjusted
from time to time as provided in SECTION 7, referred to herein as the "Exercise
Price"), at any time after the date hereof
- ----------------------------
(1) The number of shares per Warrant shall equal 75,000, 75,000, and 112,500,
respectively.
(2) Such exercise price shall equal [120%, 125% and 150% for each
Warrant issued, respectively] of the average Per Share Market Value (as such
term is defined in the Statement of Rights and Preferences, Exhibit A to the
Convertible Preferred Stock Purchase Agreement, dated as of the date hereof
between the Holder and the Company (the "Statement of Rights and Preferences"))
for the ten (10) Trading Days (as such term is defined in the Statement of
Rights and Preferences) immediately preceding the Original Issue Date (and in no
event less than the par value of the Common Stock).
E-70
2
and until and including January 2, [ ](1) (the "Expiration Date"), and in no
event less than the par value of the Common Stock and subject to the following
terms and conditions:
XVI. REGISTRATION OF WARRANT. The Company shall register
this Warrant, upon records to be maintained by the Company for that purpose (the
"Warrant Register"), in the name of the record Holder hereof from time to time.
The Company may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, and the Company shall not be affected
by notice to the contrary.
XVII. REGISTRATION OF TRANSFERS AND EXCHANGES.
---------------------------------------
1. The Company shall register the transfer of any portion of
this Warrant in the Warrant Register, upon surrender of this Warrant, with the
Form of Assignment attached hereto duly completed and signed, to the Company at
the office specified in or pursuant to SECTION 3(b). Upon any such registration
or transfer, a new warrant to purchase Common Stock, in substantially the form
of this Warrant (any such new warrant, a "New Warrant"), evidencing the portion
of this Warrant so transferred shall be issued to the transferee and a New
Warrant evidencing the remaining portion of this Warrant not so transferred, if
any, shall be issued to the transferring Holder.
2. This Warrant is exchangeable, upon the surrender hereof by
the Holder at the office of the Company specified in or pursuant to
SECTION 3(b) for one or more New Warrants, evidencing in the aggregate the
right to purchase the number of Warrant Shares which may then be purchased
hereunder. Any such New Warrant will be dated the date of such exchange.
XVIII. DURATION AND EXERCISE OF WARRANTS.
---------------------------------
1. This Warrant shall be exercisable by the registered Holder
on any business day before 5:00 P.M., New York time, at any time and from time
to time on or after the date hereof to and including the Expiration Date. At
5:00 P.M., New York time on the Expiration Date, the portion of this Warrant
not exercised prior thereto shall be and become void and of no value.
2. Subject to SECTIONS 2(b), 4 and 8, upon surrender of this
Warrant, with the Form of Election to Purchase attached hereto duly completed
and signed, to the Company at its office at 8 New England Executive Park,
Burlington, MA 01803, Attention: Chief Financial Officer, or at such other
address as the Company may specify in writing to the then registered Holder,
and upon payment of the Exercise Price multiplied by the number of Warrant
Shares that the Holder intends to purchase hereunder, in lawful money of the
United States of America, in cash or by certified or official bank check or
checks, all as specified by the Holder in the Form of Election to Purchase, the
Company shall promptly (but in no event later than 3 days thereafter) issue and
cause to be delivered to or upon the written order of the Holder and in such
name or names as the Holder may designate, a certificate for the Warrant Shares
issuable upon such exercise, free of restrictive legends other than legends
that may be required in the opinion of the Company's counsel in the event at
such time there is not an effective Registration Statement. Any person so
designated by the Holder to receive Warrant Shares shall be deemed to have
become holder of record of such Warrant Shares as of the Date of Exercise of
this Warrant.
A "Date of Exercise" means the date on which the Company shall
have received (i) this Warrant (or any New Warrant, as applicable), with the
Form of Election to Purchase attached hereto (or attached to such
- --------------------------
(1) 1999, 2000 and 2001 in each Warrant issued, respectively.
E-71
3
New Warrant) appropriately completed and duly signed, and (ii) payment of the
Exercise Price for the number of Warrant Shares so indicated by the holder
hereof to be purchased.
3. This Warrant shall be exercisable, either in its entirety or, from
time to time, for a portion of the number of Warrant Shares so long as at
least 10,000 Warrant Shares are purchased in any one exercise. If less than all
of the Warrant Shares which may be purchased under this Warrant are exercised
at any time, the Company shall issue, at its expense, a New Warrant evidencing
the right to purchase the remaining number of Warrant Shares for which no
exercise has been evidenced by this Warrant.
XIX. PAYMENT OF TAXES. The Company will pay all documentary stamp taxes
attributable to the issuance of Warrant Shares upon the exercise of this
Warrant; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the
registration of any certificates for Warrant Shares in a name other than that
of the Holder, and the Company shall not be required to issue or deliver the
certificates for Warrant Shares unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid. The Holder shall be responsible for all other tax liability
that may arise as a result of holding or transferring this Warrant or receiving
Warrant Shares upon exercise hereof.
XX. REPLACEMENT OF WARRANT. If this Warrant is mutilated, lost, stolen
or destroyed, the Company may in its discretion issue in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and indemnity,
if requested, satisfactory to it. Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company may prescribe.
XXI. RESERVATION OF WARRANT SHARES. The Company covenants that it will
at all times reserve and keep available out of the aggregate of its authorized
but unissued Common Stock, solely for the purpose of enabling it to issue
Warrant Shares upon exercise of this Warrant as herein provided, the number of
Warrant Shares which are then issuable and deliverable upon the exercise of
this entire Warrant, free from preemptive rights or any other actual contingent
purchase rights of persons other than the Holders (taking into account the
adjustments and restrictions of SECTION 7). The Company covenants that all
Warrant Shares that shall be so issuable and deliverable shall, upon issue, be
duly and validly authorized, issued and fully paid, nonassessable and freely
tradeable.
XXII. CERTAIN ADJUSTMENTS. The Exercise Price and number of Warrant
Shares issuable upon exercise of this Warrant are subject to adjustment from
time to time as set forth in this SECTION 7. Upon each such adjustment of the
Exercise Price pursuant to this SECTION 7, the Holder shall thereafter prior to
the Expiration Date be entitled to purchase, at the Exercise Price resulting
from such adjustment, the number of Warrant Shares obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
Warrant Shares issuable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting
from such adjustment.
(i) If the Company, at any time while this Warrant is
outstanding, (a) shall pay a stock dividend or otherwise make a distribution or
distributions on shares of its Junior Securities (as such term is defined in the
Statement of Rights and Preferences) payable in shares of Common Stock, (b)
subdivide outstanding shares of Common Stock into a larger number of shares, or
(c) combine outstanding shares of Common Stock into a smaller number of shares,
the Exercise Price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Common Stock (excluding treasury shares, if
any) outstanding before such event and of which the denominator shall be the
number of shares of Common Stock outstanding after such event. Any adjustment
made pursuant to this Section shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
E-72
4
effective date in the case of a subdivision or combination, and shall apply to
successive subdivisions and combinations.
(ii) In case of any reclassification of the Common
Stock, any consolidation or merger of the Company with or into another person,
the sale or transfer of all or substantially all of the assets of the Company
or any compulsory share exchange pursuant to which the Common Stock is
converted into other securities, cash or property, then the Holder shall have
the right thereafter to exercise this Warrant only into the shares of stock and
other securities and property receivable upon or deemed to be held by holders
of Common Stock following such reclassification, consolidation, merger, sale,
transfer or share exchange, and the Holder shall be entitled upon such event to
receive such amount of securities or property equal to the amount of Warrant
Shares such Holder would have been entitled to had such Holder exercised this
Warrant immediately prior to such reclassification, consolidation, merger,
sale, transfer or share exchange. The terms of any such consolidation, merger,
sale, transfer or share exchange shall include such terms so as to continue to
give to the Holder the right to receive the securities or property set forth in
this SECTION 7(b) upon any exercise following such consolidation, merger, sale,
transfer or share exchange. This provision shall similarly apply to successive
reclassifications, consolidations, mergers, sales, transfers or share
exchanges.
(iii) If the Company, at any time while outstanding,
shall distribute to all holders of Common Stock (and not to holders of this
Warrant) evidences of its indebtedness or assets or rights or warrants to
subscribe for or purchase any security (excluding those referred to in SECTIONS
7(a) and (b) above), then in each such case the Exercise Price shall be
determined by multiplying the Exercise Price in effect immediately prior to the
record date fixed for determination of stockholders entitled to receive such
distribution by a fraction of which the denominator shall be the Exercise Price
determined as of the record date mentioned above, and of which the numerator
shall be such Exercise Price on such record date less the then fair market
value at such record date of the portion of such assets or evidence of
indebtedness so distributed applicable to one outstanding share of Common Stock
as determined by a nationally recognized or major regional investment banking
firm or firm of independent certified public accountants of recognized standing
(which may be the firm that regularly examines the financial statements of the
Company) (an "APPRAISER") selected in good faith by the holders of a majority
in interest of the Warrants then outstanding.
(iv) For the purposes of this Section, the following
clauses shall also be applicable:
A. RECORD DATE. In case the Company shall take a record
of the holders of its Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in Common Stock or in
Convertible Securities, or (B) to subscribe for or purchase Common Stock or
Convertible Securities, then such record date shall be deemed to be the date of
the 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 granting of such right of subscription or
purchase, as the case may be.
B. TREASURY SHARES. The number of shares of Common
Stock outstanding at any given time shall not include shares owned or held by
or for the account of the Company, and the disposition of any such shares shall
be considered an issue or sale of Common Stock for the purposes of this
subsection (d).
(v) All calculations under this SECTION 7 shall be
made to the nearest cent or the nearest 1/100th of a share, as the case may be.
(vi) Whenever the Exercise Price is adjusted pursuant
to SECTION 7(c) above, the Company, after receipt of the determination by the
Appraiser shall have the right to select an additional Appraiser, in good
faith, in which case the adjustment shall be equal to the average of the
adjustments recommended by each
E-73
5
Appraiser. The Company shall promptly mail to each Holder, a notice setting
forth the Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Such adjustment shall become
effective immediately after the record date mentioned above; PROVIDED, HOWEVER,
that no such adjustment of the Exercise Price shall be made which in the opinion
of the Appraiser(s) giving the aforesaid opinion or opinions would result in an
increase of the Exercise Price to more than the Exercise Price then in effect.
All determinations with respect to adjustments by the Company hereunder shall be
made by the Board of Directors in good faith.
(vii) If:
A. the Company shall declare a dividend
(or any other distribution) on its
Common Stock; or
B. the Company shall declare a special
nonrecurring cash dividend on or a
redemption of its Common Stock; or
C. the Company shall authorize the
granting to all holders of the
Common Stock rights or warrants to
subscribe for or purchase any shares
of capital stock of any class or of
any rights, or
D. the approval of any stockholders of
the Company shall be required in
connection with any reclassification
of the Common Stock of the Company,
any consolidation or merger to which
the Company is a party, any sale or
transfer of all or substantially all
of the assets of the Company, or any
compulsory share exchange whereby
the Common Stock is converted into
other securities, cash or property,
or
E. the Company shall authorize the
voluntary or involuntary
dissolution, liquidation or winding
up of the affairs of the Company;
then the Company shall cause to be mailed to each Holder at their last addresses
as they shall appear upon the Warrant Register, at least 30 calendar days prior
to the applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up; PROVIDED, HOWEVER, that the failure to mail such notice or any
defect therein or in the mailing thereof shall not affect the validity of the
corporate action required to be specified in such notice.
XXIII. FRACTIONAL SHARES. The Company shall not be required to issue
fractional Warrant Shares on the exercise of this Warrant. The number of full
Warrant Shares which shall be issuable upon the exercise of this Warrant shall
be computed on the basis of the aggregate number of Warrant Shares purchasable
on exercise of this Warrant so presented. If any fraction of a Warrant Share
would, except for the provisions of this SECTION 8, be issuable on the exercise
of this Warrant, the Company shall, at its option, (a) pay an amount in cash
equal to the Exercise Price multiplied by such fraction or (b) shall round the
number of Warrant Shares issuable, up to the next whole number of such shares.
E-74
6
XXIV. NOTICES. Any and all notices or other communications or
deliveries hereunder shall be in writing and shall be delivered personally, by
facsimile, sent by a nationally recognized overnight courier service or sent by
registered or certified mail, postage prepaid, addressed as follows: (1) if to
the Company, to CAYENNE SOFTWARE, INC., 8 New England Executive Park,
Burlington, MA 01803, Attention: Chief Financial Officer, or to facsimile no.
(617) 229-8124; or (ii) if to the Holder, to the Holder at the address or
facsimile number appearing on the Warrant Register or such other address or
facsimile number as the Holder may provide to the Company in accordance with
this SECTION 9. Any notice or other communications or deliveries hereunder shall
be deemed given and effective on the earliest of (i) the date of transmission,
if delivered via facsimile at the facsimile number specified in this SECTION 9,
(ii) four (4) days after deposit in the United States mails, (iii) the date when
posted, if sent by nationally recognized overnight courier service or (iv) upon
actual receipt by the party to whom such notice is required to be given.
XXV. WARRANT AGENT.
-------------
1. The Company shall serve as warrant agent under this
Warrant. Upon thirty (30) days' notice to the Holder, the Company and the Holder
may appoint a new warrant agent.
2. Any corporation into which the Company or any new warrant
agent may be merged or any corporation resulting from any consolidation to which
the Company or any new warrant
E-75
7
agent shall be a party or any corporation to which the Company or any new
warrant agent transfers substantially all of its corporate trust or shareholders
services business shall be a successor warrant agent under this Warrant without
any further act; provided that such corporation (i) would be eligible for
appointment as successor to the warrant agent under the provisions of this
SECTION 10 or (ii) is a wholly-owned subsidiary of the warrant agent. Any such
successor warrant agent shall promptly cause notice of its succession as warrant
agent to be mailed (by first class mail, postage prepaid) to the Holder at the
Holder's last address as shown on the register maintained by the warrant agent
pursuant to this Warrant.
XXVI. MISCELLANEOUS.
-------------
1. This Warrant shall be binding on and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
This Warrant may be amended only in writing signed by the Company and the
Holder.
2. Subject to SECTION 11(a), above, nothing in this Warrant
shall be construed to give to any person or corporation other than the Company,
the Holder and any registered holder of Warrant Shares any legal or equitable
right, remedy or cause under this Warrant; this Warrant shall be for the sole
and exclusive benefit of the Company, the Holder and any other registered holder
of Warrant Shares.
3. This Warrant shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to the principles of conflicts of law thereof.
4. The headings herein are for convenience only, do not
constitute a part of this Warrant and shall not be deemed to limit or affect any
of the provisions hereof.
5. In case any one or more of the provisions of this Warrant
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.
CAYENNE SOFTWARE, INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
E-76
8
FORM OF ELECTION TO PURCHASE
(To be executed by the Holder to exercise the right to purchase shares of Common
Stock under the foregoing Warrant)
To Cayenne Software, Inc.:
In accordance with the Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase _____________
shares of Common Stock ("Common Stock"), par value $.01 per share, of Cayenne
Software, Inc. and encloses herewith $________ in cash (or encloses herewith
evidence of payment of such sum), which sum represents the Exercise Price (as
defined in the Warrant) for the number of shares of Common Stock to which this
Form of Election to Purchase relates, together with any applicable taxes payable
by the undersigned pursuant to the Warrant.
The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
______________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
________________________________________________________________________________
If the number of shares of Common Stock issuable upon this exercise shall
not be all of the shares of Common Stock which the undersigned is entitled to
purchase in accordance with the enclosed Warrant, the undersigned requests that
a New Warrant (as defined in the Warrant) evidencing the right to purchase the
shares of Common Stock not issuable pursuant to the exercise evidenced hereby be
issued in the name of and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
________________________________________________________________________________
Dated: ______________, ____ Name of Holder:
(Print)_______________________________
(By:)_________________________________
(Title:)
E-77
9
[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the within
Warrant to purchase ____________ shares of Common Stock of CAYENNE SOFTWARE,
INC. to which the within Warrant relates and appoints ________________ attorney
to transfer said right on the books of CAYENNE SOFTWARE, INC. with full power of
substitution in the premises.
Dated:
______________, ____
__________________________________
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant)
__________________________________
Address
In the presence of:
__________________________________
E-78