EXHIBIT 4.4
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT") OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
WARRANT TO PURCHASE 177,098 SHARES
OF THE COMMON STOCK OF
CrossWorlds Software, Inc.
(Void after October 7, 2006)
This certifies that Heidrick & Struggles, Inc. or its assigns (each
individually, the "Holder") for value received, shall be entitled to purchase
from CrossWorlds Software, Inc. a Delaware corporation (the "Company"), having
its principal place of business at 577 Airport Boulevard, Suite 800, Burlingame,
California 94010-2024, a maximum of 177,098 fully paid and nonassessable shares
of the Company's Common Stock ("Common Stock") for cash at a price equal to
$6.60 per share (the "Exercise Price") at any time, or from time to time, up to
and including 5:00 p.m. (local time) on the seventh anniversary from the date of
this Warrant (the "Expiration Date"), upon the surrender to the Company at its
principal place of business (or at such other location as the Company may advise
the Holder in writing) of this Warrant properly endorsed a Form of Subscription
in substantially the form attached hereto duly filled in and signed and, if
applicable, upon payment in cash or by check of the aggregate Exercise Price for
the number of shares for which this Warrant is being exercised determined in
accordance with the provisions hereof. The Exercise Price and the number of
shares of Common Stock purchasable hereunder are subject to adjustment as
provided in Section 3 of this Warrant.
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment for Shares.
1.1 General. This Warrant is exercisable at the option of the
holder of record hereof at any time or from time, to time, up to the
Expiration Date for all or any part of the shares of Common Stock (but not for
a fraction of a share) which may be purchased hereunder. The Company agrees
that the shares of Common Stock purchased under this Warrant shall be and are
deemed to be issued to the Holder hereof as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered, properly endorsed, the completed, executed Form of Subscription
delivered and payment made for such shares. Certificates for the shares of
Common Stock so purchased, together with any other securities or property to
which the Holder is entitled upon such exercise, shall be delivered to the
Holder by the Company at the Company's expense within a reasonable time after
the rights represented by this Warrant have been so exercised, and in any
event, within fifteen (15) days of such exercise. In case of a purchase of
less than all the shares which may be purchased under this Warrant, the
Company shall cancel this Warrant and execute and deliver a new Warrant or
Warrants of like tenor for the balance of the shares purchasable under the
Warrant surrendered upon such purchase to the Holder hereof within a
reasonable time. Each stock certificate so delivered shall
be in such denominations of Common Stock as may be requested by the Holder
hereof and shall be registered in the name designated by such Holder.
1.2 Net Issue Exercise. Notwithstanding any provisions herein to
the contrary, if the fair market value of one share of the Company's Common
Stock is greater than the Exercise Price (at the date of calculation as set
forth below), in lieu of exercising this Warrant for cash, the Holder may
elect to receive shares equal to the value (as determined below) of this
Warrant (or the portion thereof being canceled) by surrender of this Warrant
at the principal office of the Company together with the properly endorsed
Form of Subscription and notice of such election in which event the Company
shall issue to the Holder a number of shares of Common Stock computed using
the following formula:
X = Y (A-B)
-------
A
Where X = the number of shares of Common Stock to be issued to the Holder
Y = the number of shares of Common Stock
purchasable under the Warrant or, if only
a portion of the Warrant is being
exercised, the portion of the Warrant
being canceled (at the date of such
calculation)
A = the fair market value of one share of the
Company's Common Stock (at the date of
such calculation)
B = Exercise Price (as adjusted to the date
of such calculation).
For purposes of the above calculation, the fair market value of one share of
Common Stock shall be determined by the Company's Board of Directors in good
faith; provided, however, that where there is a public market for the Company's
Common Stock, the fair market value per share shall be the average of the
closing prices of the Company's Common Stock quoted on the Nasdaq National
Market (or similar system) or on any exchange on which the Common Stock is
listed, whichever is applicable, over the five (5) day period ending one (1) day
before the day the current fair market value is being determined.
2. Shares to be Fully Paid; Reservation of Shares. The Company
covenants and agrees that all shares of Common Stock which may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable and free from
all preemptive rights of any shareholder and free of all taxes, liens and
charges with respect to the issue thereof. The Company further covenants and
agrees that, during the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized and
reserved, for the purpose of issue or transfer upon exercise of the
subscription rights evidenced by this Warrant, a sufficient number of shares
of authorized but unissued Common Stock, or other securities and property,
when and as required to provide for the exercise of the rights represented by
this Warrant. The Company will take all such action as may be necessary to
assure that such shares of Common Stock may be issued as
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provided herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Common Stock may
be listed; provided, however, that the Company shall not be required to effect a
registration under Federal or State securities laws with respect to such
exercise. The Company will not take any action which would result in any
adjustment of the Exercise Price (as set forth in Section 3 hereof) if the total
number of shares of Common Stock issuable after such action upon exercise of all
outstanding warrants, together with all shares of Common Stock then outstanding
and all shares of Common Stock then issuable upon exercise of all options and
upon the conversion of all convertible securities then outstanding, would exceed
the total number of shares of Common Stock then authorized by the Company's
Certificate of Incorporation (the "Company Charter").
3. Adjustment of Exercise Price and Number of Shares. The Exercise
Price and the number of shares purchasable upon the exercise of this Warrant
shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3. Upon each adjustment of the
Exercise Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Exercise Price resulting from such adjustment, the number of
shares obtained by multiplying the Exercise Price in effect immediately prior
to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Exercise Price resulting from such adjustment.
3.1 Subdivision or Combination of Stock. In case the Company
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to
such subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Exercise Price in effect immediately prior to
such combination shall be proportionately increased.
3.2 Dividends in Common Stock, Other Stock, Property,
Reclassification. If at any time or from time to time the Holders of Common
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to
receive, without payment therefor,
(a) Common Stock or any shares of stock or other securities
which are at any time directly or indirectly convertible into or exchangeable
for Common Stock, or any rights or options to subscribe for, purchase or
otherwise acquire any of the foregoing by way of dividend or other
distribution,
(b) any cash paid or payable otherwise than as a cash
dividend, or
(c) Common Stock or additional stock or other securities or
property (including cash) by way of spinoff, split-up, reclassification,
combination of shares or similar corporate rearrangement, (other than shares
of Common Stock issued as a stock split or adjustments in respect of which
shall be covered by the terms of Section 3.1 above), then and in each such
case, the Holder hereof shall, upon the exercise of this Warrant, be entitled
to receive, in addition to the number of shares of Common Stock receivable
thereupon, and without payment of any additional consideration therefor, the
amount of stock and other securities and property (including cash in the cases
referred to in clause (b) above and this clause (c)) which
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such Holder would hold on the date of such exercise had he been the holder of
record of such Common Stock as of the date on which holders of Common Stock
received or became entitled to receive such shares or all other
additional stock and other securities and property.
3.3 Reorganization, Reclassification, Consolidation, Merger or
Sale. If any recapitalization, reclassification or reorganization of the
capital stock of the Company, or any consolidation or merger of the Company
with another corporation, or the sale of all or substantially all of its
assets or other transaction shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock, securities, or other assets
or property (an "Organic Change"), then, as a condition of such Organic
Change, lawful and adequate provisions shall be made by the Company whereby
the Holder hereof shall thereafter have the right to purchase and receive (in
lieu of the shares of the Common Stock of the Company immediately theretofore
purchasable and receivable upon the exercise of the rights represented by this
Warrant) such shares of stock, securities or other assets or property as may
be issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented by this Warrant. In the event of any Organic Change,
appropriate provision shall be made by the Company with respect to the rights
and interests of the Holder of this Warrant to the end that the provisions
hereof (including, without limitation, provisions for adjustments of the
Exercise Price and of the number of shares purchasable and receivable upon the
exercise of this Warrant) shall thereafter be applicable, in relation to any
shares of stock, securities or assets thereafter deliverable upon the exercise
hereof. The Company will not effect any such consolidation, merger or sale
unless, prior to the consummation thereof, the successor corporation (if other
than the Company) resulting from such consolidation or the corporation
purchasing such assets shall assume by written instrument executed and mailed
or delivered to the registered Holder hereof at the last address of such
Holder appearing on the books of the Company, the obligation to deliver to
such Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such Holder may be entitled to purchase.
3.4 Certain Events. If any change in the outstanding Common Stock
of the Company or any other event occurs as to which the other provisions of
this Section 3 are not strictly applicable or if strictly applicable would not
fairly protect the purchase rights of the Holder of the Warrant in accordance
with such provisions, then the Board of Directors of the Company shall make an
adjustment in the number and class of shares available under the Warrant, the
Exercise Price or the application of such provisions, so as to protect such
purchase rights as aforesaid. The adjustment shall be such as will give the
Holder of the Warrant upon exercise for the same aggregate Exercise Price the
total number, class and kind of shares as he would have owned had the Warrant
been exercised prior to the event and had he continued to hold such shares
until after the event requiring adjustment.
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3.5 Notices of Change.
(a) Immediately upon any adjustment in the number or class
of shares subject to this Warrant and of the Exercise Price, the Company
shall give written notice thereof to the Holder, setting forth in
reasonable detail and certifying the calculation of such adjustment.
(b) The Company shall give written notice to the Holder at
least 10 business days prior to the date on which the Company closes its books
or takes a record for determining rights to receive any dividends or
distributions.
(c) The Company shall also give written notice to the Holder
at least 15 business days prior to the date on which an Organic Change shall
take place.
4. Issue Tax. The issuance of certificates for shares of Common Stock
upon the exercise of the Warrant shall be made without charge to the Holder of
the Warrant for any issue tax (other than any applicable income taxes) in
respect thereof; 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
issuance and delivery of any certificate in a name other than that of the then
Holder of the Warrant being exercised.
5. Closing of Books. The Company will at no time close its transfer
books against the transfer of any warrant or of any shares of Common Stock
issued or issuable upon the exercise of any warrant in any manner which
interferes with the timely exercise of this Warrant.
6. No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a shareholder
of the Company or any other matters or any rights whatsoever as a shareholder
of the Company. No dividends or interest shall be payable or accrued in
respect of this Warrant or the interest represented hereby or the shares
purchasable hereunder until, and only to the extent that, this Warrant shall
have been exercised. No provisions hereof, in the absence of affirmative
action by the holder to purchase shares of Common Stock, and no mere
enumeration herein of the rights or privileges of the holder hereof, shall
give rise to any liability of such Holder for the Exercise Price or as a
shareholder of the Company, whether such liability is asserted by the Company
or by its creditors.
7. Warrants Transferable. Subject to compliance with applicable
federal and state securities laws, and provided the Company receives prior
written notice, this Warrant and all rights hereunder are transferable, in
whole or in part, without charge to the holder hereof (except for transfer
taxes), upon surrender of this Warrant properly endorsed. Each taker and
holder of this Warrant, by taking or holding the same, consents and agrees
that this Warrant, when endorsed in blank, shall be deemed negotiable, and
that the holder hereof, when this Warrant shall have been so endorsed, may be
treated by the Company, at the Company's option, and all other persons dealing
with this Warrant as the absolute owner hereof for any purpose and as the
person entitled to exercise the rights represented by this Warrant, or to the
transfer hereof on the books of the Company any notice to the contrary
notwithstanding; but until such transfer on such books, the Company may treat
the registered owner hereof as the owner for all purposes. Notwithstanding the
foregoing, unless the Company is filing financial information with the SEC
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pursuant to the Securities Exchange Act of 1934, the Company shall have the
right to refuse to transfer any portion of this Warrant to any person who
directly competes with the Company.
8. Rights and Obligations Survive Exercise of Warrant. The rights and
obligations of the Company, of the holder of this Warrant and of the holder of
shares of Common Stock issued upon exercise of this Warrant, shall survive the
exercise of this Warrant.
9. Further Representations, Warranties and Covenants of the Company.
(a) Articles and Bylaws. The Company has made available to
Holder true, complete and correct copies of the Company Charter and Bylaws, as
amended, through the date hereof.
(b) Due Authority. The execution and delivery by the Company
of this Warrant and the performance of all obligations of the Company
hereunder, including the issuance to Holder of the right to acquire the shares
of Common Stock, have been duly authorized by all necessary corporate action
on the part of the Company, and the Warrant is not inconsistent with the
Company Charter or Bylaws and constitutes a legal, valid and binding agreement
of the Company, enforceable in accordance with its terms.
(c) Consents and Approvals. No consent or approval of,
giving of notice to, registration with, or taking of any other action in
respect of any state, federal or other governmental authority or agency is
required with respect to the execution, delivery and performance by the
Company of its obligations under this Warrant, except for any filing required
by applicable federal and state securities laws, which filing will be
effective by the time required thereby.
(d) Exempt Transaction. Subject to the accuracy of the
Holders representations in Section 10 hereof, the issuance of the Common Stock
upon exercise of this Warrant will constitute a transaction exempt from (i)
the registration requirements of Section 5 of the Securities Act of 1933, as
amended (the "1933 Act"), in reliance upon Section 4(2) thereof, and (ii) the
qualification requirements of the applicable state securities laws.
(e) Compliance with Rule 144. At the written request of the
Holder, who proposes to sell Common Stock issuable upon the exercise of the
Warrant in compliance with Rule 144 promulgated by the Securities and Exchange
Commission, the Company shall furnish to the Holder, within thirty (30) days
after receipt of such request, a written statement confirming the Company's
compliance with the filing requirements of the Securities and Exchange
Commission as set forth in such Rule, as such Rule may be amended from time to
time.
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10. Representations and Covenants of the Holder.
This Warrant has been entered into by the Company in reliance upon the
following representations and covenants of the Holder:
(a) Investment Purpose. The Warrant or the Common Stock
issuable upon exercise of the Warrant will be acquired for investment and not
with a view to the sale or distribution of any part thereof, and the Holder
has no present intention of selling or engaging in any public distribution of
the same except pursuant to a registration or exemption.
(b) Private Issue. The Holder understands (i) that the
Warrant and the Common Stock issuable upon exercise of this Warrant is not
registered under the 1933 Act or qualified under applicable state securities
laws on the ground that the issuance contemplated by this Warrant will be
exempt from the registration and qualifications requirements thereof, and (ii)
that the Company's reliance on such exemption is predicated on the
representations set forth in this Section 10.
(c) Disposition of Holders Rights. In no event will the
Holder make a disposition of the Warrant or the Common Stock issuable upon
exercise of the Warrant unless and until (i) it shall have notified the
Company of the proposed disposition, and (ii) if requested by the Company, it
shall have furnished the Company with an opinion of counsel (which counsel may
either be inside or outside counsel to the Holder) satisfactory to the Company
and its counsel to the effect that (A) appropriate action necessary for
compliance with the 1933 Act has been taken, or (B) an exemption from the
registration requirements of the 1933 Act is available. Notwithstanding the
foregoing, the restrictions imposed upon the transferability of any of its
rights to acquire Common Stock or Common Stock issuable on the exercise of
such rights do not apply to transfers from the beneficial owner of any of the
aforementioned securities to its nominee or from such nominee to its
beneficial owner, and shall terminate as to any particular share of Common
Stock when (1) such security shall have been effectively registered under the
1933 Act and sold by the holder thereof in accordance with such registration
or (2) such security shall have been sold without registration in compliance
with Rule 144 under the 1933 Act, or (3) a letter shall have been issued to
the Holder at its request by the staff of the Securities and Exchange
Commission or a ruling shall have been issued to the Holder at its request by
such Commission stating that no action shall be recommended by such staff or
taken by such Commission, as the case may be, if such security is transferred
without registration under the 1933 Act in accordance with the conditions set
forth in such letter or ruling and such letter or ruling specifies that no
subsequent restrictions on transfer are required. Whenever the restrictions
imposed hereunder shall terminate, as hereinabove provided, the Holder or
holder of a share of Common Stock then outstanding as to which such
restrictions have terminated shall be entitled to receive from the Company,
without expense to such holder, one or more new certificates for the Warrant
or for such shares of Common Stock not bearing any restrictive legend.
(d) Financial Risk. The Holder has such knowledge and
experience in financial and business matters as to be capable of evaluating
the merits and risks of its investment, and has the ability to bear the
economic risks of its investment.
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(e) Risk of No Registration. The Holder understands that if
the Company does not register with the Securities and Exchange Commission
pursuant to Section 12 of the 1933 Act, or file reports pursuant to Section
15(d), of the Securities Exchange Act of 1934 (the "1934 Act"), or if a
registration statement covering the securities under the 1933 Act is not in
effect when it desires to sell (i) the Warrant, or (ii) the Common Stock
issuable upon exercise of the Warrant, it may be required to hold such
securities for an indefinite period. The Holder also understands that any sale
of the Warrant or the Common Stock issuable upon exercise of the Warrant which
might be made by it in reliance upon Rule 144 under the 1933 Act may be made
only in accordance with the terms and conditions of that Rule.
(f) Accredited Investor. Holder is an "accredited investor"
within the meaning of Rule 501 of Regulation D under the 1933 Act, as
presently in effect.
11. Modification and Waiver. This Warrant and any provision hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
12. Notices. Any notice, request or other document required or
permitted to be given or delivered to the holder hereof or the Company shall
be delivered or shall be sent by certified mail, postage prepaid, to each such
holder at its address as shown on the books of the Company or to the Company
at the address indicated therefor in the first paragraph of this Warrant or
such other address as either may from time to time provide to the other.
13. Binding Effect on Successors. This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets. All of the obligations of
the Company relating to the Common Stock issuable upon the exercise of this
Warrant shall survive the exercise and termination of this Warrant. All of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the holder hereof.
14. Market Standoff Agreement. In connection with the initial public
offering of the Company's securities and upon request of the Company or the
underwriters managing such offering of the Company's securities, the Holder
agrees not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any securities of the Company (other than
those included in the registration) without the prior written consent of the
Company or such underwriters, as the case may be, for such period of time (not
to exceed 180 days) from the effective date of such registration as may be
requested by the Company or such managing underwriters and to execute an
agreement reflecting the foregoing as may be requested by the underwriters at
the time of the Company's initial public offering; provided that all then-
current officers and directors of the Company are similarly restricted. In
order to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the securities of the Holder. The Holder agrees
that prior to the Company's initial public offering it will not transfer
securities of the Company unless each transferee agrees in writing to be bound
by all of the provisions of this Section 14.
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15. Descriptive Headings and Governing Law. The description headings
of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of California.
16. Lost Warrants. The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case
of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation
upon surrender and cancellation of such Warrant, the Company, at its expense,
will make and deliver a new Warrant, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant.
17. Fractional Shares. No fractional shares shall be issued upon
exercise of this Warrant. The Company shall, in lieu of issuing any fractional
share, pay the holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the then effective Exercise Price.
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In Witness Whereof, the Company has caused this Warrant to be duly executed
by its officers, thereunto duly authorized this 11th day of October, 1999.
---- -------
CrossWorlds Software, Inc.
a Delaware corporation
By: /s/ Stacey A. Giamalis
-----------------------
Title: General Counsel and Secretary
------------------------------
Accepted and Agreed:
Heidrick & Struggles, Inc.
By: /s/ Richard D. Nelson
_______________________________
Title: Secretary
______________________________
EXHIBIT A
SUBSCRIPTION FORM
Date: _________________, _______
CrossWorlds Software, Inc.
577 Airport Boulevard
Suite 800
Burlingame, CA 94010-2024
Attn: President
Ladies and Gentlemen:
[_] The undersigned hereby elects to exercise the warrant issued to it by
CrossWorlds Software, Inc. (the "Company") and dated ___________ _____,
____ -___ (the "Warrant") and to purchase thereunder
__________________________________ shares of the Common Stock of the
Company (the "Shares") at a purchase price of
___________________________________________ Dollars ($__________) per Share
or an aggregate purchase price of __________________________________
Dollars ($__________) (the "Exercise Price").
[_] The undersigned hereby elects to convert _______________________ percent
(____%) of the value of the Warrant pursuant to the provisions of Section
1.2 of the Warrant.
Pursuant to the terms of the Warrant the undersigned has delivered the
Exercise Price herewith in full in cash or by certified check or wire transfer.
The undersigned confirms its continuing agreement to be bound to the market
standoff provisions of Section 14 of the Warrant as to the securities of the
Company held from time to time by the undersigned.
Very truly yours,
____________________________________
By:
_________________________________
Title:
______________________________