Exhibit 10.7
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS
OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
THEREFROM.
No. W- Right to Purchase Shares of
Common Stock of Lionbridge
Technologies, Inc.
Lionbridge Technologies, Inc.
COMMON STOCK PURCHASE WARRANT
August 1, 2002
Lionbridge Technologies, Inc., a Delaware corporation (the "Company"),
hereby certifies that, for value received, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital Fund
II Annex, L.P., a Delaware limited partnership ("MS"), or assigns, is entitled,
subject to the terms set forth below, to purchase from the Company at any time
or from time to time before 5:00 p.m., Boston time, on July 31, 2009, or such
later time as may be specified in Section 17 hereof, up to 44,517 fully paid and
nonassessable shares of Common Stock, par value $.01 per share, of the Company
as is equal to the Warrant Number (as hereinafter defined), at a purchase price
per share equal to $1.69 (the "Purchase Price"). The Warrant Number, the
character of such shares of Common Stock and the Purchase Price are subject to
adjustment as provided herein.
This Common Stock Purchase Warrant (this "Warrant") is issued by the
Company to MS in connection with MS agreeing to extend the term of that certain
note, dated as of March 9, 1999, issued by Lionbridge Technologies, Inc.
(formerly known as Lionbridge Technologies Holdings, Inc.) in favor of MS and
that certain note, dated as of March 9, 1999, issued by Lionbridge Technologies
Holdings, B.V. in favor of MS (collectively, the "Notes").
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include Lionbridge Technologies, Inc. and any
corporation which shall succeed to, or assume the obligations of, the Company
hereunder.
(b) The term "Common Stock" includes (i) the Company's Common Stock, par
value $.01 per share, as authorized on the date of the Agreement, (ii) any other
capital stock of any class or classes (however designated) of the Company,
authorized on or after such date, the holders of which shall have the right,
without limitation as to amount per share, either to all or to a share of the
balance of current dividends and liquidating distributions after the payment of
dividends and distributions on any shares entitled to preference in the payment
thereof, and the holders of which shall ordinarily, in the absence of
contingencies, be entitled to vote for the election of a majority of directors
of the Company (even though the right so to vote may be have been suspended by
the happening of such a contingency), and (iii) any other securities into which
or for which any of the securities described in clause (i) or (ii) above may be
converted or exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.
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(c) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 5 or otherwise.
1. Exercise of Warrant.
1.1 Vesting of Warrant. This Warrant is immediately exercisable for an
aggregate of 11,117 shares of Common Stock and on each three month anniversary
of May 31, 2002 (the "Vesting Trigger Date") shall be exercisable for an
additional number of shares of Common Stock equal to the product of A multiplied
by B divided by C, where (A) is 1,336, (B) is the aggregate principal amount of
the Notes outstanding on such three month anniversary of the Vesting Trigger
Date, and (C) is $200,000
1.2 Exercise. This Warrant may be exercised in part at any time before
its expiration up to the number of shares of Common Stock then vested by
surrender of this Warrant, with the form of subscription at the end hereof duly
executed by such holder, to the Company at its principal office, accompanied by
payment, in cash or by certified or official bank check payable to the order of
the Company, in the amount obtained by multiplying the number of vested shares
of Common Stock for which this Warrant is then being exercised by the Purchase
Price then in effect. On any partial exercise the Company at its expense will
forthwith issue and deliver to or upon the order of the holder hereof a new
Warrant or Warrants of like tenor, in the name of the holder hereof or as such
holder (upon payment by such holder of any applicable transfer taxes) may
request, calling in the aggregate on the face or faces thereof for the number of
shares of Common Stock for which such Warrant or Warrants may still be
exercised.
1.3 Payment by Surrender of Notes. Notwithstanding the payment
provisions of subsection 1.2, all or part of the payment due upon exercise of
this Warrant may be made by the surrender or partial surrender by such holder to
the Company of the Notes and the Notes so surrendered shall be credited against
such payment in an amount equal to the principal amount thereof plus premium (if
any) and accrued interest to the date of surrender.
1.4 Company Acknowledgment. The Company will, at the time of the
exercise of this Warrant, upon the request of the holder hereof acknowledge in
writing its continuing obligation to afford to such holder any rights to which
such holder shall continue to be entitled after such exercise in accordance with
the provisions of this Warrant. If the holder shall fail to make any such
request, such failure shall not affect the continuing obligation of the Company
to afford to such holder any such rights.
1.5 Net Issue Election. With respect to the number of shares of Common
Stock then vested, the holder may elect to receive, without the payment by the
holder of any additional consideration, shares equal to the value of this
Warrant or any portion hereof by the surrender of this Warrant or such portion
to the Company, with the net issue election notice annexed hereto duly executed,
at the office of the Company. Thereupon, the Company shall issue to the holder
such number of fully paid and nonassessable shares of Common Stock as is
computed using the following formula:
X = Y (A-B)/ A
where X = the number of shares to be issued to the holder pursuant to this
Section 1.5.
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Y = the number of vested shares covered by this Warrant in respect of
which the net issue election is made pursuant to this Section 1.5.
A = the fair market value of one share of Common Stock, as determined in
accordance with the provisions of this Section 1.5.
B = the Purchase Price in effect under this Warrant at the time the net
issue election is made pursuant to this Section 1.5.
For purposes of this Section 1.5, the "fair market value" per share of the
Company's Common Stock shall mean:
(a) If the Common Stock is traded on a national securities exchange
or admitted to unlisted trading privileges on such an exchange,
or is listed on the National Market (the "National Market") of
the National Association of Securities Dealers Automated
Quotations System ("NASDAQ"), the fair market value shall be the
last reported sale price of the Common Stock on such exchange or
on the National Market on the last business day before the
effective date of exercise of the net issue election or if no
such sale is made on such day, the mean of the closing bid and
asked prices for such day on such exchange or on the National
Market;
(b) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the fair market value shall be the mean of
the last bid and asked prices reported on the last business day
before the date of the election (1) by the NASDAQ or (2) if
reports are unavailable under clause (1) above by the National
Quotation Bureau Incorporated; and
(c) If the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and ask prices are not reported, the
fair market value shall be the price per share which the Company
could obtain from a willing buyer for shares sold by the Company
from authorized but unissued shares, as such price shall be
determined by mutual agreement of the Company and the holder of
this Warrant. If the holder of this Warrant and the Company are
unable to agree on such fair market value, the holder of this
Warrant shall select a pool of three independent and
nationally-recognized investment banking or accounting firms from
which the Company shall select one such firm to appraise the fair
market value of the Warrant and to perform the computations
involved. The determination of such investment banking firm shall
be binding upon the Company, the holder of this Warrant and any
other holder of Warrants or Warrant Shares in connection with any
transaction occurring at the time of such determination. All
expenses of such investment banking firm shall be borne equally
by the holder of this Warrant and the Company.
2. Delivery of Stock Certificates, etc. on Exercise. As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
ten (10) days thereafter unless a determination of fair market value per share
of Common Stock is required pursuant to Section 1.5 above, the Company at its
expense (including the payment by it of any applicable issue taxes) will cause
to be issued in the name of and delivered to the holder hereof, or any affiliate
of such holder as such holder (upon payment by such holder of any applicable
transfer taxes) may direct, a certificate or certificates for the number of
fully paid and nonassessable shares of Common Stock (or Other Securities) to
which such holder shall be entitled on such exercise, plus, in lieu of any
fractional share to which such holder would otherwise be entitled, cash equal to
such fraction multiplied by the then current market value of one full share,
together with any other stock or other
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securities and property (including cash, where applicable) to which such holder
is entitled upon such exercise pursuant to Section 1 or otherwise.
3. Adjustment for Dividends in Other Stock, Property, etc.;
Reclassification, etc. In case at any time or from time to time, the holders of
Common Stock (or Other Securities) in their capacity as such shall have
received, or (on or after the record date fixed for the determination of
shareholders eligible to receive) shall have become entitled to receive, without
payment therefor,
(a) other or additional stock or other securities or property (other
than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of earnings
or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate rearrangement,
other than additional shares of Common Stock (or Other Securities) issued as a
stock dividend or in a stock-split (adjustments in respect of which are provided
for in Section 5), then and in each such case the holder of this Warrant, on the
exercise hereof as provided in Section 1, shall be entitled to receive the
amount of stock and other securities and property (including cash in the cases
referred to in subdivisions (b) and (c) of this Section 3) which such holder
would hold on the date of such exercise if on the date hereof he had been the
holder of record of the number of shares of Common Stock called for on the face
of this Warrant and had thereafter during the period from the date hereof to and
including the date of such exercise, retained such shares and all such other or
additional stock and other securities and property (including cash in the cases
referred to in subdivisions (b) and (c) of this Section 3) receivable by him as
aforesaid during such period, giving effect to all adjustments called for during
such period by Sections 4 and 5.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1 Reorganization, Consolidation, Merger, etc. In case at any time or
from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, the holder of this Warrant, on the exercise hereof as provided in Section
1 at any time after the consummation of such reorganization, consolidation or
merger or the effective date of such dissolution, as the case may be, shall
receive, in lieu of the Common Stock (or Other Securities) issuable on such
exercise prior to such consummation or such effective date, the stock and other
securities and property (including cash) to which such holder would have been
entitled upon such consummation or in connection with such dissolution, as the
case may be, if such holder had so exercised this Warrant, immediately prior
thereto, all subject to further adjustment thereafter as provided in Sections 3
and 5.
4.2 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 4, this Warrant shall continue in full force and effect, subject to
expiration in accordance with Section 17 hereof, and the terms hereof shall be
applicable to the shares of stock and other securities and property receivable
on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any such
stock or other securities, including, in the case of any such transfer, the
person acquiring all or substantially all of the properties or assets of the
Company, whether or not such person shall have expressly assumed the terms of
this Warrant.
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5. Adjustments for Certain Events.
5.1 Certain Dividends and Distributions. In the event the Company at
any time or from time to time after the date hereof shall make or issue, or fix
a record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in additional shares of Common
Stock, then and in each such event the Purchase Price then in effect immediately
before such event shall be decreased as of the time of such issuance or, in the
event such a record date shall have been fixed, as of the close of business on
such record date, by multiplying the Purchase Price then in effect by a
fraction:
(5) the numerator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to
the time of such issuance or the close of business on such
record date, and
(6) the denominator of which shall be the total number of shares
of Common Stock shares issued and outstanding immediately
prior to the time of such issuance or the close of business
on such record date plus the number of shares of Common
Stock issuable in payment of such dividend or distribution;
provided, however, that if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Purchase Price shall be recomputed accordingly as of the
close of business on such record date and thereafter the Purchase Price shall be
adjusted pursuant to this paragraph as of the time of actual payment of such
dividends or distributions.
Upon each such adjustment of the Purchase Price, the holder of this Warrant
shall thereafter be entitled to purchase, at the Purchase Price resulting from
such adjustment, the number of shares obtained by multiplying the Purchase 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 Purchase Price resulting from such adjustment.
5.2 Stock Splits and Reverse Splits. In the event that the Company
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares, the Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of Warrant Shares
purchasable pursuant to this Warrant immediately prior to such subdivision shall
be proportionately increased, and conversely, in the event that the outstanding
shares of Common Stock of the Company shall at any time be combined into a
smaller number of shares, the Purchase Price in effect immediately prior to such
combination shall be proportionately increased and the number of Warrant Shares
purchasable upon the exercise of this Warrant immediately prior to such
combination shall be proportionately reduced. Except as provided in this
subsection 5.2, no adjustment in the Purchase Price and no change in the number
of Warrant Shares purchasable shall be made under this Section 5 as a result of
or by reason of any such subdivision or combination.
5.3 Record Date as Date of Issuance or Sale. In the event that at any
time the Company shall take a record of the holders of its Common Stock for the
purpose of entitling them (i) to receive a dividend or other distribution
payable in Common Stock, or (ii) to subscribe for or purchase Common Stock, 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.
6. No Dilution or Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger,
63
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of the Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the holders of the Warrant against dilution or other
impairment. Without limiting the generality of the foregoing, the Company (a)
will not increase the par value or stated value of any shares of stock
receivable on the exercise of the Warrant above the amount payable therefor on
such stock receivable on the exercise of the Warrant above the amount payable
therefor on such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of the Warrant, (c) will not
issue any capital stock of any class which is preferred as to dividends or as to
the distribution of assets upon voluntary or involuntary dissolution,
liquidation or winding up, unless the rights of the holders thereof shall be
limited to a fixed sum or percentage of par value in respect of participation in
dividends and in any such distribution of assets, and (d) will not transfer all
or substantially all of its properties and assets to any other person (corporate
or otherwise), or consolidate with or merge into any other person or permit any
such person to consolidate with or merge into the Company (if the Company is not
the surviving person), unless such other person shall expressly assume in
writing and become bound by all the terms of the Warrant.
7. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrant, the Company's chief financial officer shall compute
such adjustment or readjustment in accordance with the terms of the Warrant and
prepare a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based,
including a statement of (a) the consideration received or receivable by the
Company for any additional shares of Common Stock (or Other Securities) issued
or sold or deemed to have been issued or sold, (b) the number of shares of
Common Stock (or Other Securities) outstanding or deemed to be outstanding, and
(c) the Purchase Price and the number of shares of Common Stock to be received
upon exercise of this Warrant, in effect immediately prior to such issue or sale
and as adjusted and readjusted as provided in this Warrant. The Company will
forthwith mail a copy of each such certificate to each holder of a Warrant, and
will, on the written request at any time of any holder of a Warrant, furnish to
such holder a like certificate setting forth the Purchase Price at the time in
effect and showing how it was calculated.
8. Notices of Record Date, etc. In the event of:
(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any proposed issue or grant by the Company of any shares of stock
of any class or any other securities, or any right or option to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities (other than the issue of Common Stock on the exercise of the
Warrant),
then and in each such event the Company will mail or cause to be mailed to each
holder of a Warrant a notice specifying (i) the date on which any such record is
to be taken for the purpose of
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such dividend, distribution or right, and stating the amount and character of
such dividend, distribution or right, (ii) the date on which any such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up is to take place, and the time,
if any is to be fixed, as of which the holders of record of Common Stock (or
Other Securities) shall be entitled to exchange their shares of Common Stock (or
Other Securities) for securities or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up, and (iii) the amount and
character of any stock or other securities, or rights or options with respect
thereto, proposed to be issued or granted, the date of such proposed issue or
grant and the persons or class of persons to whom such proposed issue or grant
is to be offered or made. Such notice shall be mailed at least ten (10) days
prior to the date specified in such notice on which any such action is to be
taken.
9. Reservation of Stock, etc. Issuable on Exercise of Warrant. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of the Warrant, all shares of Common Stock (or Other Securities)
from time to time issuable on the exercise of the Warrant.
10. Exchange of Warrant. On surrender for exchange of the Warrant, properly
endorsed, to the Company, the Company at its expense will issue and deliver to
or on the order of the holder thereof a new Warrant or Warrants of like tenor,
in the name of such holder or as such holder (on payment by such holder of any
applicable transfer taxes) may direct, calling in the aggregate on the face or
faces thereof for the number of shares of Common Stock called for on the face or
faces of the Warrant or Warrants so surrendered.
11. Replacement of Warrant. On receipt of evidence reasonably 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 of any Warrant, on delivery
of an indemnity agreement or security reasonably satisfactory in form and amount
to the Company or, in the case of any such mutilation, on surrender and
cancellation of such Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
12. Warrant Agent. The Company may, by written notice to each holder of a
Warrant, appoint an agent having an office in Boston, Massachusetts for the
purpose of issuing Common Stock (or Other Securities) on the exercise of the
Warrant pursuant to Section 1, exchanging Warrants pursuant to Section 10, and
replacing Warrants pursuant to Section 11, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be, shall
be made at such office by such agent.
13. Remedies. The Company stipulates that the remedies at law of the holder
of this Warrant in the event of any default or threatened default by the Company
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate, and that such terms may be specifically enforced
by a decree for the specific performance of any agreement contained herein or by
an injunction against a violation of any of the terms hereof or otherwise.
14. Negotiability, etc. This Warrant is issued upon the following terms, to
all of which each holder or owner hereof by the taking hereof consents and
agrees:
(a) title to this Warrant may be transferred to any affiliate of the
holder hereof by endorsement (by the holder hereof executing the form of
assignment at the end hereof) and delivery in the same manner as in the case of
a negotiable instrument transferable by endorsement and delivery; and
(b) any permitted transferee in possession of this Warrant properly
endorsed for transfer to such person (including endorsed in blank) is authorized
to represent himself as absolute owner hereof and is empowered to transfer
absolute title hereto by endorsement and delivery hereof to a bona fide
purchaser hereof for value; each prior taker or owner waives and
65
renounces all of his equities or rights in this Warrant in favor of each such
bona fide purchaser, and each such bona fide purchaser shall acquire absolute
title hereto and to all rights represented hereby. Nothing in this paragraph (b)
shall create any liability on the part of the Company beyond any liability or
responsibility it has under law.
15. Notices, etc. All notices and other communications from the Company to
the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such holder or, until any such holder furnishes to the
Company an address, then to, and at the address of, the last holder of this
Warrant who has so furnished an address to the Company.
16. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the Commonwealth of Massachusetts. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. This Warrant is being executed as an instrument
under seal. The invalidity or unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other provision.
17. Expiration. The right to exercise this Warrant shall expire at 5:00
p.m., Boston time, on the later of (i) July 31, 2009 or (ii) at such time as all
principal and interest on the Notes are paid in full. Notwithstanding the
foregoing, this Warrant shall automatically be deemed to be exercised in full
pursuant to the provisions of Section 1.5 hereof, without any further action on
behalf of the holder, immediately prior to the time this Warrant would otherwise
expire pursuant to the preceding sentence.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company has executed this Warrant under seal as of
the first date written above.
LIONBRIDGE TECHNOLOGIES, INC.
By:
-----------------------------------
Name:
Title:
67
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
Lionbridge Technologies, Inc.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder,
shares of Common Stock of Lionbridge Technologies, Inc. and
---------------
herewith makes payment of $ therefor, and requests that the
----------
certificates for such shares be issued in the name of, and delivered to
, federal taxpayer identification number
--------------------------------
, whose address is
----------------------- -----------------------------
Dated: --------------------------------------
(Signature must conform to
name of holder as specified on
the face of the Warrant)
--------------------------------------
(Address)
Signed in the presence of:
--------------------------
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FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto , federal taxpayer identification number
------------------
, whose address is , and who is an affiliate
-------------------- ---------------
of the undersigned the right represented by the within Warrant to purchase
shares of Common Stock of Lionbridge Technologies, Inc. to
----------------
which the within Warrant relates, and appoints
Attorney to transfer such right on the books of
----------------------
Lionbridge Technologies, Inc. with full power of substitution in the premises.
Dated: --------------------------------------
(Signature must conform to
name of holder as specified on
the face of the Warrant)
--------------------------------------
(Address)
Signed in the presence of:
--------------------------
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