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EXHIBIT 10.27
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE
OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
STOCK PURCHASE WARRANT
To Purchase Shares of Preferred Stock of
CONTINUUS SOFTWARE CORPORATION
THIS CERTIFIES that, for value received, _____________________________
(the "Investor"), is entitled, upon the terms and subject to the conditions
hereinafter set forth, at any time on or after the date hereof and on or prior
to three years from the date hereof, but not thereafter, to subscribe for and
purchase, from CONTINUUS SOFTWARE CORPORATION, a California corporation (the
"Company"), ________ shares of Series E Preferred Stock at a purchase price per
share equal to the "Exercise Price" (as defined below). The purchase price and
the number of shares for which this Warrant is exercisable shall be subject to
adjustment as provided herein.
1. TITLE OF WARRANT. Prior to the expiration hereof and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company,
referred to in Section 3 hereof, by the holder hereof in person or by duly
authorized attorney, upon surrender of this Warrant together with the Assignment
Form annexed hereto properly endorsed.
2. EXERCISE PRICE. The initial Exercise Price shall be equal to
$2.10 per share. In the event that the Company closes a Series E Preferred Stock
financing on or prior to April 30, 1997, in which the Company receives an
aggregate of at least $1,500,000 (excluding existing indebtedness), then the
Exercise Price shall be the price per share of such Series E Preferred Stock.
3. EXERCISE OF WARRANT. The purchase rights represented by this
Warrant are exercisable by the registered holder hereof, in whole or in part, at
any time before the close of business on the date three years following the date
hereof by the surrender of this Warrant and the Notice of Exercise annexed
hereto duly executed at the office of the Company, located at ▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or such other office or agency of the Company as it
may designate by notice in writing to the registered holder hereof at the
address of such holder appearing on the books of the Company), and upon payment
of the purchase price of the shares thereby purchased (by cash or by check or
bank draft payable to the order of the Company or by cancellation of
indebtedness of the
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Company to the holder hereof, if any, at the time of exercise in an amount equal
to the purchase price of the shares thereby purchased); whereupon the holder of
this Warrant shall be entitled to receive a certificate for the number of shares
of Series E Preferred Stock so purchased. The Company agrees that if at the time
of the surrender of this Warrant and purchase the holder hereof shall be
entitled to exercise this Warrant, the shares so purchased shall be and be
deemed to be issued to such holder as the record owner of such shares as of the
close of business on the date on which this Warrant shall have been exercised as
aforesaid.
Certificates for shares purchased hereunder shall be delivered to the
holder hereof within a reasonable time after the date on which this Warrant
shall have been exercised as aforesaid.
The Company covenants that all shares of Series E Preferred Stock which
may be issued upon the exercise of rights represented by this Warrant will, upon
exercise of the rights represented by this Warrant, be fully paid and
nonassessable and free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).
4. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. With respect to any fraction of a share called for upon the exercise of
this Warrant, an amount equal to such fraction multiplied by the then current
price at which each share may be purchased hereunder shall be paid in cash to
the holder of this Warrant.
5. CHARGES, TAXES AND EXPENSES. Issuance of certificates for shares
of Series E Preferred Stock upon the exercise of this Warrant shall be made
without charge to the holder hereof for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the holder of this Warrant or in such name or names as may
be directed by the holder of this Warrant; provided, however, that in the event
certificates for shares of Series E Preferred Stock are to be issued in a name
other than the name of the holder of this Warrant, this Warrant when surrendered
for exercise shall be accompanied by the Assignment Form attached hereto duly
executed by the holder hereof; and provided further, that upon any transfer
involved in the issuance or delivery of any certificates for shares of Series E
Preferred Stock, the Company may require, as a condition thereto, the payment of
a sum sufficient to reimburse it for any transfer tax incidental thereto.
6. NO RIGHTS AS SHAREHOLDERS. This Warrant does not entitle the
holder hereof to any voting rights or other rights as a shareholder of the
Company prior to the exercise thereof.
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7. EXCHANGE AND REGISTRY OF WARRANT. This Warrant is exchangeable,
upon the surrender hereof by the registered holder at the above-mentioned office
or agency of the Company, for a new Warrant of like tenor and dated as of such
exchange.
The Company shall maintain at the above-mentioned office or agency a
registry showing the name and address of the registered holder of this Warrant.
This Warrant may be surrendered for exchange, transfer or exercise, in
accordance with its terms, at such office or agency of the Company, and the
Company shall be entitled to rely in all respects, prior to written notice to
the contrary, upon such registry.
8. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. Upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new Warrant of like tenor and dated as of such cancellation,
in lieu of this Warrant.
9. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or a Sunday or shall be a legal holiday, then such
action may be taken or such right may be exercised on the next succeeding day
not a legal holiday.
10. EARLY TERMINATION AND DILUTION.
(a) MERGER, SALE OF ASSETS, ETC. If at any time the company
proposes to (i) effect a merger, reorganization or sale of substantially all of
the assets of the Company in which the shareholders of the Company immediately
prior to the transaction will hold less than 50% of the surviving entity (or its
parent) immediately after the transaction, or (ii) effect a registered public
offering of the Company's shares (a "Public Offering"), then the Company shall
give the holder of this Warrant thirty days notice of the proposed closing date
of such transaction and if the Warrant has not been exercised by the closing
date of such transaction it shall terminate.
(b) ISSUE EXERCISE. In lieu of the cash payment set forth in
paragraph 3 above, the Investor may elect to pay the Exercise Price by the
surrender of Warrants ("Net Issuance") as determined below (without payment of
any kind). If the Investor elects the Net Issuance method, the Company will
issue Series E Preferred Stock in accordance with the following formula:
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X = Y(A-B)
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A
Where: X = the number of shares of Series E Preferred Stock to be
issued to the holder.
Y = the number of shares of Series E Preferred
Stock requested to be exercised under this
Warrant.
A = the fair market value of one share of the
Company's Series E Preferred Stock at the
date of calculation.
B = The Exercise Price (as adjusted to the
date of such calculation).
(ii) For purposes of the above calculation, current fair
market value of the Series E Preferred Stock shall mean with
respect to each share of Series E Preferred Stock:
(i) if the exercise is in connection with an initial public
offering and if the Company's Registration Statement relating to
such public offering has been declared effective by the
Securities and Exchange Commission, then the fair market value
per share shall be the product of (x) the "Initial Price to
Public" specified in the final prospectus with respect to the
offering and (y) the number of shares of Common Stock into which
each share of Series E Preferred Stock is convertible at the
time of such exercise;
(ii) if this Warrant is exercised prior to, and not in
connection with the Company's initial public offering, then the
current fair market value of the Series E Preferred Stock shall
be as determined in good faith by its Board of Directors, unless
the Company shall become subject to a merger, acquisition or
other consolidation pursuant to which the Company is not the
surviving party, in which case the fair market value of Common
Stock shall be deemed to be the value received by the holders of
the Company's Series E Preferred Stock on a common equivalent
basis pursuant to such merger or acquisition.
(c) RECLASSIFICATION, ETC. If the Company at any time shall,
by subdivision, combination or reclassification of securities or otherwise,
change any of the
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securities to which purchase rights under this Warrant exist into the same or a
different number of securities of any class or classes, this Warrant shall
thereafter be to acquire such number and kind of securities as would have been
issuable as the result of such change with respect to the securities which were
subject to the purchase rights under this Warrant immediately prior to such
subdivision, combination, reclassification or other change. If shares of the
Company's Common Stock are subdivided or combined into a greater or smaller
number of shares of Common Stock, the purchase price under this Warrant shall be
proportionately reduced in case of subdivision of shares or proportionately
increased in the case of combination of shares, in both cases by the ratio which
the total number of shares of Common Stock to be outstanding immediately after
such event bears to the total number of shares of Common Stock outstanding
immediately prior to such event.
(d) CASH DISTRIBUTIONS. No adjustment on account of cash
dividends or interest on the Company's Series E Preferred Stock or other
securities purchasable hereunder will be made to the purchase price under this
Warrant.
(e) AUTHORIZED SHARES. The Company covenants that it will
authorize a sufficient number of shares of Series E Preferred Stock to provide
for the issuance of Series E Preferred Stock upon the exercise of any purchase
rights under this warrant. The Series E Preferred Stock shall have rights,
preferences and privileges (including a conversion ratio to Common Stock no less
favorable than any other class or series of stock and shall have a liquidation
preference senior to all other classes or series of stock. The Company further
covenants that during the period Warrant is outstanding, it will reserve from
such authorized and unissued Series E Preferred Stock, a sufficient number of
shares of Series E Preferred Stock to provide for the issuance of such stock
upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of the Company's Series
E Preferred Stock upon the exercise of the purchase rights under this Warrant.
11. MISCELLANEOUS.
(a) ISSUE DATE. The provisions of this Warrant shall be
construed and shall be given effect in all respect as if it had been issued and
delivered by the Company on the date hereof. This Warrant shall be binding upon
any successors or assigns of the Company. This Warrant shall constitute a
contract under the laws of the State of California and for all purposes shall be
construed in accordance with and governed by the laws of said state.
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(b) RESTRICTIONS. The holder hereof acknowledges that the
Series E Preferred Stock acquired upon the exercise of this Warrant may have
restrictions upon its resale imposed by state and federal securities laws.
IN WITNESS WHEREOF, CONTINUUS SOFTWARE CORPORATION has caused this
Warrant to be executed by its officers thereunto duly authorized.
Dated: January 23, 1997
CONTINUUS SOFTWARE
CORPORATION
By:
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Name:
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Title:
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ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information. Do
not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
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(address)
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Holder's Signature:
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Holder's Address:
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Dated: , 19
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Signature Guaranteed:
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NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
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NOTICE OF EXERCISE
To: CONTINUUS SOFTWARE CORPORATION
(1) The undersigned hereby elects to purchase shares of Series E
Preferred Stock of CONTINUUS SOFTWARE CORPORATION pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price in full,
together with all applicable taxes, if any.
(2) Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:
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(address)
(3) The undersigned represents that the aforesaid shares of Series E
Preferred Stock are being acquired for the account of the undersigned for
investment and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of
distributing or reselling such shares.
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(Date) (Signature)